REVIEWING TRUSTS CAN KEEP THEM UP TO DATE
Oct. 22, 2018
For many California families, trusts are an important tool to transfer wealth from one generation to another. They can be used to minimize the impact of probate, keep wealth transfers out of public view and even provide tax savings. However, it can be important for people with trusts to review them regularly to make sure that their documents and plans meet their current needs. In some cases, families are unhappy with the provisions of their trusts. However, by reviewing them in advance, individuals can make adjustments to improve their utility for their specific circumstances.
In some cases, the trusts weren't set up properly to begin with because the lawyer didn't understand what the family really wanted to get out of the document. In other cases, the language of the trust itself can be a problem. Provisions can be excessively vague or restrictive, leading to conflicts later on. Other trusts need to be changed because family circumstances have also changed, and those updates should be reflected in estate planning. In some situations, there is no problem with the trust itself, but other changes in the law have created better options for managing wealth.
Estate planning lawyers can help families repair or replace trusts that do not fit their needs. Trusts can be amended in some cases to make sure that provisions exist to provide needed distributions to beneficiaries. In other circumstances, more thorough governance structures can help protect the principal of the trust. Tax law changes can make it beneficial to replace a trust entirely with a different instrument.
Families who are concerned about the future may wish to speak with a lawyer who specializes in trusts and trust administration to review all their estate documents. By conducting a thorough overview of existing plans, an attorney can help people update them to correctly reflect their goals for their assets.
Source: Forbes, "Why You Might Need To Fix Your Family Trusts," Russ Alan Prince, October 17, 2018