A living trust is an efficient way for most people to maintain control of their assets during their lifetime and pass those assets directly to loved ones after their death. Living trusts are “revocable,” which is to say that you can revoke them at any time until you die or become legally incapacitated. You can also revise and update them, and it’s sometimes wise to do so.
One advantage of a trust is that it is relatively easy to amend. The key is knowing under what circumstances to amend it and how.
When Should I Update My Living Trust?
You should update your living trust whenever you have a major life event that will have an impact on whom you want to inherit from you.
One of the most common life events prompting a review and update of a living trust is a divorce. The trust document is the “private law” of your trust, and if you don’t want a former spouse to be a beneficiary, you should act affirmatively to make sure they do not inherit from you. (You should review the rest of your estate plan after divorce as well; you may have designated your ex-spouse as the person who should make decisions about your medical care if you are incapacitated. Your feelings about giving them the power of life and death after you have likely changed since you did so.)
You may want to update your trust if:
- You get married
- You get divorced
- You have or adopt a new child
- One of your intended beneficiaries dies
- You want to disinherit someone
- Your successor trustee becomes incapacitated or dies
- You no longer believe your trustee should serve in that capacity
- You move to another state
In the event that you move to a new state, you want to be sure that your trust complies with the laws of the state in which you now reside. This is an especially good idea if you haven’t had your trust reviewed in a while. The move will give you an impetus to review your original trust terms and decide whether you want to make any changes. Bonus: doing so will help you get to know a estate and trust attorney in your new location.
Regardless of life changes, you should make it a point to take a look at your estate planning documents, including a living trust, every two to three years to see if you can identify anything that needs to be updated or changed.
How Do I Update My Living Trust?
The best thing to do is to meet with an experienced Michigan estate planning attorney. Depending on what prompted you to seek an update of your trust, as noted above, a broader review of your estate plan may be in order.
Even if it emerges that all that needs to be changed is your trust, you want to make sure that is done correctly. Particularly if you have had multiple amendments to your trust over the years, it’s important to ensure that the trust documents and its amendments are able to be read as a coherent whole. It may be desirable to restate the entire trust, rather than tacking on another amendment.
Should you attempt to update your trust yourself? While it’s not illegal to do so, it may be ill-advised. Inheritance and tax law is complex, and you may be unaware of changes that could affect your document. The cost of an attorney’s services is trivial in comparison to the risk of your assets falling into the wrong hands when you die or if you should become incapacitated.
Talk to an experienced Oakland County estate planning attorney to learn more about when and how you should update your revocable living trust. Attorney Jim Hubbert has helped numerous Michigan clients update and amend their trusts.
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