When to Update Your Revocable Living Trust

If your estate plan includes a revocable living trust, you know how important it is to manage your assets carefully and keep everything up-to-date. But how frequently should you update your revocable living trust documents? Here is a guide to many of the common triggers to revisit your estate plan’s most important document.

What is a Revocable Living Trust?

A revocable living trust is a legal entity formed while you are alive to handle all your assets and finances and distribute what is left to your intended beneficiaries after your death. A revocable living trust can be used to avoid probate by taking control over key assets and property, including:

• Your home
• Vacation properties
• Time shares
• Vehicles
• Recreational vehicles
• Business interests
• Stocks
• Investment accounts
• Bank accounts
• Collectibles
• Cryptocurrencies and virtual assets
• Life insurance policy benefits

There are a lot of benefits to a revocable living trust, including, first and foremost, reducing the size and expense of your probate estate, and the length of time it will take to administer it. When you are no longer able to manage the trust yourself, the successor trustee of your choice can arrange for your care and distribute your assets according to your wishes.

Taking Advantage of the “Revocable” Part of Trusts

One of the biggest advantages of a revocable living trust is its flexibility. As the grantor, you have the authority to make changes to the trust at any time, even eliminating it altogether, up until the point of your death or incapacity. You can modify the terms of your trust by creating a trust amendment document and executing it the same as the original trust documents. If you need to terminate your trust, you can execute a trust revocation document, and transfer its assets back into your own name by executing titles, transfer deeds, or additional documents to retain control of the assets.

Why You Need to Review Your Revocable Living Trust

The ability to modify a revocable living trust is only useful if you make sure you are reviewing it regularly with the help of an estate planning attorney. It is a good idea to periodically review your trust every few years to make sure it still reflects your wishes, is reasonably targeted to meet your needs and goals, and properly accounts for the current legal landscape. Whether you need to adjust your beneficiaries or modify the terms of the trust itself, doing so now, while you are healthy, can ensure your family won’t face any problems after your death.

When to Update Your Revocable Living Trust

In addition to periodic reviews, there are also certain events that should trigger a review of your revocable living trust. Many of these are similar to when you should update your will. You should schedule a meeting with your estate planning attorney when you experience:

Changes to Your Family or Beneficiaries

Family life events like births, deaths, marriages, and divorces can all signal that it is time to update your revocable living trust. You don’t want to accidentally exclude a grandchild born after the trust was established, or mistakenly include the children of a divorced spouse (unless you choose to keep them as beneficiaries). You may also need to update your trustee designations or other roles in your estate plan as your relationships change over time.

Maturity of Beneficiaries

One trigger unique to trusts is the coming of age of child-beneficiaries. If trust assets are to be held until your children or grandchildren reach a certain age, their financial maturity may not match your expectations by that time. You may need to incorporate “spendthrift” provisions or other protections to ensure they have access to the assets when they need them most.

Medical Diagnoses

You may also need to revisit your revocable living trust if you receive a medical diagnosis that will significantly increase the cost of your end-of-life care. Doing so can ensure your trust is worded in a way that there will not be a shortfall after your final expenses are paid.

Changes to Business Interests

Business owners may have additional reasons to revoke their trusts or reclaim assets within them. If you need funds to further a business interest, start a new subsidiary, or even found an entire new business, you may need to modify your trust to get easier access to those funds.

New Estate Tax Laws

Sometimes the reason to review your revocable living trust isn’t in your control at all. New state or federal laws could change the way your estate will be managed, or the taxes your beneficiaries will need to pay on their inheritance. You may need to revise your trust documents to account for those changes and minimize the funds lost to the government.

Review Your Revocable Living Trust with an Experienced Connecticut Estate Planning Attorney

Whether you just need a routine review, or need to modify or terminate your revocable living will, the probate attorney at Lawrence & Jurkiewicz, LLC is here to help. Attorney Edward Jurkiewicz represents clients in Hartford and Litchfield Counties, and can help you make sure your revocable living trust is properly funded, and up to date. Please call us at 860-626-1333 or contact us at your convenience to schedule a confidential consultation.