Seven Life Events That Can Undermine Your Trust

 In Wills & Trusts

Your trust is designed to protect your family and ensure that your financial goals are achieved when you pass away. But those goals can only be achieved if your trust is continually updated to reflect any significant changes in your life. These changes might include the following:

A Change in Your Health

In the event of a stroke or the onset of dementia, your trust may do nothing to protect your assets against a long term illness or condition.

An Unexpected Change in Wealth

For example, when you wrote the trust you had a net worth of $1 million. Your current net worth of $2 million will trigger a state estate tax you never anticipated. In the case of a married couple, your original net worth might have increased from $9 million to $15 million, exceeding the federal estate tax threshold and triggering an unplanned federal estate tax liability.

Changes in the State or Federal Tax Code Affecting Your Trust

The tax codes seem to change on a daily basis so your estate plan needs to reflect modifications related to tax thresholds, gift taxes, or the treatment of out-of-state residents.

Your Successor Trustee Has Died, Moved Away, Gotten Sick, or Let You Down

Whatever the reason, if your successor trustee is not the person you would chose today, then you need a replacement.

Disputes or Foreknowledge that Disagreement Is Possible

Heirs and trustees often disagree about matters like keeping a vacation home, selling a business, or how to care for a disabled or elderly relative (perhaps you).

You Lent or Advanced Funds to a Child

If the loan is not in writing and/or you did not adjust your trust to reflect this arrangement, the child and other heirs may have differing versions of the terms.

A Child Is Going Through a Rough Patch

The Killer Ds™ refer to divorce, debt, disability, destructive habits, or death. If any of these apply to one of your heirs, you’ll probably want to modify the terms of how and when the assets are distributed.

A little dialogue goes a long way in determining whether your estate plan in general and your trust in particular are optimized for your current life situation. Call us today to start the conversation.

Do you have an existing trust or estate plan that might be ready for a review? Check out these Ongoing Support Programs.

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