Can Your Clients Really Trust Their Trust?

As the old saying goes, “people with trusts get them because they don’t trust.” If you have clients with a trust, are they sure that the trust terms are designed to distribute their assets the way they want? We always stress the importance of periodic reviews of your clients’ critical documents like beneficiary designation forms, especially whenever they experience a life changing event such as a birth, death, marriage or divorce. But have your clients also reviewed their trust and estate plan lately?

Many clients fail to understand that just because they may have spent a lot of time and money having a trust created, that doesn’t mean that they never need to look back once the ink is dry. They may have had the best law firm in their area draw up a comprehensive trust instrument, but what if their planning strategy and goals have changed? What if new laws have since been enacted?

Recently, an advisor’s client discovered that the trust her husband set up contained provisions that conflicted with their recently modified financial plan and distribution goals. The trust had been drafted several years before and they never reviewed the trust terms despite the fact that not only had many life changing events occurred in their family but their financial strategy and planning goals had also changed. Unfortunately, the client’s husband passed away and she is now stuck with the flawed trust terms, resulting in irreparable and unintended results for their beneficiaries, their children and grandchildren.

Marriage, divorce, birth or death may occur at any given time. Tax law changes go into effect on a routine basis. Even though you cannot predict what will happen and when it will happen, your clients can adjust their estate plan as needed when any life changing event occurs or new legislation affects their tax planning.

Help your clients ensure their assets flow the way they want and in the most tax efficient manner possible. It is important that clients regularly review important documents such as wills, trusts, beneficiary forms, powers of attorney and anything else they may have in place to provide for and protect their loved ones.

Do you know how to conduct document reviews with your clients? Table Bay advisors have exclusive access to our proprietary Discovery Checklist System. Our checklists were designed to help advisors and their clients identify potential problems and preventative steps can be taken before it is too late.