Is the work over once your estate plan is set up?

Readers of this estate planning blog may appreciate the benefit of having a will or trust in place for heirs. However, estate planning is not a one-time event.

Change is a part of life. Just as an individual’s lifestyle and financial circumstances continue to evolve, so too must estate documents be updated. Although a will or revocable trust may identify beneficiaries for specific assets, property that is not specifically titled in the trust or identified in the will may have to go through probate.

Savvy readers may know that a pour-over will is a potential solution to the problem of change. This type of will is simple, perhaps indicating only that all remaining property should be transferred to a trust upon the grantor’s death.

Can someone with a revocable trust and a pour-over will avoid updating his or her estate plan? An attorney would point out several advantages to continually updating these documents. First, even a pour-over will must go through probate. Thus, before any assets can be retitled in the name of the trust, a court in a public forum must examine them.

To protect the privacy of an estate that has a revocable trust and a pour-over will, a grantor might continually revisit a trust, transferring additional assets into it. The beauty of a revocable trust is that both the terms of the trust and its property can be revised at any time, without limitation. An attorney that focuses on estate planning can advise an individual about recommended time intervals or life events that might necessitate updating estate-planning documents.

Source: CNBC, “Trust bust: Steer clear of the 8 biggest estate-planning mistakes,” Barry Glassman, Oct. 22, 2014