Common Questions

(1) Completing a Living Trust & Pricing

(2) Titling Assets in Your Trust

(3) Changes In Marital Status

(4) Amendments, Reviews, & Changes

(5) Why & When To Review & Update A Trust

(6) Why You May No Longer Need or Want An AB or ABC Trust

(7) Important Issues When Someone Dies or is Dying

(8) Real Estate Issues

(9) Medical Directives

(10) Granting / Obtaining Signature Power

(11) Trust Copies & Originals

(12) Incapacity Issues

(13) Confidentiality Issues & Policies

Why & When To Review & Update A Trust : Why a Review

1. Prudence Dictates Periodic Reviews of Your Estate Plan: Because life, laws, holdings, and circumstances often change, time erodes and “detunes” the best estate plan (regardless of whether it is a trust, will, or other alternate method). Thus prudence dictates an ongoing strategy of revisiting these matters as we survive long enough to outdate our estate plan. How often that is depends upon changes in the law and changes in your life, wishes, circumstances, and holdings. Experienced professionals advise a review every three years but the given pace of events and/or change of circumstances can accelerate or decelerate the need. Yet, since we can’t track each client’s life or predict future law changes, we therefore advise following the three-year rule of thumb (or sooner if there is a major change in circumstances). Unfortunately, some view this as a ploy to generate business, but such is not the case. This is reasonable and prudent advice you would receive from any experienced estate planning professional looking out for your best interests. The decision is ultimately yours but our advice remains the same. The need to revisit and review your estate plan is a price of survivorship (a tradeoff most of us would gladly make). The potential cost and trouble of being caught with an outdated estate plan far exceed the cost of any review – and it is only you, or your spouse and your family, that will pay the ultimate price of a stale or outdated estate plan.
2. Drastically Increased Estate Tax Exemption: The Economic Growth and Tax Relief Reconciliation Act of 2001 raises the amount that taxpayers can exempt from estate taxes with increasing amounts phased in over the period 2002 through 2009. In 2010 the Estate Tax is scheduled to expire altogether. Because of these changes in the law, what was good strategy when you completed your trust, may no longer be so.




Year	Exemption (per person)
Pre 2004	$1 Million
2004 & 2005	$1.5 Million
2006, 2007 & 2008	$2 Million
2009	$3.5 million
2010	$ Unlimited b/c estate tax eliminated that year (repealed)
2011 and thereafter	$ Good Question (or $1 Million if Congress does not act)




