After setting up revocable living trusts, too many people think that their estate planning is done, once and for all, and can be checked off the list. The fact is, however, that regular reviews are essential. Here are five of the most important reasons you should schedule a review below.
Revocable living trusts offer a variety of great tax benefits. The tax code, however, is constantly being changed and updated. If you don’t review and update your revocable living trust to reflect the latest laws, you could be missing out on some very significant tax advantages. If, for example, tax codes are changed to allow higher levels of tax-free gifts, it may make sense to remove assets from a revocable trust and gift them to a loved one now.
Updates to estate tax exemption laws can make a huge difference on how your revocable living trust should be configured. If federal law changes to reduce the estate tax exemption, for example, it may become desirable to put additional assets into the trust to minimize the overall tax burden. Tax code changes can have dramatic effects, which is why it is so important to ensure your revocable living trust reflects the latest changes.
One of the most common reasons a revocable living trust should be updated is because of changes in life circumstances. If you come into a significant amount of extra money, you’ll probably want to add it to your trust. If one of your heirs passes away or you no longer want to include them in the trust, a simple update can be made to reflect these changes. Revocable living trusts are meant to be adjustable over the years, and having them reviewed is the best way to do just that.
Revocable living trusts provide many great advantages, but protecting assets from the costs of long-term care is not one of them. If you or a loved one may need to go into a nursing home or long-term care facility, it may be time to close out your revocable living trust and open an irrevocable Medicaid trust (or something similar). This can help to protect your estate from the massive costs associated with long-term medical care needs.
Last, but certainly not least, keeping your revocable living trust updated properly can help ensure you take advantage of ensuring the portability of many benefits from one spouse to another. When one spouse passes away, their estate tax applicable exclusion amount can be ported over to the surviving spouse. The surviving spouse can then use it as part of their own estate planning. If the trusts are not updated regularly, however, couples could miss out on this money saving option.
Do you question the need for attorney guidance with so many online resources? Because laws and regulations are complex, and because every person has a lot at risk, more people than ever are seeking professional guidance from an experienced, knowledgeable source. That helps explain the rapid growth of our firm. Whether you happened upon this website by accident or are one of the many referrals we receive from a nearly 15-year collection of satisfied clients, our staff can provide customized estate planning guidance for you. Call us. Our number: 1 (772) 218-0480