PB Law Blog... Trusts and Stuff

Monday, August 13, 2018

Back-to-School Checklist: A Reminder to Reassess your Financial Planning (Part 2)

For many families, this week marks the beginning of a new school year.  This week, we continue with the academic theme, and give you Part 2 of the Back-to-School Checklist.  In this final segment, we are discussing the importance of updating your trust documents and planning for the holidays.


Update Your Trust Documents

Established revocable trusts may be amended or restated at any time during the grantor/s lifetime.   An amendment addresses specific provisions that need to be changed, while all other provisions of the trust remain legally binding.  A restatement of a trust is a completely amends the prior trust; the restated trust supersedes any prior trust document.  For minor changes (i.e. changes in names, beneficiaries, assets, etc.), an amendment is probably sufficient.  However, if there are too many changes required or the assets become more complex, a restatement may be a better idea in order to eliminate confusion and/or contradicting terms.  Items that may prompt a change to your estate plan:

·         Beneficiaries and Trustees – adding or changing beneficiaries and/or trustees from your trust usually requires an amendment, especially if you are specifically disinheriting somebody or changing a trustee.  Although a major benefit of having a trust is that protection from unnamed/unwanted beneficiaries.  However, if an existing beneficiary is not specifically disinherited by amendment, they may still be able to collect under the original agreement.  Alternatively, if your intention to provide for a beneficiary is not explicitly stated in the original trust, an amendment adding the beneficiary is essential to insure their inheritance.  Trustees broad acting authority over the trust itself.  They are in charge of following the provisions in the trust and making sure the wishes of the grantor/s are carried out.  Although trustees are legally bound to act with good faith, giving that much discretionary power over your assets is a big job requiring someone who is trustworthy. 

·         Real Property – If your trust owns your real property, any changes to the property ownership must be provided for in the trust to insure proper recording and title.  A more common issue is newly acquired property. In 2017, 5.51 million existing homes and 612,000 newly constructed homes were sold, according to the U.S. Census Bureau (source).  Remember, a properly funded trust will avoid probate issues!  If you purchase new property, titling the property in the name of the trust is essential so that the trust provides for the distribution of the property.  If the property is not titled in the name of the trust, you may run into some issues!  If you are thinking of acquiring new property or you have recently, meet with your estate planning attorney to make the proper changes!

·         Growing Your Trust – Reassessing your financial position and the protections afforded to your assets in your current trust is vital!  If you have accumulated more wealth or assets in the past year, there are many planning tools to maximize asset protection.  Asset protection trusts are amongst the most popular because of their high-level of security and their ease in establishing (read more about asset protection here).  If you are finding yourself wondering how to allocate newly acquired assets, it may be time to add to your estate plan!

Set an annual reminder to look up your trust documents and make any changes needed as life continues to transpire!



As we all know, once the school year starts, the rest of the year flies by.  Holidays are a major expense for many households and require adequate planning.  Although, many of us are not ready to give up pool time just yet, take an hour to create a spreadsheet/chart for your holiday plans.  Are you planning on taking a trip over the holiday season?  Multiple trips?  Organizing dates and price shopping now will enable you to maximize family time and save money.  Also, the holidays are a time where gift giving is more pronounced than any other time of the year.  Incorporating gift-planning into your holiday goals will ease the burden of last-minute shopping and establish a budget that you can plan on.  If your holiday plans require a distribution from your trust, now is a great time to consider how that will affect your assets. 


Establishing a Trust

Of course, this checklist would not be complete unless we addressed the need for establishing a trust!  Along with your preparation for school, holidays, and the new year – look at the benefits of establishing a trust (read more here).   Whether your assets are big or small, providing protection and asset management is priceless.

This completes the Back-to-School Checklist; however, we encourage you to re-visit these topics continuously throughout the year.  While your student is immersing themselves into a new academic journey, take this time to hone in on your long-term and short-term goals, organize them, and turn those goals into plans!    

“Education is for improving the lives of others and for leaving your community and world better than you found it.” Marian Wright Edelman



-by Laura Bown, J.D. with Tiffany Ballenger Floyd, Esq. (Nevada & California Estate Planning Attorney), © 2018, Phillips Ballenger, PLLC

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