Five Common Trust Mistakes to Avoid
Trusts are an essential tool in estate planning, as well as a fantastic way to ensure that you are protecting your assets from probate while still honoring your needs and wishes. There are several types of trusts and many reasons why you would use one to protect your assets and ensure they go to the right entity. Irrevocable trusts and living trusts all serve a specific purpose, depending on your needs. No matter which type of trust you decide on, however, there are some common mistakes to avoid.
There are some items that all trusts have in common. For example, you have to name a trustee when establishing a trust. The trustee will oversee the trust. With a testamentary trust, the trustee is the one that ensures the trust is followed upon your death, and it cannot be changed. In a living or inter vivos trust, you can manage assets and make changes up until the time of your death. Which type of trust is right for you depends on your circumstances and your goals when creating the trust.
If you have decided to set-up a trust, there are certain procedures and steps that must be followed in order for it to be instituted properly.
Funding
It is important to fund the trust. Failure to do this means there won’t be any assets or money left for your beneficiaries. You cannot set up a trust if there are no assets to put into it. One way to remedy this issue is to set up deposits into the trust.
Instructions
If you decide to set-up a trust, it needs to have clear instructions regarding how it will function, to whom funds should go, how payment should be made, and when. Clear instructions will ensure your trust is handled properly.
Beneficiaries
The purpose of a trust is to pass on money or assets to a beneficiary. If you don’t name beneficiaries in the trust, it will sit in limbo, inaccessible to anyone with an interest in the trust. It is important to make sure beneficiaries are named.
Trustee
Choosing a trustee that you believe will follow through on your wishes and instructions set-forth in the trust is important. Choosing the wrong trustee can be ruinous to your trust. It can create damage in formerly loving relationships and can lead to abuse of the trust.
Maintenance
Simply establishing a trust does not mean the process is over. You will need to review the trust, make periodic adjustments, and ensure it’s working the way you would like it to when the time comes. An additional issue can crop up if you are not updating the trust, as well. If you have changed who you would like the assets to go to in a living trust, that won’t actually happen unless you update the documents in the trust regarding beneficiaries. Ask The Mattar Firm about their annual maintenance program.
Estate Planning Lawyers
If you are considering a trust and are starting to look at options, an experienced attorney can help you make the right decisions for your situation. There are a number of options available, but making sure your trust is doing what you’d like it to is important. Taking the time to set a trust up properly will help you avoid any issues. Knowledgeable estate planning lawyers can ensure your trust is executed properly. Contact The Mattar Firm for your consultation. 239-222-2222.