The Importance of Reviewing Your Trust–and Changing Instructions

The Importance of Reviewing Your Trust–and Changing Instructions

Estate planning gives you the opportunity to direct exactly how you want to distribute your assets after your death, with the help of documents like a trust, and assistance from a reliable Laguna Niguel estate planning attorney.

Trusts allow you to efficiently pass on assets to your heirs, avoiding time spent in court and often saving taxes. Once you have a trust set up, however, you may need to review it and make changes to it over time. As your life changes, so should your trust. 

What does reviewing a trust entail, and how can you change it? In this article, we’ll go into some of the reasons you may want to change a trust, and how to do so with the help of a trust attorney Orange County location.

What are Revocable vs. Irrevocable Trusts? 

There are many kinds of trusts used for the purpose of estate planning. They all have different advantages and disadvantages.

When it comes to revising your trust, there are two main categories to keep in mind such as revocable and irrevocable trusts. 

An irrevocable trust cannot be changed, and the terms are set from the time it is signed. These trusts have some tax advantages, which is why some people choose them even though they must stay the same forever. 

Revocable trusts, however, can be changed whenever the owner desires to do so. There are many good reasons to change the terms of a trust, such as adding or removing beneficiaries, changing the assets contained in it, and even adding conditions to how it should be used.

Why Is It Important to Review Trusts?

Trusts are one of the most important tools in your estate plan. They allow you to control what happens to your assets after your death, and they can distribute those assets among beneficiaries, with or without stipulations attached.

However, your feelings or your life situation can change over time. As a result of that, you may change your mind about who you want to include as a beneficiary, or what you want to leave to them. You may even want to add a property to the trust or take it out.

Your trust contains instructions on how to distribute your property. For example, you may want to add new stipulations to your trust after learning about a relative’s spending habits, substance abuse, or criminal matters. You may want to remove stipulations if the reason for having them no longer applies. 

Reviewing a trust is basic maintenance for this essential legal document. If you don’t review it, you may not realize that it doesn’t reflect your current wishes. For a trust to serve its purpose, you should review it often and alter it as needed.

When Should You Review Your Trust?

If you have a trust, it’s good practice to look over the document occasionally. There are plenty of reasons you may want to review the trust and see if you have cause to alter its terms.

If you want to make sure your trust is always as relevant as possible, you may want to keep a schedule that lists your assets. An experienced trust attorney in Orange County may suggest doing so every three to five years—to stay on top of the many changes in your life.

You may not notice how much your life changes in just a few years, so this is one way to keep your trust relevant. 

If there is a sudden and dramatic change to your life, though, you don’t need to wait to review or change the trust. If you gain new family members, lose family members, or have a changed financial situation, take a look as soon as possible. The sooner you identify potential changes, the better. 

Here are some of the most common reasons you may want to review a trust:

  • Marriage
  • Divorce
  • Death
  • Birth
  • Property distribution changes
  • Adding or removing a property from the trust

Any of these changes would give you good reason to look over the current text of your trust and make necessary adjustments.

The more accurate your trust is to your current life, the less likely  your beneficiaries will spend time in Probate Court. 

How Do You Change Your Trust? 

If you have a revocable trust, you can change or even revoke it at any time. In the process, you’ll have to either edit the legal document or else remove it completely and create a brand new trust.

To change a trust, you’ll need help from your Laguna Hills trust attorney to create an amendment or a new document that restates the trust content including the changes. Whichever one you choose, you’ll need to update the text of the original trust. An attorney can help you settle on clear, precise language. 

Once you’ve completed the new text for your trust, you can notarize it and keep it safely stored with your other estate planning documents.

How Do You Revoke a Trust?

Revoking a trust means that the legal document and it’s disposition will cease to exist entirely. If you revoke a trust, it won’t have any influence over how your assets are handled after you die. 

Why would someone revoke a trust? If you find yourself needing to make tons of changes to a trust, it may be easier to start out with a completely new trust.

For example, someone who has made some major life changes would need to create an entirely new document. Another person may want to choose a new trustee to manage the trust. 

To revoke a trust, you must take all of your assets out of it. In practice, this means changing the ownership of deeds and other paperwork back to your own name. This process may take some time. 

After you have finished moving your assets out of that trust, you’ll need a document declaring that you revoke the trust. An attorney can help you write a document that is thorough, clear, and in accordance with local laws.

Once you have the trust revocation document, you must sign and notarize it, and in some cases, file it in court. At this point, you can create and file your brand new trust.

Estate planning is an important task that allows you to distribute the money among family, friends, and even charities. A legal professional like a Laguna Hills estate planning attorney will take care of the legal aspects and ensure your wishes are carried out the way you planned.

Schedule a free initial appointment with us, contact our team at Parker Law Offices today.

Maria Parker assists her clients plan for their end of life health care wishes and the ultimate distribution of their wealth after death. She personally experienced the importance of planning at the time her father passed away.

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