When to Change Your Living Trust

When to Change Your Living Trust? if you’re satisfied with your choice of trustee and who you have designated to be your successor beneficiaries for your assets, you don’t have to change anything.

By Ilyce Glink and Samuel J. Tamkin

Do I need to change the name of my living trust?

Q: Do I need to change the name of my living trust? I was single and now I’m married. My home is in the trust. My trust administrator said that I didn’t have to make any changes. Other than getting married, nothing has changed. What do you think?

A: Only you can truly answer this question. When you created your trust, you made certain decisions about the ownership of your real estate assets, bank accounts and investments and who would benefit if something happened to you. Once you set up the trust, you then transferred all of these assets into the trust. Thus, your real estate investments and bank and investment accounts should now be in the name of your trust, not in your name personally.

Once you set up the trust and transferred the assets into the name of your trust. Your trust document dictates who can manage those assets and what happens to them if you should die or become incapacitated.

Three roles in setting up a trust

Most people take on three roles when they set up a trust: the trustor (the person that created the trust), the beneficiary (the person that benefits from the trust), and the trustee (the person that handles the affairs of the trust and who has the power to buy, sell and own property in the trust).

You mentioned a trust administrator. Did you mean the person that helped you create the trust? Or are you referring to someone who administers trust affairs as the trustee instead of you. We’ll assume it’s the former.

Main purpose of a trust

One of the main purposes of a trust is to allow an individual’s estate to avoid probate. If your assets aren’t in a living trust (or another type of trust), when you die. Your survivors will have to go to probate court. There, the court will assign someone to act as the executor of the will, if there is a will. The whole process of probate is generally thought of as cumbersome and expensive.

A living trust allows the estate of the deceased to avoid probate. The trust document designates who is the successor trustee and designates successor beneficiaries. In other words, if you die, your trust should provide for someone to handle the affairs of the trust. The document should also designate who gets which assets that are held in the trust.

Life changes are a good time to review trust

So, going back to your question, if you’re satisfied with your choice of trustee (presumably you are the trustee) and you are satisfied with who you have designated to be your successor beneficiaries for your assets, you don’t have to change anything. The trust’s name doesn’t have to mirror yours, but life milestones (like a marriage, divorce, birth or death of a child or a named successor beneficiary) are a good time to examine whether you need to make changes to your trust.

You’re newly married, but that doesn’t mean you have to automatically change your trust to include your new husband. We don’t know how long you’ve known your husband or whether you set up your trust with the intent to keep your assets separate from your husband’s assets. At some point, if you want to have your husband be the successor trustee for your trust and include him as a beneficiary for some of your assets, you can make changes to your trust.

What is the purpose of your living trust?

Before you do that, here’s something to think through: what is the purpose of your living trust? Does it hold family assets that should remain separate from your marital assets? Does it hold assets you accumulated before your marriage that you want to go to a specific beneficiary, say children from a prior marriage or a disabled sibling?

Know that if you place your new husband as the executor of your trust and you were to name him as the beneficiary of your assets, your kids or whomever you had placed as receiving assets from you down the line would no longer get those assets. And, if you wanted your children to control your assets after your death, and you name your husband a successor trustee, he would control your assets and not your kids.

Consult with the attorney or estate planner

With that in mind, consult with the attorney or estate planner that helped you draw up the trust. Talk through these issues and make sure you understand what your plan is for your estate. If the plan works, keeping in mind future life events, then you likely don’t need to make any changes to your trust documents. And, to be clear, it doesn’t matter what is the name on the trust as long as it’s clear that it belongs to you.