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5 Reasons Why You Should Review Your Trust Today

By: Heather Ward, Esq. April 6, 2023 no comments

5 Reasons Why You Should Review Your Trust Today

Trusts are an essential estate planning tool utilized by many of our clients. However, many people do not recognize the importance of having their trusts reviewed and updated over the years. This is especially important if you move out of state as trust laws often vary from state to state. Even if you still live in the same state that your trust was created, there could be updates to the laws within your state requiring an update.

1. Tax Laws
Each state has its own tax laws that govern how estate taxes are to be calculated and paid. If you move to a new state with different tax laws, your trust may not be structured optimally to minimize estate taxes. Even if you do not move to a new state, the federal tax laws do change occasionally, and a big one is set to change in 2025. Updating your trust can help ensure that it complies with the current laws and maximizes tax savings.

2. Property Laws
The laws governing property ownership and transfers also vary from state to state. If your trust was created in another state, your trust may not be as effective in achieving your goals. One extremely important example of this is the required homestead language that all Florida trusts must have to ensure that you maintain your homestead rights and exemptions after transferring the property to your trust.

3. General Updates to the Law
The law is ever changing, and so are the best practices for estate planning. For example, a few years ago, it was much less common to see default provisions in trusts for “supplemental needs planning.” Now, in some states, it is considered malpractice to NOT include language about this type of planning. This is just one of many examples of changes to the law and best practices in this area, making it especially important to continue periodical review of your trust with a trusted attorney.

4. Beneficiary Designations
Things change over the years – especially family dynamics and other relationships. Your trust likely names specific beneficiaries to receive assets after your death, but have there been any new family members born that you had not previously thought about? What about deaths or incapacities of loved ones you previously provided for? What about the maturity of your beneficiaries? These are all important considerations when reviewing your current beneficiary designations.

5. Trustee Selection
Your trust should name a successor trustee who will serve in the event of your death or incapacity. However, the appointment to this trusted position may have changed over the years as well. Maybe you’ve moved across the country, or that trusted friend or family member you named now has too many things on their plate to be able to step in to help you. Similarly, it could be helpful to name a trustee who is familiar with the laws of your new state and can manage your assets more effectively.

In conclusion, it is crucial to review and update your estate plan to ensure that it complies with changes to the laws and continues to achieve your estate planning goals, whether or not you have moved to a new state. It is important to seek the assistance of an experienced estate planning attorney to review and update your trust, but it is even more important that you find an attorney who you feel you can have a continued relationship with to help keep you aware of the changes to the law and best practices as this practice area continues to evolve.

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