A trust is a tool, not a talisman, and tools need regular maintenance and attention. Here are six common life events that can make it critical to update your Estate Plan.
1. Change in your marital status. If marriage is on your horizon—Congratulations! Also, when can we meet? Marriage is one of the most important legal relationships you will ever experience. It has profound implications for your estate plan, particularly if two families are coming together. It is vital to ensure that your estate plan is updated to reflect your wishes. If either one of you has children or assets from a previous marriage, you may want to consider a prenuptial agreement keep things separate.
2. Change in status of a beneficiary. This could be a birth, death, adoption, marriage, or divorce of one of your beneficiaries. These are critical life events that may influence how you want to distribute your estate. You may want to include a new arrival (or exclude a black sheep)! Alternatively, one of the objects of your affection may develop an illness or handicap, requiring a special needs trust to protect his assets. The sooner you act, the better.
3. Death or incapacity of a spouse. Did you know that it is a fact that either you or your spouse will die first? When you’re finished laughing, call us. Many trusts are designed to divide into two or more trusts upon the death of one of the settlors. This type of trust is known as an A/B Trust, and is commonly used, among other things, to avoid estate taxes, protect the interests of blended families, and to minimize the effects of fraud and undue influence. Depending upon the trust and your situation, legal action may be needed to protect the surviving spouse and other heirs.
4. Trustee, executor or other agent needs to be changed. It is critical that the individuals who will manage your trust and estate be competent and appropriate for the task. Just because someone was appropriate 20 years ago doesn’t mean they’re appropriate today. If you’re in your 60’s you really should not appoint your parents to be in charge of anything. This will change with time, and needs to be reviewed on a regular basis.
5. Minor beneficiary comes of age. When a minor comes of age it can mean that they’re able to get anything you leave for them as soon as they want it and that may or may not be in line with your wishes. We can look at that and we can help!
6. Big change in net worth. As I write this the stock market is undergoing wild swings. Dramatic changes in your net worth can make previously sound distribution decisions unrealistic. Particularly if your net worth is headed north, you should review the impact that estate taxes can have, and strategies for avoiding them.
Trusts are client specific and one size does not fit all. Just like any other tool, you should review it regularly with an experienced professional to ensure it still does what its supposed to. At the Law Offices of Quinton J. Miller, we have the experience and expertise you should demand when it comes to your estate plan. We know the questions to ask to accomplish the goals you seek. Call us at (916) 714-1717, or visit us at www.quintonlaw.com. Call us before you need us!