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Do You Have a Broken Trust?
If it was, could you even tell? Unfortunately, trusts don’t have “check engine” lights that will warn you if something is wrong. Your trust may have a dead battery, broken door locks, and missing seatbelts – and you wouldn’t even know! Your old broken trust needs to reflect all the changes in your life to protect your family and your legacy. Any plan that fails to achieve these goals and doesn’t match your current financial and family circumstances is out of date and is in need of an overhaul. We can help you revitalize the obsolete aspects of your plan and get you back on track for the future.
How to Know if You Have an Outdated Trust
If you or anyone you know executed an estate plan prior to January 1, 2020, an immediate review should be on your to-do list. There have been a number of important changes in the law since 2019, and your documents may not work as well as they could. Most recently, Illinois completely overhauled its trust statutes, which are effective January 1, 2020. Also in late December, 2019, President Trump signed the SECURE Act into law, which effects all retirement accounts in the United States. Both laws have major consequences to all estate plans.
Additionally, you may also be the beneficiary of a deceased loved one’s will or trust. These older trusts left by a parent or grandparent can often benefit from a “remodel” or modernization.
Quality Estate Planning is an Ongoing Process
Like financial planning, tax planning, health and fitness, and so many other aspects of life, proper estate planning is an ongoing process that you must revisit regularly. We make it our business to keep up with the latest developments in legislation and know how to make changes to your plans to avoid risks and seize opportunities. But, we need your help and your engagement in the process to help you avoid the negative consequences of outdated or obsolete planning.
You are Not Trapped by Old Plans, Even When They’re “Irrevocable”
Now that you are aware of an outdated trust posing a potential risk to your family’s long-term well-being, we can work with you to restate or amend your revocable trust or will. This is a straightforward solution that can update and modernize your trusts and make them ready for the current realities of the legal and financial landscape we live in today.
Many of you probably have an irrevocable trust of some kind as well, an inheritance from a parent or grandparent or even one you made yourself. There are more boundaries and modernization is a more involved process for an irrevocable trust, but we have an array of tools (decanting, trust protector restatement, judicial modification, or non-judicial settlement) at our disposal to “remodel” or modernize an existing irrevocable trust. You may have heard about decanting. It is an increasingly popular option and borrows its name from the decanting process used for wine. Just as you can decant wine by pouring it from its original bottle into a new bottle, leaving the unwanted sediment in the original bottle, you can pour the assets from one trust into a new trust, leaving the unwanted terms in the original trust.
Just as there are many ways to remodel a home, there are many strategies and legal tools that can be used to modernize old estate plans. Since each plan is unique, the way to update it will be as well. Coming up with the most effective strategy requires careful consideration of your current goals and needs, as well as your tolerance for risk.
Even though there is no way to know for sure what to do until some analysis is complete, it’s better to have an informed choice rather than acting upon the assumption that your plan will work as intended, especially if it hasn’t been professionally reviewed. These are complex legal processes, and there is no one-size-fits-all answer.
We want you to have the best possible plan for your family. Since you and your circumstances are unique, give us a call today and let’s explore the options. We look forward to hearing from you. Give us a call at (847) 367-4460, or get started by downloading our Legacy Planning Guide.