Recognizing that you need an estate plan that includes a revocable living trust is an important step, but it’s not the final step in the estate planning process. Just as you would with your car, you need to regularly perform maintenance on your estate plan in order to get the most use from it. This is especially true when it comes to revocable living trusts. A revocable living trust is an excellent tool to incorporate into a comprehensive estate plan, but as time goes by you want to pay attention to specific events and make sure that you take the appropriate steps to modify the trust to better reflect your new circumstances. Here’s what you need to know about updating your revocable living trust.
Updating Your Revocable Living Trust Schedule of Assets
Your trust schedule of assets will contain a comprehensive list of all the property of the trust owns. In most situations you will use a revocable living trust as the owner of almost all of your property. When you buy or sell any trust property you will have to take keep careful records to ensure that you complete the transaction properly. Updating the trust schedule of assets by, for example, including the dates when you sold trust property or the dates when you acquired new property will make it much easier to manage the trust as you use it.
When most people create a revocable living trust they serve as their own trustee. They also name one or more people who will serve as the successor trustee should they become incapacitated or die. Your successor trustees need to be reliable people you can count on should the need arise. They should also probably be located near to where your trust property is located.
For example, let’s say you own a home in Minnesota and name your brother as your successor trustee. Your brother also lives in Minnesota, but, a few years after you make the trust, he moves to Florida. Your Minnesota property requires regular maintenance and upkeep. Even though your brother might be able to perform the duties of successor trustee while living in Florida, you might consider naming a new successor trustee who is located closer to you and the trust property.
If you go through a divorce or get married while owning a living trust, your change in marital circumstances will also require you to modify the trust. In a divorce, for example, the trust property will likely be divided between you and your spouse. This likely means you have to re-title all of the trust property.
Of course, these are only a few of the circumstances under which you will have to modify the terms of your revocable living trust. For more comprehensive list or to update your current estate plan contact us to set up your trust review.