*This blog contains general information and is not meant to apply to a specific situation.  Please seek advice of counsel before proceeding as each case is unique.

Now that most of us have trusts (or have been thinking about getting one…sometimes for several years!) we need to know how often to review the documents.  There are those (you know why you are!) who sign the trust, pack it away, and never, ever look at it again.  

First, it is a good idea to go over the trust and the Will after the initial flush of accomplishment has faded.  Really look at the trust to be sure you understand what it does.  Is it a revocable living trust for a couple?  Does it split into sub trusts at the first death?  Is the split mandatory or discretionary?  Who are the successor trustees?  You will need the answers to these questions in order to understand when to review the trust at a later date.  Those pesky warnings in the newspaper may mean more, also.

For example, you might be hearing that the Federal Estate Tax is no longer in existence.  This means that the estate of all those who die in 2010 will not have to pay the Estate Tax.  But wait.  Did you know that it returns next year?  That’s right, the current law provides that any decedent’s estate worth more than $1,000,000 next year will pay tax at a rate of forty-five percent on the amount over $1,000,000.  This information means more in the context of your own estate plan.  If a couple’s estate is worth $1,500,000 and one dies next, but has a living trust that splits at the first death, you may be covered and pay no estate tax at the second death.  

Second, it is a good idea to review the trust each year.  Do you still have faith in the named successor trustees?  Has your daughter matured enough so that she can receive her inheritance at age thirty, instead of, sixty?  Has your son joined a cult leaving his wife and ten children?  You may want to amend the trust and give his share of the estate in trust for the support of the children.

Third, be sure to update the list of trust assets anytime an asset is sold or acquired.

Brown Law Offices

Diane M. Brown, Attorney at Law (specializing in trusts and estates)
14130 Winchester Blvd., Suite G
Los Gatos, CA  95032
Voice: 408-376-2755
Fax: 408-376-2763

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