When Should I Have My Trust Reviewed?

A revocable living trust is a living, breathing document. You can, and should, make changes to it. Once you lose capacity, or die, the trust generally cannot be changed. As a rule-of-thumb, you should conduct a review of your trust every five years. Here are some of the things you should look for:

Successor trustee: You should ensure that your successor trustee still makes sense based on their location, life circumstances, age and relationship to your family.

Birth of a child/Death of a family member: Do individuals need to be added or removed from the trust as beneficiaries?

Age of majority: Are the guardianship provisions still necessary? Do you want to change the age of distribution for your children’s estate? Your children are fully-formed adults now and you are better able to assess their maturity level and how soon they should receive any inheritance.

Additionally, do you want to replace your successor trustee with one or more of your children? Once the child reaches eighteen (18) years old, this is an option.

Have you moved? If you have moved you may want to reassess your trustee provisions as well. Is your intended successor trustee still the most logical person based on your new location? Are there inheritance taxes in your new state? Does your trust conform with the laws of the new state? Is your new home in the name of the trust? If it is not, contact a local attorney to change the title.

Major change in income or inheritance received? Are you in a new tax bracket? Is there a new income/inheritance that needs to be accounted for in the document? Would you like to do something different now that you have more money? Are you nearing the exemption amount for federal estate tax purposes? In 2014, the exemption amount was $5.34 million per individual.

Taxes. You should review your trust every five years to evaluate whether there has been a change to the federal estate tax. A lot of couples that formed A-B trusts in the 1990s when the federal estate tax exemption amount was $600,000, are now revising their trusts to rid themselves of these provisions. The A-B trusts can be limiting if one of the spouses needs long-term care, and are cumbersome to administer after the death of the first spouse. No one knows what will happen with the estate tax over the next twenty years, so review that trust!

Medi-Cal. If you have an A-B trust, it can be extremely difficult to qualify a spouse for Medi-Cal coverage. You should see an attorney you can amend the trust and assist you in the application process.

If you find changes that should be addressed, contact an estate planning attorney to review and amend the trust. Like all legal documents, specificity is essential in ensure that your wishes are executed and that your heirs and beneficiaries are not fighting over your intentions after you pass. You should also have your powers of attorney, will, and advanced healthcare directive reviewed at the same time.