Change is constant. As with everything in the world, your living trust should be updated to accommodate any changes. Notably, you should update your estate plans just with occurrences of any life changing event.
While planning towards you financial and assets protection may seem like a lot of stress, it is expedient that you have some certain estate plan documents like the living trust. With the help of an estate planning attorney or a living trust attorney you can obtain this legal document.
A living trust is an estate planning document which helps you place all your estate property into a trust while you are alive, and allows you to transfer your assets to desired beneficiaries while you are still alive or even when you pass on. When forming a living trust, the beneficiaries named in this document is called a successor trustee and you, the guarantor or trust maker.
Through trust, you can have anyone whom you solely desire manage and make financial decisions over your assets both while you are alive or dead as well as when you become mentally incapacitated. Living trust also form the bases of how your estates are shared or given to beneficiaries.
Asides from preparing this document, you should fund it immediately or transfer your assets into it. Only then would the asset be safe and can then transferred to any person you desire.
Why you need to update your living trust
There are several reasons why you should consider revising and then update your living trust, they are:
Your Assets, estate or properties changed and you need them to be added to the living trust
Assets that are volatile always undergo constant changes. Similarly when you inherit money, loose assets, or buy/sell a business, these factors cause major changes in your assets. These changes in assets may influence adding or removing an asset from the living trust. Your living trust documents should always reflect the appropriate number of your assets and its value. This way, problems would not be encountered, during implementation of such estate plan. To ensure that your current living trust document reflects the appropriate number of assets, you need to transfer the assets into the trust.
The state laws changed
Laws are constantly changing. The more time has passed, the more likely laws and regulations have changed. It is best to revise your living trust and see how the changes in the state laws as regarding the formalities, implementation or inclusions in the documents has affected your trust.
You Moved to a Different State or have properties in other state
If you constantly update your living trust you would:
Avoid unnecessary probate issues:
One of the benefits of living trust is that it avoids probate even while a valid and clearly written will still go through a court proceeding for your assets to be distributed to the beneficiaries according to your wishes. A living trust doesn’t require probate because the assets has been placed into the trust before the death of the trust maker. Once the assets has been transferred into the trust they will not be considered part of your estate and will not be subject to probate.
You can update your living trust by adding
Real Estate, houses and Mortgages
To transfer a new house or other real estate property to a living trust, a new deed must be made with the local real estate records. Estate taxes issues would also have to be settled. It is always good consult a living trust attorney for estate plans.
Bank and other financial accounts
There are various types of trust, but majorly the irrevocable and revocable living trust, other types of trust are the special need trust or the spendthrift trust. These two however can still be placed into the irrevocable and revocable trust.