{"id":13080,"date":"2025-03-16T06:00:00","date_gmt":"2025-03-16T11:00:00","guid":{"rendered":"https:\/\/legaltalktexas.hammerle.com\/?p=13080"},"modified":"2025-06-18T11:59:21","modified_gmt":"2025-06-18T16:59:21","slug":"review-will-and-trust","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/wills-trusts\/review-will-and-trust\/","title":{"rendered":"Changes Should Lead To Change: Timely Review of Will and Trust is Critical"},"content":{"rendered":"

It seemed like such a good idea at the time.<\/span><\/p>\n

Your mom goes to an attorney and, after thoroughly analyzing her financial wealth, goals, and family members, signs her <\/span>will, trust, and funding documents<\/span><\/a>. Satisfied that all is in order, she takes the papers home and carefully places them on a shelf. That is where they sit, undisturbed, for the next 20 years.\u00a0\u00a0<\/span><\/p>\n

What happened during those 20 years? One son became a drug addict. Another son became disabled and qualified for needs-based government benefits. A daughter died, leaving behind two young children. The tax laws changed. Your mom\u2019s brother was diagnosed with dementia.<\/span><\/p>\n

The only things that did not change were your mom\u2019s will and trust.\u00a0<\/span><\/p>\n

Then your mom dies. You go to her house, blow the dust from the documents, and read in stunned horror.<\/span><\/p>\n

The Consequences of Not Updating a Will<\/span><\/h2>\n

In her will, she left $400,000 outright – $100,000 each to you: the drug-addicted son, the son on government benefits, and her deceased daughter.\u00a0 She also named you her <\/span>independent executor<\/span><\/a>.<\/span><\/p>\n

If the drug-addicted son receives his $100,000, he will spend it on drugs. If the disabled son receives his $100,000, he will be disqualified from government benefits. The daughter\u2019s children are minors and cannot receive their share of the $100,000 directly.<\/span><\/p>\n

Your mom\u2019s will provided that the \u201crest and residue\u201d of her estate is payable to her trust. Unfortunately, there are <\/span>problems with the trust<\/span><\/a>.<\/span><\/p>\n

Unforeseen Issues With a Trust<\/span><\/h3>\n

Your mom\u2019s trust has a funding formula that made sense under the tax laws in effect 20 years ago but will have adverse tax consequences under the current law.\u00a0 If you fund the trust as it is written, it will be unnecessarily costly.<\/span><\/p>\n

The trust contemplates setting up separate sub-trusts for you and your siblings. You have been named as the trustee, and your mom\u2019s brother as your successor trustee if you cannot or will not serve.<\/span><\/p>\n

But you do not want to serve as your drug-addicted brother\u2019s trustee. Even if you can find him, you will be in an untenable position when he begs you for money. The successor is your mom\u2019s brother, who has dementia and cannot serve. That leaves your brother\u2019s trust without a trustee.<\/span><\/p>\n

Further, the sub-trust for your disabled brother was not drafted as a <\/span>special needs trust<\/span><\/a>. His sub-trust, as written, will disqualify him from government benefits as surely as the specific bequest of $100,000 will.\u00a0<\/span><\/p>\n

In short, the change in circumstances made your mom\u2019s 20-year-old plan a disaster.<\/span><\/p>\n

Options to Modify a Will<\/span><\/h2>\n

What can you do not to minimize the damage? You could have several viable options. These need to be viewed through the prism of your fiduciary duties and possible tax ramifications.<\/span><\/p>\n