Intervivos: Reviewing Your Estate Plan


Reviewing Your Estate Plan

A common question I am asked when helping families set up their estate plans is, “How often do I need to update my trust?” Unfortunately, there is no simple answer. I find myself giving the traditional attorney answer of “it depends.” There is no universal answer to this question because there is such a broad spectrum of family dynamics. As a general rule, it is good to review your plan after a major life event.

Here are some things to keep in mind when determining whether your estate plan needs a tune-up:

1)   Changes in law. Laws are constantly changing at the federal, state, and even local levels.  For example, one of the changes affecting medical documents went into effect January 1, 2009.  If you did your estate plan prior to that date, it would be a good idea to update your medical documents. Another example would be changes in tax law affecting estate taxes. Fortunately, recent changes have raised the exemptions, however, laws are always subject to change with different administrations.

2)   Changes in family. As time passes, the preferred person to administer your affairs may change. For example, I recently met with a client who originally listed his father as the successor trustee, financial agent, and medical agent in case of his incapacity or death. My client’s father had been the natural choice to handle his estate at the time he designed his estate plan. Just two years later, my client’s father was diagnosed with cancer and my client decided that a change was necessary.  

3)   Changes in assets.The most likely asset to drag you into probate is real property. When I first started working as a wet-behind-the-ears attorney down in Spanish Fork, a fellow attorney had me review the estate plan of his client’s deceased mother. His client’s mother had paid a substantial amount to set up a trust and his client was now told that her mother’s estate would have to be probated. As I reviewed the trust, I quickly realized that it was well written. However, in my review of the recorded deeds at the county, I discovered that the deceased mother’s home was still titled in her name rather than the trust name. Unfortunately, the well-written trust had not been funded properly and the estate had to be probated. Another common issue arises when a family purchases a new home and fails to transfer title to the trust. Recording a simple deed with the county recorder can make the difference between probate and probate avoidance.

If you have questions about the validity of your estate planning documents or whether your trust is properly funded, please give me a call. Be sure to mention this article for a free document review.

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