As part of the estate planning process, your attorney likely asked you to outline your goals. Based on your responses, he crafted an estate plan tailored to your unique needs and wishes. As time goes on, however, you may find that the goals you initially outlined are no longer in line with your current priorities. Fortunately, a simple modification of your trust can help bring your estate plan up to date and meet your trust goals.
Modify Your Trust to Accomplish These Five Trust Goals
Are you wondering what types of trust goals might change, making a trust modification a good idea? Following are five of the more common:
- Modify your trust to encourage or support a child who chooses to further his education. This can be further broken down to provide additional trust funds for certain types of schooling. For example, a parent who wants t to encourage his child to achieve a master’s degree might carve out additional distributions of trust assets in order to accommodate that goal.
- Modify your trust in order to help a child purchase his first home. For some parents, it is important to make it easier for their child to get a start in real estate. According to DataQuick Information Systems, the median price of an Orange County home hit $580,000 in March 2014—a price that is not easy for many young people to afford. A simple amendment to your trust can direct the trustee to set aside certain funds to give your children the assistance they need in order to purchase a house.
- Modify your trust in order to fulfill a personal goal based on charitable giving. Perhaps you were not as willing to leave your assets to charity when you first created your estate plan because you had a lower net worth or were raising young children. As life changes, charitable giving may become more achievable. Your trust can be updated to carve out specific distributions to charities.
- If your goal is to transfer as much of your hard-earned assets as possible to your beneficiaries, consider modifying your trust to incorporate more sophisticated tax-savings techniques. When you created your trust, you may have been less concerned with tax savings because your estate was smaller or because you were hoping to craft a very simple estate plan. As time changes your priorities, a modification to your trust is relatively simple.
- Modify your trust when your goals shift from ensuring that your children are taken care of financially to providing for a younger generation. At the time you drafted your trust, your children may have been much less financially secure. Today, they may be well off, and your goals now may have changed so that you want to leave the bulk of your assets to your grandchildren instead.
Knowing when to modify your estate plan is an important aspect of keeping your trust up to date. If you have a thought in your mind that perhaps you are ready for a modification, we encourage you to reach out to us.