Lee Carpenter

Most people understand that bringing home a family dog is only the beginning of the responsibility. A dog needs to be fed, exercised, groomed, and taken to the veterinarian for regular checkups. Without ongoing care, even the healthiest pet can develop problems over time.

A revocable trust is much the same.

Many people believe that once they sign their trust documents, their estate plan is complete. In reality, creating the trust is just the first step. To function as intended, a trust requires ongoing attention and maintenance. Think of it as practicing good “trust hygiene.”

Trust hygiene helps ensure that your trust remains properly funded, reflects your current wishes, and stands ready to accomplish its goals when needed. Without regular maintenance, even a carefully drafted trust may fail to deliver the benefits it was designed to provide.

Feed the Trust: Proper Funding Is Essential

A dog cannot thrive without food, and a trust cannot function effectively without assets.

One of the most common estate-planning mistakes is failing to fund a revocable trust after it has been created. Funding simply means transferring assets into the trust or coordinating beneficiary designations so the assets ultimately flow into the trust.

Depending on the asset, funding may involve different tasks:

• Transferring real estate into the trust through a new deed
• Retitling bank or brokerage accounts in the name of the trust
• Assigning ownership interests in closely held businesses
• Naming the trust as a beneficiary of certain assets when appropriate
• Moving your furniture, artwork, jewelry, and other personal property to the trust through an “assignment”

Many people are surprised to learn that signing a trust agreement does not automatically transfer ownership of their assets. If assets remain titled in an individual’s name, they may still be subject to probate despite the existence of a trust.

A trust that has not been properly funded is like a dog that has not been fed — it cannot thrive and perform the functions for which it was intended.

Schedule Regular Checkups

Good trust hygiene includes periodic reviews.

Families’ financial lives rarely remain static. People buy homes, sell investment properties, open new accounts, start businesses, inherit assets, and make other significant financial changes throughout their lives.

Each of these events creates an opportunity for assets to fall outside the trust.

For example, a couple may have properly funded their trust when it was established but later purchased a vacation home and never transferred it into the trust. Years later, that single oversight could create an expensive and unnecessary probate proceeding.

Periodic trust reviews help identify these issues before they become problems. As a general rule, it is wise to review your estate plan every few years and after major life or financial events.

Keep Trustee Appointments Current

Another important aspect of trust hygiene is reviewing the individuals named to serve as trustee and successor trustee.

When a trust is first established, the successor trustee you have named may be the obvious choice. But circumstances can change significantly over time.

A successor trustee may relocate, develop health issues, become unwilling to serve, or simply no longer be the best fit for the role. Family dynamics can also evolve in unexpected ways.

Regular reviews provide an opportunity to confirm that the people named in the trust remain capable and appropriate choices. Updating trustee appointments when necessary can help avoid administrative difficulties later on.

Review Beneficiaries and Distribution Plans

Just as families change, estate plans should evolve as well.

Children grow up. Grandchildren are born. Marriages begin and end. Beneficiaries develop different financial needs and levels of maturity. What seemed like the perfect distribution plan 10 years ago may no longer reflect your current objectives.

A trust review provides an opportunity to revisit beneficiary provisions and determine whether they still accomplish your goals.

In some cases, adjustments may be appropriate to account for changing family circumstances, special-needs concerns, creditor-protection issues, or evolving tax considerations.

Good trust hygiene means ensuring that your trust continues to reflect your family’s present reality rather than a snapshot of life from many years ago.

Don’t Forget New Assets

One of the easiest trust hygiene mistakes is forgetting to update ownership when acquiring new assets.

People often focus on funding the assets they own when the trust is created but overlook assets acquired later. A new home, investment account, business interest, or valuable piece of property may never be coordinated with the trust.

Over time, these omissions can undermine the effectiveness of an otherwise well-designed estate plan.

Whenever you acquire a significant new asset, it is worth asking a simple question: “How does this fit into my trust plan?” That one question can help prevent many common estate administration problems.

Healthy Trusts Require Ongoing Attention

A revocable trust is not a “set it and forget it” estate-planning tool.

Like any important part of your financial life, it benefits from regular maintenance. Proper funding, periodic reviews, updated trustee appointments, current beneficiary provisions, and attention to newly acquired assets all contribute to good trust hygiene.

The goal is simple: When the trust is needed, it should work exactly as intended.

Schedule a Trust Hygiene Review

If it has been several years since your trust was reviewed, or if you have purchased property, opened new accounts, experienced a major life event, or are simply not sure whether your trust is fully funded, now may be the perfect time for a trust hygiene review.