Old School vs. New School Trusts: Why a “Good” Estate Plan May Still Need an Update

One of the common questions I get from prospective clients is: “We already have a trust, is it good enough?”

My follow-up question is almost always: “When was it created?”

The answer might be:

“Around 2000.”

“Maybe 1998?”

“The kids were still little.”

And here is the important thing to understand:

An older trust is not necessarily a bad trust.

In fact, many of the trusts I review from the late 1990s and early 2000s were thoughtfully drafted by excellent attorneys.

These were often sophisticated plans that addressed exactly the concerns families faced at the time.

The issue is not whether the trust was good.

The issue is whether the trust still fits your life.

Estate planning has changed dramatically over the last twenty to twenty-five years. Laws have changed. Taxes have changed. Retirement account rules have changed. Families have changed. Most importantly, people’s priorities have changed.

I sometimes tell clients: “The best estate plans age poorly.”

That sounds counterintuitive, but it is true. A trust created twenty years ago was designed for a completely different world than the one we live in today.

As a practical rule of thumb, if a trust is more than ten to fifteen years old, I generally recommend a careful review. Once a plan reaches the twenty-year mark, it often becomes a strong candidate for a full restatement. That does not necessarily mean starting over from scratch. In many cases, we are preserving a good plan while modernizing it to reflect current law and current family circumstances.

So what exactly changed?

Estate Tax Used to Drive Everything

Twenty years ago, estate planning was largely driven by one concern:

How do we avoid estate tax?

Back in the late 1990s and early 2000s, federal estate tax exemptions were dramatically lower than they are today, and portability between spouses did not exist. Estate tax exposure affected far more families than it does now. Because of this, lawyers commonly designed trusts to automatically split into separate subtrusts at the death of the first spouse, typically a Survivor’s Trust and a Family Trust or Bypass Trust.

This was not bad planning. In many cases, it was exactly the right planning.

Today, however, the conversation is different.

Rather than asking: “How do we force tax planning?” we more often ask: “How do we preserve flexibility?”

For many families, modern planning emphasizes optionality. Instead of automatically creating a bypass trust, many newer plans incorporate Disclaimer Trust planning, which allows the surviving spouse and advisors to evaluate the circumstances after the first death and decide whether additional tax planning actually makes sense.

In other words, older plans often emphasized certainty. Modern plans tend to emphasize flexibility.

Retirement Accounts Changed Everything

One of the biggest changes in estate planning over the last twenty years has been the increasing importance of retirement accounts.

In many families today: The retirement account is the estate.

Twenty years ago, inherited IRA planning was relatively straightforward. Beneficiaries could often stretch distributions over their lifetime, and retirement assets were not always central to the estate planning discussion.

Then came the SECURE Act.

Today, retirement planning sits at the center of many estate plans. Questions that barely existed twenty years ago now matter enormously. Should retirement assets go outright to children or remain protected inside trusts? Should inherited retirement assets be distributed immediately or accumulated for future protection? Should Roth conversions happen during retirement years to reduce future taxes for children?

A beautifully drafted trust can fail to accomplish its goals if retirement account beneficiary designations are not coordinated properly. Estate planning is no longer just about the trust document itself, it is about how the trust, investments, taxes, and retirement accounts all work together.

Basis Step-Up Matters More Than It Used To

Older planning often focused heavily on minimizing estate tax. Today, many planners spend just as much time thinking about capital gains tax and something called basis step-up.

Imagine parents purchased stock decades ago for $100,000, and today it is worth $2 million.

The question is no longer simply: “How do we reduce estate tax?”

The modern question may instead be: “How do we preserve favorable tax treatment for children later?”

In many cases, families benefit when highly appreciated assets remain in a surviving spouse’s estate long enough to receive another basis adjustment at the second death. As a result, modern estate planning often involves balancing estate tax concerns with capital gains planning.

For many middle- and upper-middle-income families, this issue now matters more than estate tax.

Adult Children Are No Longer Assumed to Receive Assets Outright

Older trusts often assumed that once children became adults, inheritances should simply be distributed outright.

That approach still works well for some families.

But many families today prefer a different model, not because they distrust their children, but because life has become more complicated.

Modern trust planning increasingly focuses on protecting children from outside risks such as lawsuits, divorces, creditor issues, financial stress, or simply poor timing. Continuing trusts can still provide broad access and flexibility for children while also protecting inherited assets over time.

I often tell clients: The goal is not control. The goal is protection.

Or, as I sometimes phrase it: We are trying to protect your children from life, not from themselves.

Incapacity Planning Became More Important

Interestingly, many clients today fear incapacity more than death.

Twenty years ago, powers of attorney and healthcare directives were often relatively straightforward documents signed and placed in a drawer.

Today, clients are far more focused on practical concerns involving aging, dementia, caregiving, healthcare access, and long-term decision-making.

Modern planning often includes stronger incapacity provisions, healthcare directives, HIPAA authorizations, digital asset access, and more practical authority for loved ones to step in if needed.

For many families, these documents end up becoming more important than the trust itself.

So, When Should You Update Your Plan?

There are obvious times when an estate plan deserves a second look. Major family changes such as marriage, divorce, births, deaths, estrangement, or blended family situations often justify revisiting a plan. Significant health changes, a serious diagnosis, retirement, receiving an inheritance, selling a business, moving to another state, or major legal changes (such as the SECURE Act) can also create reasons for review.

Even without a major life event, I generally recommend revisiting an estate plan every three to five years.

Because the better question is not: “Do I have a trust?”

The better question is: “Does my trust still fit my life?”

A trust that was perfectly designed twenty years ago may no longer reflect your assets, your family, retirement laws, tax laws, or your current priorities.

The good news is that you often do not need to start over.

Sometimes, what you need is simply a thoughtful modernization.