What Can Happen When Your Living Trust Is Outdated
A living trust is an essential component of a modern estate plan that protects your assets for your family or other beneficiaries. However, if you had your living trust drafted years ago, there may be some elements that will do more harm than good. Here are some reasons why you should review and update your trust periodically.
- Are new assets in the trust? – When you first formed the trust, you had to add your assets into it. However, if you have new accounts, properties, and other assets since then, you need to add them.
- Special needs of beneficiaries – Review the wording regarding your beneficiaries. Most people don’t want assets going to an adult child’s ex-spouse (unless they have the grandkids). Be careful with the structure of the trust if your loved one receives a government check (for example, if they are on disability). You don’t want your generous gift to negatively impact their income.
- Changes in your retirement accounts – It could be the accounts attached to the trust, or just the sheer amount of assets if you have done really well in recent years, that impact your estate planning. Remember that laws regarding how much time your beneficiaries have to take the assets from your retirement accounts has changed, and this can have major tax implications.
Get the Help You Need to Update a Living Trust in California
Petrov Law Firm has experienced estate planning attorneys who can help whether you need to set up a new estate plan or modify an existing plan. Call 619.344.0360 to get started today.