Older Living Trusts Need to be Reviewed and Possibly Revised

Older living trusts may need to be reviewed for changes in the tax laws, as well as to update them for changes in your and your family’s health and financial situation.

If you have a living trust prepared many years ago, this probably applies to you. Many couples created revocable living trusts under the old estate tax rules. Many of those older trusts were designed to save estate taxes, by creating two separate trusts when the first spouse died. This was done to increase the amount that ultimately could pass to the children without estate taxes.

With changes in the estate tax law, very few people need to worry about paying estate taxes. (Because few people have an estate exceeding the current estate tax exemption of over $5,000,000 per person.) But these older trusts still have mandatory trusts that reflect the old laws and can create problems for the family. For example, many of these trusts require that all assets up to the estate tax exemption are to continue in a restricted trust for the surviving spouse. That means if your estate is under $5,000,000 (as most people’s estates are), everything goes into trust and nothing passes outright to the surviving spouse.

These days and for most people, estate taxes should not drive their estate planning and living trust. Now there is a bigger concern over the costs of nursing home care and other long-term care. Many of these older trusts could impede the family’s ability to access medical assistance and government benefits if needed. In addition, there may be reasons to simplify the overall planning now that the estate tax rules are no longer applicable.

For families with a Greensboro living trust, it would be important to meet with a local Greensboro elder law firm to review the terms of the trust and consider what revisions should be made. Particularly critical would be to review trusts created by non-attorneys or by so called trust mills (organizations marketing living trusts at discounted prices where you received a standard form document that may not reflect your situation). If you have a living trust but you’re not sure what it does or you never even met with a Greensboro estate planning attorney when you first signed it, you definitely need to have your trust reviewed.