Do I Need To Update My Estate Plan?

An estate plan is unfortunately not evergreen.  It is meant to last many seasons but its value may decrease over time. You should consider reviewing your estate plan about every 5 to 10 years, or upon a life event such as the below:

• A change in marital status – you’ve gotten married, separated or divorced
• You want to add or delete beneficiaries
• You want to add or delete personal representatives such as trustees or executors
• You add a child to your family (Click HERE for more information on this topic)
• You freeze genetic assets (Click HERE for more information on this topic)
• You acquire a new asset such as a home
• A change in the tax law
• A change in your relationship with a personal representative
• A change in the mental or physical health of a loved one
• You have inherited property
• You are or will soon become a grandparent
• You become a business owner or acquire a business partner

 
When the time comes to update the trust, there are two ways of making the updates.  You can either amend the trust, or amend and restate the trust.  In general, truly simple updates such as changing a successor trustee would only require an amendment.  Amending a trust is a rather simple process.
 
On the contrary, when it comes to significant changes such as changing a beneficiary or making a lot of small changes, it is a best practice to amend and restate the trust. When you restate a trust, the name and date of the trust stay the same, but you will get an entirely new trust that is updated to both your wishes, and the current the law.  
 
For instance, many older trusts, created before the age of the internet, social media, cell phones, and cloud accounts, do not contain any provisions which would empower the trustee to access these digital assets.  Without this power, your loved ones may need a court order to access your digital assets such as iPhone photos, or even airline miles.  Also, prior to the change in tax laws, many trusts were structured as AB trusts to save families from incurring estate tax.  With the federal estate tax exemption so high at this point, these AB trust structures may not be worth the added work that administering that type of trust requires.
 
An added bonus to restating the trust is that nobody ever sees the old trust.  So, if you make any change to your trust such as deleting a beneficiary, or decreasing a beneficiary’s share, which could result in hurt feelings, that beneficiary never has to know about that change.

Drop a line to discuss how I may help you with updating your estate plan.