How often should you adjust and update your trust in California? Once an estate plan is generated and your trust(s) are established and funded, aren’t you finished? The simple answer is no—life changes. Finances change. The behavior and needs of your heirs and beneficiaries change. The value of assets, investments, and accounts changes. Tax laws change. Life is never stagnant, and neither is your estate plan or trust.
Key Reasons to Adjust and Update Your Trust in California
- A trust is one component of most estate plans in the State of California. Most estate plans provide for at least one revocable trust to ensure assets avoid the expense and time associated with probate, and pass directly to heirs and beneficiaries.
- The only constant in anyone’s life is “change.” Many changes may occur in the life of the grantor(s) of a trust each year. They can be minor changes in the law or life of the estate holder(s), or the change can be a significant life event such as an illness, divorce, or the sale of a business asset.
- It is wise to review an existing estate plan, including a trust, with an experienced estate planning and tax attorney every 2 to 3 years. This allows the grantor to ensure that the trust documents capture your current wishes, while providing for any changes or needs that may arise in the life of an heir or beneficiary.
Estate Planning and Trusts Should Be Reviewed and Updated Every 2 to 3 Years
Most experts agree that it is essential for you to review your estate planning and adjust and update your trust in California every 2 to 3 years. The experienced estate planning and trust attorneys at Allen Barron and Janathan L. Allen, APC, will efficiently review and update your estate plan and trust(s) if necessary. We discuss changes in your life and the directions and plans outlined in your estate documents and trust directives.
For example, let’s consider the simple estate of a married couple in California who own their own home. In the classic revocable trust (used extensively throughout San Diego and California for years), when the first spouse passes, half of the couple’s assets are often placed into an irrevocable trust for tax benefits and protection from creditors. The surviving spouse may not have needed access to these funds or assets under the original estate plan design. Your estate may need to be updated to provide more flexibility for the surviving spouse to determine what percentage of assets will be required and how to best protect the loved ones and interests you care so much about.
This is especially true in blended family scenarios. The first spouse to pass may wish to ensure their own children receive a specific portion of their estate. If the surviving spouse remarries, an old or improperly structured trust may allow the new spouse to drain financial resources or allocate them to their own children instead of the heirs of the first spouse. These are sensitive issues that require the expertise of an experienced estate planning and trust attorney.
An Estate Plan, Like Your Life, is Not Static – Change is Inevitable
How often should you adjust and update your trust in California? Why is it essential to review existing estate plans every 2 to 3 years? An estate plan, like life itself, changes, grows, shifts, adapts, to meet your present objectives, to meet future needs, and to provide for a future you may not be healthy enough or present within to meet the needs of those you care for so much.
What significant changes have occurred in your family in the past two to three years? Has there been a birth or death in your immediate or extended family? What has changed in the lives of your heirs and beneficiaries? Are there any specific plans that need to be adjusted to accommodate an inability to effectively manage finances, address addictions, meet special needs, or fulfill health requirements? Is there a beneficiary or interest that needs to be added, modified, or removed?
What’s new in your life? Have you experienced a significant accomplishment? Are you buying or selling a business interest or shifting investments and holdings from income production to longer-term stability? Are you preparing for retirement, travel, a new business opportunity, or life with a new partner?
Life is an exciting journey because of the changes, in spite of and often because of the unexpected. You’ve planned and put things in place to help accomplish both short-term and long-term objectives.
You should adjust and update your trust in California every 2 to 3 years. Life is all about change. Your estate plans and the trust(s) within need to reflect those changes and anticipate those yet to come. They need a little attention to ensure, when the time comes, your plans come to fruition.
We invite you to learn more about the integrated tax, legal, accounting, estate planning, and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470.
We want to help ensure that your intentions are protected, and realized.
