It has been several years since you signed and funded your Living Trust to avoid probate.  All seems ok but is it really?

#1 Have you funded your trust properly?

If you do not re-title or assign your assets to the Trust, then you have not funded your Trust.  If there is no funding asset, then that beautiful trust instrument does nothing for you.  In fact, your Pour-Over Will may be rendered invalid.  This means that you should review your list of assets and make sure you have taken steps to transfer the ownership to your Trust.  One asset in your name alone with no beneficiary may cause Probate which you were trying to avoid.

#2 Who are the beneficiaries of your retirement plans and other investments?

If your trust to control who receives your assets upon your demise, then it is very important that you review all assets that have a beneficiary designation.

Often clients spend hours with their attorneys crafting an estate plan to match their goals and them circumvent it through naming individuals as beneficiaries of retirement plans and investment accounts. Make sure these are all coordinated.

#3 Does your trust have provisions providing for maximum tax deferral if it is named the beneficiary of a retirement plan? While you may choose to have your retirement plans go directly to your heirs — and often this is the simplest approach — if they are going to your trust, there are significant tax consequences.  It is important that if you name your Trust that the IRA or 401K distributions can be stretched out over the lifetime of the beneficiary. The IRS has some special requirements in order to qualify for the stretch pay-out.

#4 Is your trust up-to-date for estate tax purposes? Congress and many states have changed the estate tax laws several times in recent years. If your trust is more than five years old, or if you lived in a different state when it was drafted, it should be reviewed by an estate planning attorney to make certain it is still current. No one wants to pay taxes unnecessarily.

I also suggest that your Trust and over-all Estate Plan should be reviewed annually. Personal Circumstances Change, Laws Change.  The Settlor and Trustee of your Trust should meet with an experienced estate planner to make sure your Trust is doing what you want it to.