As real estate investors and small business owners, it is very important to have your affairs in order at all times. You never know when things might happen. Most will take the time to create their estate plan including their Living Revocable Trust, but then have life happen, and things change. So today, Lee Phillips shares in his video when and How to Update your Living Revocable Trust:

One question I often hear is, “Does my Living Revocable Trust need to be updated?” The answer for most people is no—assuming it was done properly in the first place. We haven’t seen any significant legal changes that require updates to a Living Revocable Trust for nearly 40 years. Even then, every state except California stepped in to clarify that if your old trust followed certain rules, those rules would apply under the new law. So legally, you likely don’t need to update or restate your trust.

When Should You Update Your Living Revocable Trust?

While legal changes might not require an update, your personal life might. Lawyers often recommend an annual review of your trust, but this is more of a way to generate fees. However, about every 10 years, it’s worth considering a review. Life changes—like having children, watching them grow, gaining grandchildren, selling a house, or other significant events—often require an update to your trust.

What Kind of Changes Require Updates?

There are different levels of updates:

Minor Changes: If you just need to change trustees or make small adjustments, you can typically do this with a simple amendment. Your trust should include language that allows for amendments, and I’m happy to send you a sample amendment language to use—just email info@legalees.com to request it.
Major Changes: If you need to overhaul your trust, for example, if your original estate plan included an A-B Trust to avoid estate taxes, it may now be outdated. Since estate taxes aren’t as much of an issue today, you might not need such a complex structure. In this case, you’ll likely need to restating your trust entirely. Restating means rewriting your trust from the ground up, and while it can be a bigger process, it ensures that your plan is updated for today’s laws and your current situation.

Steps After Updating Your Trust

Whether you make small amendments or totally restate your trust, you’ll need to take steps to ensure your assets and property remain properly included in the trust. While most terms remain intact, it’s essential to double-check everything to make sure your updates apply.

When to Start Over

In some cases, if your original trust was poorly written, you may need to completely rewrite or restate it. Unfortunately, this process can cost as much as creating a new trust. And many attorneys won’t even review an old trust from another lawyer—they’ll want to start fresh.

To sum up:

Small, minor changes can be made with an amendment.
Larger, significant changes will likely require a full restatement of the trust.

If you want to learn more about using a trust or how to update your trust, you can download a free copy of my eBook, “How to Use a Trust,” at https://legalees.com/using-a-trust-ebook.

For help with specific amendments, email me at info@legalees.com to request sample amendment language.

Additionally, join us for an upcoming Master Class on Saturday, November 16th, titled “Generational Wealth with the Right Estate Plan.” Don’t leave your heirs with a mess—learn how to protect your wealth for future generations. Get all the details for this event here.