3. However, unless Congress and the President enact additional legislation before 2011, the Act returns the exemption to the pre-2004 level of $1 million. Though the future of the estate tax and exemption remain in flux (and subject to change) increasing exemption amounts provide compelling reasons to consider a review.
4. Simplified Options For Married Couples: If you are married we have incorporated language and options that now have the ability to better adapt to the “evolving exemption amount” wherever it (the exemption) happens to finally settle or be when someone passes away. Specifically, most married clients are now opting for the “Non AB with Disclaimer approach” (discussed in the enclosed worksheet). This approach can save the surviving spouse from being stuck with the hassle of a trust structure (justified under the old exemption) they potentially no longer need (because of the new larger exemptions). It offers far greater flexibility and options to the surviving spouse than the traditional A-B (C) trust approach which you likely opted for when you completed your trust (because of the tax situation at the time). The cost of this update and review are nothing when compared to saving you from a structure you no longer may need. Bottom line: The optional/simplified trust structure can result in far less paperwork and hassle for the surviving spouse. You can learn about it in the “Married Couple Trust Worksheet” – something that is very important for both of you to read. Regardless of the increased exemption you still need a living trust to avoid probate. (It is only the structure of the trust that you potentially need to change). You don’t want you or your family to have to go through probate! (If you have any doubts about the need to avoid probate call for our free video.)
5. Current & Improved Legal Language, Drafting, Flow, Layout, and Package: Legal wording, concepts, laws, and techniques are in a state of constant evolution. As these changes occur there is an ongoing effort on our part to continually update, refine and improve upon our package to reflect the most current laws, findings, and optimal techniques. Over time we do make changes and improvements to our system and our trust package. Though many of these changes may be subtle and small, they add up over time, and do make a difference. It is important that your trust not be too dated in these regards. In addition to more current language, the layout, flow, and readability of the trust has improved significantly over time. We now also include many “just in case forms” with our package.
6. Newly Overhauled Health Care & Medical Decision Law: Early on we began providing Cal. Medical Association “Durable Power of Attorney for Health Care” forms as part of our package. (Giving you the ability to appoint someone to make health care decisions for you if you were unable.) The early forms (prior to around 1993) expired after only 7 years -- and the forms before August of 2000 fail to reflect the latest laws. That’s because the California legislature enacted a major overhaul of this law effective as of August 2000. Though the new law did not invalidate earlier forms the new forms add significant force and clarification provided by the new laws. Therefore, any form prior to August 2000 fails to encompass important new safeguards and powers embodied by the new law. Also, see Medical Directives.
7. Property Values & Overall Net Worth: Few would have predicted quite this high a level of present day property values -- and even fewer based their planning strategies around this wild occurrence. Whatever the reason – many of you have seen your net worth climb to unanticipated levels. Point is, you should take a fresh look at your trust strategy based on present values and tax laws.
8. Unrecorded, New or Refinanced Property Not Titled In Trust: For varying reasons we often find real property that is not titled in the trust – and such is likely to cause huge problems. This includes newly purchased properties, refinanced properties removed from the trust (often occurring in escrow without the client really understanding such has happened), adding others to title (usually a poor idea and for the wrong reasons), or reverting to joint tenancy. Such actions either guarantee a trip through probate or, in the case of joint tenancy, usually a result in the long-term loss of a huge tax advantage. Also, many of you have silent (unrecorded) deeds (which many of you requested). While silent deeds are perfectly legal and acceptable we find many clients ultimately become confused or uncomfortable with unrecorded deeds (thinking that the property is not in the trust when in fact it is). Refinances after the date of a “silent” trust deed can also cause problems. Reviewing matters allows us to either clarify and correct such matters or facilitate recording of the deeds to make you more comfortable. Additionally, see our New & Refinanced Property Packet.
9. Other Assets Not Titled in Trust: During your trust process we emphasized the vital importance of and your responsibility of making sure that all of your assets (except Qualified Retirement Plans) were properly titled in the name of your trust (present and future assets). This was stressed to you both orally and in written instructions. Despite heavy emphasis on this subject we are still finding instances where clients fail to follow through on this instruction. Be aware that owning real estate outside the trust is not the only thing that can trigger probate. Enough other kinds of assets outside the trust will trigger probate all by itself too. Even below such probate triggering levels, the paperwork and process necessary to gain control of such assets is still considerably more work than if the assets were properly titled in the trust. To learn more, please see Titling Assets in Your Trust.
10. Prior Planning and Inheritance Provisions That No Longer Apply to Your Circumstances: Children mature and get older, good kids become bad, bad kids become good, nominated successor trustees die or move away, children, trustees, or beneficiaries develop problems or disabilities, names change – on and on the list goes. Point being, things change that make previous planning or strategies inapplicable or inappropriate. A particularly glaring example and problem area is specific gifts (i.e “the Main Street house to John” or “the Bank of America account to Mary”). The trouble with specific gifts is that the asset is no longer owned at the time the person finally passes away. (i.e the house that John was supposed to get was sold years before and the bank account for Mary was dissolved long ago). This can cause enormous complications and bickering. We know that people seldom think to link the sale or shifting of an asset (or their net worth) with what is in their estate plan – which is why we have always discouraged specific gifts. Nonetheless, many clients insist. We know from experience that the gifting strategies in many clients’ estate plans can quickly become outdated and headed for problems because they are out of date.
11. Excluded Heirs: Largely or completely excluding children from inheriting an equal share of your estate invites potential challenges and conflict at death. Though never legally required, we now go to greater lengths to document any intent to exclude family members. While nothing can be done that legally prevents a contest this strategy helps to discourage and forestall them. If you have excluded family members it would be a highly preventative move to come in for a review to further document your intent.
12. Double Check & Quality Control: We are all human beings. There is always a possibility that an oversight, mistake, omission, misinterpretation, or misunderstanding could have occurred in the preparation of your trust and related documents. Reviews serve as a double check and quality control measure.
13. Divorce, Marriage, Death: If you have become divorced or remarried this can vastly affect your estate plan and trust – even invalidate it. Any change in marital status necessitates revisiting and restating your estate plan. If you have not sought estate planning legal advice and guidance since divorce or remarriage it is essential that you do so immediately. Finally, whenever anyone dies it is very important that legal and tax guidance be sought immediately afterwards.