Orange County Probate and Estate Planning Blog

Trust Matters

Posted by Mary G. Finlay | Jan 09, 2017 | 0 Comments

If you are lucky enough to own a home, it is likely that you currently have done some type of planning for after your demise. However, how long has it been since you looked at the documents in that shiny red folder labeled estate plan? If you are like most clients I know (including yours truly), the only time, if ever, you even glance at the documents is when you a re-financing your home and the lender asks for a copy of your trust. It may be time to dust off the folder and ask yourself the following questions.

Is your selection for successor trustee still appropriate?

Typically, clients are motivated to do estate planning when their children are young and they are worried about who will take care of their brood if something should happen to them. As such, they appoint Aunt Suzy as guardian of the children and successor trustee of the trust. Once the children are grown, it is likely that the children can take care of their own affairs and don't need (or want) Aunt Suzy's input. Look at that trust and make sure that your selections for successor trustee are still appropriate.

Have your intended beneficiaries changed?

Most parents name their children as beneficiaries of their estate. Unfortunately, the parent/child relationship can break down for a variety of reasons. Or, one child needs more help than the others. For whatever reason, you may want to update your trust to reflect your current wishes with respect to the disposition of your estate.

Is your trust properly funded?

One of the most prevalent problems I deal with on a regular basis is trusts that are not properly funded. Think of your trust as a basket. You need to put your property into the basket if you want it to pass under the terms of the trust. If you die with an empty basket, the trust can be rendered useless. Did you refinance your home and forget to put it back in the trust? Have you acquired other assets that should be titled in the name of the trust? If the answer is yes, there is an easy fix that can save your heirs a lot of headaches.

Have tax laws changed so that the trust should be reviewed?

Previously, I recommended that married clients employ an A/B Trust to maximize the amount that can pass to heirs free of estate tax. Several years ago, tax law changed and the tax code adopted what is called “portability”. Without getting too technical, it basically eliminated the need for A/B trusts for estate tax purposes. While there may be other reasons to employ an A/B trust, for a lot of clients, the need for the A/B structure was eliminated. If you have an A/B trust, you may want to consider amending in light of tax law changes.

If any of the answers to the questions above is yes, feel free to give us a call at Finlay Law Group. We would be happy to ensure your estate plan reflects your current situation.

About the Author

Mary G. Finlay

Orange County Estate Planning Lawyer When I was in law school, all my friends and family were so supportive and proud of me. Once I graduated from law school and passed the bar, however, I suddenly became a member of one of the most loathed professions in the world. Everyone clamored to tell me ...


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