A concept that I try to instill in my clients is that a trust is not a “set it up once and be done with it” kind of a purchase. Occasionally, a prospective client will come in with a trust from 1984 and they will ask if it is still valid. The answer is typically, “Yes,” but just because it is valid doesn’t always mean that it is current with your wishes and up to date with changes in the law.
The easiest way I can think to explain how and why a trust should be considered a fluid or changing document is to compare it to something most of us are familiar with, and that is the operating system of the computer or tablet you are using to read this blog post. I can assure you that no one out there right now is using one of those original Macintosh SE green-screen behemoth computers to look at this web page. Why can I be so sure? Because I know that the operating system that allowed that prehistoric Macintosh computer to run is not up to date with all the internet requirements that allow you to see this blog today. Does that mean that someone with that Macintosh computer does not have a valid computer? No; not at all. In fact, I grew up playing games on one of those dinosaur machines and it provided countless hours of fun. But would it be able to accomplish all that we’ve become accustomed to doing on our computers these days? Of course not!
Similarly, a trust from 1984 may function and work to keep your assets out of probate – as long as your assets are still funded in the trust. If that is all you’re hoping to accomplish, then more power to you – you made a great investment back in the day. But, if you are hoping to have a document that is up to date with your family member changes, with Medicaid spend-down provisions, with protected trusts for your beneficiaries, and with all the State and Federal law changes that happen almost every year, then you have to update your trust on a regular basis. Also, most people have bought and sold property, accumulated possessions, and have created new bank, savings and retirement accounts since then – these are not automatically put into your trust and could cause you to go through probate. A trust needs to be regularly reviewed and updated as needed, just like your computer’s operating system.
One of the main reasons I hear as to why a client chose not to update their trust is the cost involved. Trust me, I get that. I understand what you mean. But there are some things in life that simply have to be maintained in order to get the most utility out of them – computers, cars, homes, etc. A trust is just one of those things. I hate having to pay for upkeep on my car, but I know that if I want that car to keep running mile after mile, year after year, I have to spend the time and money to keep it maintained.
I would encourage you to consider your trust in the same category as a car or an operating system. If you believe that your trust is comparable to the green-screen-machine, then please come in today for a review. I can assure you, you will be glad you did.
For more information or to schedule your free consultation, contact us today at 888.222.1328.
About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
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