Amending a Living Trust After the 2010 Estate Tax Law

By now, you probably know about the 2010 estate tax law. But if you have a living trust, you really need to know if you have to do anything with your trust and powers of attorney.

Basic Exclusion Amount

There have been significant changes under the new law that includes some new words (and acronyms) that weren’t in existence ten years ago. For example the exclusion amount was called the “applicable exclusion amount.” Now we have a “basic exclusion amount” and a “portable amount.” These new words are not in the older trusts.

Portability Feature

So, the question is – will you need to amend your trust in any way to reflect any of these changes? Because of the new estate planning provisions of the Tax Relief Act of 2010, it’s a good idea to have your trust reviewed to make sure it’s compatible with the new rates, exclusion amounts and portability feature.

Formula clauses and bequests that were drafted under prior law, particularly if they benefit children or grandchildren, may need to be revised to ensure that they are in line with your intentions.

Powers of Attorney

Your power of attorney for assets and your power of attorney for health care may need updated as well. This is something you can discuss with your estate planner.

There’s been a lot of talk about the new estate tax law since mid December. If you’re like most people, you need to know if there’s anything you have to do. The first step is to contact your estate planner or the person who drafted your trust and ask them if you have to revise or amend your trust to address all of these changes.

Ask them what changes (revisions, etc.), if any, you should make to your trust so that it will conform to the new estate tax law.