Updating your living trust in 2021

2021 is just around the corner, and maybe one of your New Year’s resolutions should be updating your living trust. Most lawyers as well as financial advisors suggest reviewing and updating your estate plan every three to five years, including your will and/or any living trusts.

If the COVID-19 pandemic has taught us anything it is that our personal circumstances can change significantly in a matter of days. And we’re still not sure what next year will bring with volatility in the stock market, many businesses on pause, and the courts still being limited in the number of filings that they can handle. Therefore, it’s important to take some time now or in January or February, to review your living trust, to assure it still includes everything you want it to, and that it’s current. 

Reasons to update your living trust include:

  • Marriage
  • Divorce
  • Birth or adoption of a child
  • Death of a beneficiary
  • Acquiring new property that you wish to add to your trust
  • Moving to another state in which the inheritance laws are different
  • You wish to change a beneficiary, trustee or successor trustee, the way property is distributed, which property remains in the trust, your name
  • You wish to add a beneficiary.

Annual review

Have you experienced a significant change or changes in your life? Either way it’s time for an annual review of your living trust. If the changes in your personal situation affect the terms of your trust, you can make living trust amendments to reflect those changes, or you can choose to revoke your trust.

Revoking a living trust in California isn’t difficult, but there are a few things that you have to do to make that happen. Most trust documents will state the method of revocation; for example, a very common provision found in many trusts states that the grantor has the right to amend or revoke his or her trust by a signed written document delivered to the trustee. 

Revoking a California living trust can also happen if the settlor takes a particular piece of property out of the trust. An example is if you’ve placed your house into the trust. You can revoke the trust as to that asset by filing a new deed, thereby transferring the house out of your trust.

You can also choose to do a “restatement” of the trust if you find that you need to make substantial changes to it. A restatement does not revoke the original trust, but recreates it so you keep the original trust with the property that’s already in it. It allows the trust to be rewritten as a new document with any necessary changes, avoiding the confusion of an amendment.

Don’t yet have a living trust?

Need to make amendments to your living trust or want to revoke it? Consult an estate planning attorney to advise you as to which option is best for your situation. And, if you don’t already have a living trust, a New Year’s resolution for 2021 should be to create one.

At the Law Office of David W. Foley, living trust attorney in San Diego, California, we specialize in creating living trust as part of a comprehensive estate plan. Call to schedule a free consultation over the phone or in person.

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