Why Maintaining Your Trust Is So Important

Many of us know that a trust is a great estate planning tool. When used correctly, a trust will enable you to leave your estate to your loved ones, without the time and expense of going through the probate process.  The problem is however, many people have a trust created but may not have been properly instructed how to maintain it over time. As far as they know, they have taken care of their estate planning documents, breathe a sigh of relief and file the document away without a second thought.

A trust is only as good as the assets that are in the trust. If an item isn’t put in the trust and the person passes away, that item must go through the probate process, and the trust is ineffective. When this happens, the wishes of the decedent aren’t honored, and the family is left to contend with the time and expense of the probate process.

We had a client that ran into this situation. His mother had passed away, and her house had been left out of the trust. He came to us for help. While he knew that his mother intended for the house to be in the trust, it was not. Therefore, our client would have to contend with probate court to get ownership of his mother’s home.

We went to court for him and submitted what is called a Heggstad Petition. We asked the judge to include the omitted asset and honor the original intent of the decedent. In this instance, we were successful.

We see this scenario quite frequently. It is important to be aware that after you have created a trust, it needs to be funded properly. Also, your trust needs to be reviewed periodically to ensure accuracy. As things in your life change, you may need to add or subtract items from your trust. A few things that could change your trust include:

  • Buying and selling property;
  • Refinance of a property;
  • Having children, or when children get older requirements may change;
  • Marriage or divorce;
  • Change in tax laws;
  • Change of executors, trustees or beneficiaries.

If you have a trust and aren’t sure if it is funded correctly given your current circumstances, give us a call. We can sit down and review your documents to ensure that they reflect your current wishes. If you would like to make an appointment, just hit reply to schedule a Get Acquainted Call.