You know you should review your trust on a regular basis, but what should you look for? A technical review by an attorney can determine whether there are any changes in the law or tax code of which your plan can take advantage. However, your own review is perhaps even more important. Here are three quick things to look at when you review your trust. Looking at these three critical areas will ensure that your plan is successfully carried out when the time comes.
To whom are you leaving your estate? Some plans have very specific lists of beneficiaries, and will require updating if family circumstances change. Other plans use broad categories like “children” “grandchildren” and the attorney’s favorite, “issue”. Either way, have you changed your mind about who should receive your money and property? Sometimes it is a change in the beneficiary themselves that may require a change in your plan. For instance, if a beneficiary becomes disabled it may be important to create a special needs trust rather than giving the beneficiary the money outright.
Your successor trustees
Choosing who will shoulder this responsibility after you is the toughest decision you have to make. Do you need to choose someone younger? Has something happened to cause you to be less confident in the person you chose? This is probably the easiest thing to change in your entire plan, so don’t hesitate to make a necessary change in this area.
Your trust won’t work if it is not funded. Look at your trust’s “Schedule of Assets.” Do you still own the assets you listed? Have you acquired more assets? Cross out what you don’t have any more, and add what you do have. Make sure your new house has been transferred into the trust. Did you refinance? Some title companies will help you put your house back into the trust at the end of the refinance, but most do not. Has your net worth increased significantly? Some changes in assets will require attorney assistance to advise you further, for example becoming a business owner.
That’s it! In most cases a review should not take more than a minute or two to scan through these items , and make sure everything is in order. While you’re at it check out your “bucket list” and see what you can cross off in the next twelve months!