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Reviewing Your Estate Plan

September 22, 2012

Many people never review their trust after leaving their estate planner’s office.  Unfortunately, failing to review your trust periodically can lead to unintended and costly consequences for your beneficiaries.

First, you should periodically check your trust and financial records to make sure all assets that should be held in the trust are appropriately titled.  This is especially important for real estate in the Bay Area, where so many homeowners have refinanced in recent years.  Failing to effectively “fund” your trust may require a probate or lead to adverse tax consequences after your death, defeating the primary purposes of having a trust.

Additionally, every time a significant change in a beneficiary’s circumstances occurs you should take another look at your trust to make sure it still reflects your intent.  These circumstances can include marriages or remarriages, substance abuse, sudden unexpected economic hardship, or death.  All of these can affect how you want your assets administered after your death; but, obviously, if you don’t amend your trust, your successor trustee may be powerless to effectuate your intent.

There is legal authority that allows a trustee to petition the court to modify the terms of a trust after the settlor’s death.  If a beneficiary chooses to object, however, the cost of litigating the dispute can be considerable, leaving less of your estate for your beneficiaries.  Furthermore, if the trustee is also a beneficiary, the trustee runs the risk of violating the trust’s no-contest clause, thereby by losing his or her inheritance.

You should review your estate planning documents and financial records when significant life changes occur, or every few years irrespective of changed circumstances.  In doing so, you can potentially save your beneficiaries significant emotional stress and economic loss after your death.


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