People often choose to include a trust in their estate plan for the security it can provide. One type of trust — a revocable living trust — appeals to many due to its flexible nature. Unlike an irrevocable trust, you can amend the terms and conditions of your revocable living trust.
But when do you need to make those changes? And why?
Modifying your trust
Your trust should reflect the changes in your life. Generally, when you experience a big life transition, you should take a look at your trust to see whether you need to change anything to accommodate the transition. This includes:
- The birth of a child or grandchild
- The death of a close family member
- A recent marriage or divorce
- A falling out with a family member
- A change in estate planning laws, particularly tax laws
- Having sold or gotten rid of certain assets
- Having moved out of state
In general, you should also review your estate plan every three to five years, even if you haven’t experienced any big life changes. There might be something that you wish to add or amend that you wouldn’t have otherwise thought about had you not reviewed your plan.
Why is updating my trust important?
The purpose of your estate plan is to protect your assets and see to it that your family’s future is in good hands after you pass. If it isn’t up-to-date, it can cause several issues that your family will have to contend with.
You might end up unintentionally leaving a deserving beneficiary out of your trust. You may also run into estate tax problems, probate court or family disputes with an old trust.
Protect your family and your future
When it comes down to it, you should take advantage of the flexible nature of a revocable trust. After all, you chose to place your assets in a revocable trust for a reason. When you make the necessary changes to your trust, you can prepare your estate to pass with few complications and rest easy knowing the terms will ensure a secure future for your family.