You’ve taken a meaningful step by creating an estate plan that includes a trust—well done! This decision reflects your commitment to protecting your loved ones from family court battles and conflict, making sure your wishes are clearly understood and respected, and avoiding unnecessary stress or confusion for your family. That’s a big achievement! However, it’s important to remember that an estate plan isn’t something you create once and forget about. It’s a dynamic set of documents and tools that require ongoing attention and updates to ensure they will function properly when your family needs them most—and not fall short at a critical time.
Think of it this way: Would you keep wearing clothes you bought twenty years ago without making sure they still fit? Probably not. In the same way, your estate plan—including your trust—needs regular check-ins to make sure it still fits your current life, assets, the legal landscape, and personal wishes. Let’s take a closer look at why reviewing your estate plan regularly is so important and how often you should be reviewing it.
Life Changes, and Your Trust Should Also
Life rarely stays the same for long. Since you created your trust, you have likely experienced changes in your personal and financial life. Each of these changes can impact how effective your trust will be in protecting your assets and providing for your loved ones.
Major life events—like getting married, going through a divorce, or welcoming a child or grandchild—can significantly change your family dynamics and your intentions for your estate plan. These milestones often require updates to your plan to reflect your current wishes. For instance, if you have recently had a new grandchild, you may want to add them as a beneficiary in your plan. On the other hand, if you have divorced, it is likely you will want to remove your ex-spouse from your trust and other planning documents.
Your financial landscape is constantly changing. Maybe you have bought new property, launched a business, or received an inheritance. These new assets need to be properly included in your trust.
If they are not, they could end up going through probate—undermining one of the main reasons you created a trust in the first place.
Even changes in your relationships can necessitate updates to your trust. The person you appointed as successor trustee five years ago might no longer be the best choice. Without regular reviews, your trust may not accomplish what you currently intend, potentially leading to conflict among your loved ones or assets being distributed in ways you no longer want.
Laws Change, Even When Your Wishes Don't
Even if your circumstances haven’t changed much, the legal and tax environment is always shifting. These changes can have a major impact on how your trust functions and how well it protects your assets, making regular reviews essential.
Tax laws, in particular, frequently change with new administrations and shifting political priorities. For instance, the Tax Cuts and Jobs Act of 2017 doubled the federal estate tax exemption, dramatically changing estate planning considerations for many families. That law is about to sunset if Congress does not act to update it. If your trust was created before this change, it might contain provisions that are no longer necessary or beneficial under current law. If the law changes, you trust may need updates to reflect the old law as it reverts.
State laws governing trusts and estates also change regularly. These modifications can affect everything from how your trust is administered to the rights of beneficiaries. Without regular reviews, your trust might not take advantage of beneficial new laws or might run afoul of new requirements.
By reviewing your trust periodically, you can ensure it remains compliant with current laws and takes advantage of any new beneficial provisions. This proactive approach helps protect your assets and your loved ones from unexpected legal complications.
How Often Should You Review Your Trust?
Given the importance of keeping your trust updated, you might be wondering how frequently you should review it. While there's no one-size-fits-all answer, there are some general guidelines that can help you determine the right schedule for your situation.
As a baseline, we recommend reviewing your trust annually under our VIP Membership Program, even if you don't think anything significant has changed. This regular schedule helps ensure you don't overlook gradual changes that might have occurred in your life, your assets, or the law. If you are not in our Membership Program, we recommend that you at least review your plan on your own every three to five years, so that you can make sure your plan is tracking with the changes in your life.
However, certain life events should trigger an immediate review, regardless of when you last updated your trust:
- Marriage, divorce, or the death of a spouse
- Birth or adoption of children or grandchildren
- Death of a named trustee, guardian, or beneficiary
- Significant changes in your financial situation
- Major changes in tax or estate planning laws
The Consequences of an Outdated Trust Can Be Severe
Failing to review and update your trust regularly can lead to serious consequences that undermine your initial reasons for creating it. These consequences can range from financial losses to family conflicts that could have been avoided with proper planning.
One of the biggest risks is that assets you have acquired after setting up your trust may not have been properly transferred into it. This process, known as trust funding, is essential to keeping those assets out of probate. If you have bought new property, opened new accounts, or gained valuable assets without moving them into your trust, those items could still end up in probate—defeating the very purpose of having a trust in the first place.
An outdated trust can also lead to unintended beneficiaries receiving your assets. If you have not updated your trust after major life changes, your assets might go to people you no longer wish to benefit—or might not go to those you do want to include.
Family conflict is another potential consequence of an outdated trust. Unclear or outdated provisions can leave your loved ones arguing over what you really intended. These disputes can damage family relationships and lead to expensive, time-consuming litigation.
Tax consequences can also arise from an outdated trust. Changes in tax laws might mean your trust no longer minimizes estate taxes effectively. Without updates to address these changes, your beneficiaries might face larger tax bills than necessary, reducing their inheritance.
Finally, know that reviewing your trust does not always mean you will need to make changes. Sometimes you will find that your current trust still perfectly reflects your wishes and circumstances. Even then, the review process is valuable for refreshing your understanding of your plan and giving you peace of mind.
Don't Leave Your Family's Future to Chance
Your trust is more than just paperwork—it is a powerful expression of your love and intention to support your family, even after you are gone. By reviewing and updating it regularly, you continue to show that same thoughtfulness and responsibility. It also helps spare your loved ones from unnecessary confusion, conflict, and expensive legal battles during an already emotional time.
At Adams Law Office, LLC, we are here to support you in this ongoing process. We understand that reviewing legal documents is not high on anyone’s list of favorite activities, but we strive to make the process as simple and painless as possible—and we build it into our ongoing services once we begin working together. Don’t leave your family’s future to chance. Review your plan today and let us know if we can do anything to help you bring it up to date with your current wishes.
Book a consult today to get started!