Living trusts are a popular estate planning tool, but they can become outdated over time. If your living trust is 10 years or more old, it is important to consider amending it to ensure that it still meets your needs. However, there are a number of pitfalls that you should be aware of when amending an old living trust.

Pitfalls to avoid when amending an old living trust

Here are some of the most common pitfalls to avoid when amending an old living trust:

• Not understanding the trust document. It is important to have a good understanding of your trust document before you amend it. This includes understanding the terms of the trust, the assets in the trust, and the beneficiaries of the trust. If you do not understand your trust document, you should consult with an estate planning attorney.

• Not understanding the tax implications of an amendment. Amending a trust can have tax implications. It is important to understand how the amendment will affect your income taxes, estate taxes, and gift taxes. You should consult with a tax advisor to determine the tax implications of the amendment.

• Not updating the trust to reflect changes in the law. The laws governing trusts can change over time. It is important to update your trust to reflect any changes in the law. You should consult with an estate planning attorney to ensure that your trust is up-to-date.

• Not updating the trust to reflect changes in your personal circumstances. Your personal circumstances may change over time. For example, you may get married, divorced, or have children. It is important to update your trust to reflect any changes in your personal circumstances. You should consult with an estate planning attorney to ensure that your trust meets your current needs.

• Not having the amendment properly executed. A trust amendment must be properly executed in order to be valid. This means that the amendment must be signed and witnessed by the trustor (the person who created the trust). You should consult with an estate planning attorney to ensure that the amendment is properly executed.

What happens if the amendment is not consistent with the underlying trust?

If the amendment is not compatible with the underlying trust, the amendment may be invalid. This means that the amendment may not be enforceable and the terms of the original trust will prevail.

For example, if you amend your trust to leave a specific asset to a particular beneficiary, but the asset is not actually owned by the trust, the amendment may be invalid. In this case, the beneficiary would not receive the asset.

Another example is if you amend your trust to create a new trust for a minor child, but you do not appoint a trustee for the new trust, the amendment may be invalid. In this case, the minor child would not be able to access the assets in the new trust until they reach the age of majority.

How to avoid pitfalls when amending an old living trust

The best way to avoid pitfalls when amending an old living trust is to work with an estate planning firm like ours so that you can receive professional guidance and not disrupt the trust you have if it is worth keeping. An estate planning attorney can help you to understand your trust document, the tax implications of an amendment, and any changes in the law that may affect your trust. An estate planning attorney can also help you to draft and execute the amendment properly.

If you are considering amending your living trust, it is important to contact an estate planning attorney like our firm that serves families and business owners in Aliso Viejo, Laguna Niguel, Laguna Beach, Newport Beach and all of Orange County to discuss your options.

Conclusion

Living trusts are a valuable estate planning tool, but they can become outdated over time. If your living trust is 10 years or more old, it is important to consider amending it to ensure that it still meets your needs. However, there are a number of pitfalls that you should be aware of when amending an old living trust.

By working with our firm, you can avoid these pitfalls and ensure that your living trust is up-to-date and meets your current needs.