When to update a living trust

Revocable living trusts are a great alternative to a will because of the estate planning benefits that they provide, the most important being the ability to skip the probate process. However, just like a will, you must think about updating your living trust to reflect any major life changes that have occurred since it was first created. 

Most attorneys and financial advisors recommend that you should review your estate plan every three to five years. Things change in our lives, some expected like aging, and others unexpected such as being diagnosed with a chronic or terminal condition. Periodically reviewing your trust will ensure that it includes everything you want and that your wishes for how your assets are to be distributed are still relevant and current.  

One of the other benefits of a revocable living trust is that it can be amended and even revoked at any time during your life. While changing a living trust is not that difficult, it does take some preparation. 

Major moments when you should make updates

While you can amend or revoke your living trust at any time, it’s a very good idea to review your trust and make any necessary changes. Reasons to make updates include:

  • Marriage
  • Divorce
  • Birth or adoption of a child
  • Death of a beneficiary
  • The acquisition of new property that you want to add to your trust
  • Moving to another state where the inheritance laws are different

You may also want to make amendments to your trust if you want to add or remove a beneficiary, change the current trustee or successor trustee, change the way your assets/property are to be distributed, which assets/property are part of your trust, or change your name.

If you’re considering amending your trust or are not sure whether your situation warrants living trust amendments, you should discuss your concerns with a living trust or estate planning attorney.

Let’s talk about your house

If you are selling your house after it has been transferred into your living trust, you have two options. The most common approach is to sell your house directly from the trust. In this scenario, the trustee, which is most likely you, is the seller. The second option is to first transfer the house out of the trust and back to you. Once you are the owner, you can proceed with the sale.  

Refinancing your home is also possible if it’s held in your living trust, but the lender may require some additional steps to complete the refinancing process such as requesting that you transfer the home out of the trust and back into your name as part of the refinance transactions. 

An experienced living trust attorney can help you in understanding the requirements for refinancing your home if it’s part of your living trust. At the Law Office of David W. Foley, living trust attorney in San Diego, we specialize in creating living trusts and have developed living trust services that can bring clarity in times of need. 

Schedule a consultation with one of our estate planning attorneys.

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