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The Necessity Of A Living Trust Review

By Jack E. Stephens, Esq. (4/17/2012)

Life changes. Times change. People change. Law changes. Because of these realistic facts, our documents must be updated. The child initially appointed as the Successor Trustee and Executor of the estate may now be unavailable for health reasons, family problems, financial issues, etc. It may be necessary to change the order of Successor Trustees.

The children in which you designated equal shares in your estate or Trust may now have varying needs. One child may have significant wealth while another struggles financially because of health or marital issues. It may be time to change that equal distribution. Or one child has remained loyal to your care and has provided time and services beyond the call of duty while other children have become more distant.

Also, laws change that dictate the updating of Trusts. The following is a list of legislative changes or creative updates to the Trust:

  • New Heggstad Provisions: Safety net to avoid Probate if assets are left out of Trust.
  • New DEFRA Provisions: Protects against impoverishment due to catastrophic long-term illness and nursing home cost.
  • New Protective Inheritance Trust (PIT) Provisions: Protects your children's inheritance through the Trust from creditors, divorce and lawsuits.
  • New No-Contest Law: Protects the Trust from contests by heirs and 3rd parties (son-in-law, daughter-in-law).
  • New IRA Law to qualify the Living Trust as an IRA designated beneficiary for extended distributions to heirs which can save taxes.
  • Trust Agreements between spouses to transfer assets to a non-ill spouse to avoid spenddown of the estate for an ill spouse entering a nursing facility.

These and other provisions should be implemented into your Trust to allow for asset protection, tax reduction and prudent administration of your Trust Estate.

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12526 High Bluff Dr.
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San Diego, CA 92130
Phone: 858-792-0909
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