People in Rochester, New York and the Finger Lakes region often create a living trust when they create a comprehensive estate plan. As we’ve discussed before, living trusts have a number of benefits when it comes to estate planning, but they do require some additional work on your part to make sure they operate as you intended them to. Like many parts of your estate plan, you will often need to review and amend your living trust as your circumstances change. Here are several situations that might prompt you to update your trust.
Your marital status changes.
Any time you get married, divorced, or receive an annulment, you must carefully go over your estate plan and make some necessary changes. For example, if you created a living trust while married and named both you and your spouse as co-trustees, you’ll have to amend that trust after you get divorced. The property the trust owned will likely be divided between you and your former spouse as a part of the divorce decree. Transferring that property out of the trust and into either your name or your ex-spouses name is essential. Also, if you want to create a new revocable trust after the divorce, you will then have to re-title your property into the new trust’s name.
You have a new child.
Whether you are new parents, have a new child, or adopt a child, any addition to your family should also prompt you to review the terms of your living trust. You need to pay special attention to the living trust terms that state how the property will be distributed after you die. In most situations, you will want to update these terms to reflect the new child and to allow for an inheritance.
Moving from one area of New York to another area in New York typically doesn’t require you to update your living trust terms. However, if you move out of state, or recently moved into New York from a different state, you will want to at least review the terms of the trust. Depending on your circumstance,s you might need to revoke your old trust and create a new one, or simply amend some of the old trust terms.
Something happens to a trustee.
Most people who have a revocable living trust name themselves as trustee. Others, on the other hand, name a trust company, professional advisor, or someone else to act as trustee. In any event, should something happen to the trustee, or replacement trustee, that makes him or her unable to manage the trust, you will need to update the trust terms to reflect that new reality.