A living trust is a powerful estate planning tool, allowing you to manage your assets during your lifetime and seamlessly transfer them to your beneficiaries after your passing. However, a trust isn’t a “set it and forget it” document. Just like any important financial plan, it requires regular review and updates to ensure it continues to reflect your wishes and circumstances. This blog post explores why updating your trust is crucial and how often you should do it.

Life Changes, Trust Changes:

Life is dynamic. Over time, your family, finances, and priorities can shift significantly. These changes can render your existing trust outdated and potentially lead to unintended consequences. Here are some key life events that should prompt you to review your trust:

• Marriage or Divorce: Marriage or divorce dramatically alters your family structure and may require changes to beneficiaries, trustees, and how assets are distributed.
• Birth or Adoption: Welcoming a new child into your family necessitates updating your trust to include them as a beneficiary and potentially designate guardians.
• Death of a Beneficiary or Trustee: If a named beneficiary or trustee predeceases you, you’ll need to update your trust to reflect these changes and ensure your assets go to the intended recipients.
• Significant Changes in Assets: A substantial increase or decrease in your assets, such as inheriting a large sum of money or selling a major asset, may require adjustments to your trust’s distribution plan.
• Change in Financial Goals: Your long-term financial goals may evolve over time. For example, you might decide to prioritize charitable giving or provide specific support for a beneficiary with special needs. Your trust should reflect these evolving goals.
• Relocation: Moving to a different state can have implications for your trust. State laws regarding trusts vary, so it’s crucial to ensure your trust complies with the laws of your new state of residence.
• Changes in Tax Laws: Tax laws are subject to change, and these changes can impact the effectiveness of your trust. Regularly reviewing your trust with an estate planning attorney can help you identify potential tax implications and make necessary adjustments.

How Often Should You Update Your Trust?

While there’s no hard and fast rule, a good practice is to review your trust every three to five years, or whenever a significant life event occurs. This regular review ensures your trust remains aligned with your current wishes and circumstances.

Don’t Delay:

Updating your trust is not something to postpone. Procrastination can lead to unintended consequences, family disputes, and even legal challenges after your passing. Taking the time to review and update your trust regularly is an act of responsibility and care for your loved ones.

Consult with a Professional:

It’s highly recommended to consult with an estate planning attorney to review and update your trust. They can provide valuable guidance, identify potential issues, and ensure your trust remains legally sound and effectively carries out your wishes.

Learn more about Asset Protection, Will and Trusts. with Feliciano Financial Group, contact us today to discuss your Financial Blueprint.