A trust can be a powerful estate planning tool, as it allows for the transference of assets to beneficiaries under specific terms. While a trust provides numerous benefits, it can fail to offer the intended advantages if any of the common mistakes listed below are committed.
Failing to Fund the Trust
Once a set of trust documents has been created, funding is essential for ensuring the trust has assets to control and manage. Without proper funding, the trust is useless and the intended assets will likely be forced through probate.
Failing to Provide Directions for the Trust
It is insufficient for a trust to only contain assets. It must also list directions for the disposition of those assets. Simply put, the grantor of the trust should offer directions for when and how the assets are to be distributed or invested. Without these important details, the trust’s conferred legal obligations may be questioned.
Not Listing Beneficiaries
Assets are held in trust to be distributed to listed beneficiaries at a later time. However, if no beneficiary is chosen, the validity of the trust can be questioned or nullified. An Estate Planning Attorney can help a client choose the right beneficiaries.
Choosing the Wrong Trustee
The person overseeing the trust should be responsible, organized, and trustworthy. Selecting the wrong trustee can result in severe mismanagement. While this may create problems for beneficiaries, and it may compromise assets, it can also lead to the trustee being sued for breaching their fiduciary duty.
Not Updating the Trust With Changes in Circumstances
This is sometimes known as “set and forget” and is quite common. Failing to modify a trust as situations can change may lead to one or more of the above issues, which can mean the trust does not offer the benefits and protections intended by the grantor.
Call a Local Attorney for Help in Creating a Solid Trust
While trusts can convey numerous advantages to beneficiaries and grantors, they only work if they are properly crafted. Those needing help developing trusts and resolving other estate planning matters should consult Estate Planning Attorney Mark Aberasturi or visit his Facebook page to learn more about the estate planning process.Add to favorites