Life is always changing. It’s imperative to ensure your estate plan changes with it. An essential estate planning tool that should be kept up to date to reflect your current situation is a living or revocable trust. A living trust is essentially a fiduciary arrangement that allows individuals to hold assets on behalf of beneficiaries. When there are major life changes such as a divorce, the birth or adoption of a child, or an increase or decrease in wealth, you should make amendments to your trust to reflect these changes in circumstances. Updating your living trust will ensure your hard-earned assets are protected and your wishes are carried out properly after you’ve departed. Keep reading to learn how often you should update your trust fund and how an adept Montgomery County Trust Attorney can help you protect your assets.
What factors may warrant updating a trust fund?
One of the many benefits of establishing a living trust also known as a revocable trust is that the conditions can be altered or revoked at any time during your lifetime. To ensure your hard-earned assets are distributed to the correct parties, it is important to review and update your existing trust to reflect any significant life changes. There are numerous reasons why you may decide to change or revoke your trust. For instance, your relationship with a beneficiary may change as a result of a divorce or death, which would result in you removing them as a beneficiary. Moreover, some of the most common changes in circumstances that warrant updating your trust include but are not limited to the following:
- Marriage and divorce
- Birth of a child or grandchild
- Your financial situation has changed
- Purchase of a newly acquired property
- A move to a different state
- Marriage or divorce of a child
- Retirement
- Long-term illness
- Death of a spouse, child, or another intended beneficiary
How often should it be reviewed and amended?
A good rule of thumb when it comes to updating your trust is to update it at least every 3-5 years. This will ensure it accurately reflects your current circumstances. However, it is in your best interest to review your trust at least once a year. Reviewing it once a year will ensure that any changes in your life will be properly reflected in your trust. Keeping your trust up to date is a critical part of estate planning. If a trust is not updated, it could result in your loved ones dealing with the long and tedious process of probate. To ensure your wishes are carried out properly and your trust accurately represents your current situation, you should review and update your trust at least once every year.
If you are looking to protect your hard-earned assets for the future, it is imperative to speak with a trusted Montgomery County trust attorney. Our firm is committed to helping our clients make necessary amendments to their living or revocable trusts.
