How Often Should I Review And Update A Trust Fund?

Trust funds are legal arrangements that allow a person to store assets in an account intended to benefit someone else. For example, a parent can create a revocable trust (also known as a living trust) to place college funds in a special account for their child. In this scenario, the assets in the trust could only be used to pay for the child’s college education in the future. Trusts are helpful for those who need to provide assets but want to ensure the funds are handled responsibly. Once you create a trust, you might wonder if you ever need to update the terms on the legal document. Our knowledgeable law firm has all the answers you might be looking for! Read on to learn more, or speak with a Des Moines Trusts Lawyer for individualized legal counseling.

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HOW OFTEN CAN I UPDATE A TRUST FUND IN IOWA?

There is no legal rule for how often you can review and modify the terms of a trust. However, our law firm recommends reviewing your trust at least every couple of years to ensure that the terms are still accurate. If possible, it’s best to reevaluate the legal document once a year. In many cases, the terms of a trust could depend on life circumstances. For example, a change in taxes could affect a trust and other aspects of your estate plan. There are some significant life changes that would definitely require an adjustment to your estate plan. Any of the following life events could initiate an update to a trust:

Marriage

Divorce

Birth or adoption of a child

Moving to another state

Acquiring new property

WHY IS IT IMPORTANT TO UPDATE YOUR ESTATE PLAN?

Without a valid estate plan, your assets will not be protected if you ever suddenly become incapacitated or unexpectantly pass away. An estate planning document could be deemed invalid if the terms of the arrangement are no longer applicable. For example, the trustor (the person who created the trust) might have included a bank account on the trust, but the trust can become invalid if the trustor switches banks after creating the trust. The trustor would need to update the trust to ensure the beneficiary receives the proper funds.

Are you looking to start an estate plan in Iowa? If the answer is yes, you should speak with a dedicated estate lawyer who can help you determine your best options. Thankfully, our highly experienced legal team is on your side every step of the way! Contact Herting Law today for an initial consultation.