A trust allows you to pass your assets to your beneficiaries in a way that typically prevents legal battles. Due to its complicated nature, you may have built a trust that you hoped would last.
However, life is messy, and things change quickly. Therefore, there are times when you should review and modify your trust.
Types of trusts
You can typically choose to create a revocable or irrevocable living trust. An irrevocable living trust is difficult to amend, change or revoke and may require a court appearance. However, you can amend or revoke a revocable living trust. If you seek major changes, it may be worthwhile to revoke the original trust and write a new one.
When to modify a trust
Major life changes can have a significant outcome on your end-of-life decisions. For example, marriage, divorce, adoption or birth of children can change your beneficiary desires. You may also want to change your trustee or any of your beneficiaries. Also, if one of your beneficiaries dies, you should remove them from your trust.
You should also modify your trust if your financial or legal situation changes. For example, you may purchase new property, add life insurance or other assets to your portfolio or sell assets. In addition, you should watch state inheritance laws, especially if you move to another state. These new regulations may affect your trust, requiring a modification.
To keep your trust up to date, review it regularly, at least once every few years. If your life changes significantly, immediately review and modify your trust. Maintaining your trust should prevent any legal challenges for your beneficiaries.