Three Common Trust Mistakes You Need to Avoid
Incorporating a trust into your estate plan is a good idea. Trusts help you and your family avoid costly and time-consuming probate, can address the special needs of your children and other loved ones, and potentially avoid certain taxes. But if you fail to properly set up and/or maintain the trust, it can create a myriad of headaches and potential areas of conflict between your loved ones after you pass on. That is why it is so important to retain the services of an experienced and skilled trust and estate attorney in your area to help you with establishing a trust.
Mistake No. 1 – Failing to Fund the Trust
Even if you have the documents showing you’ve successfully created a trust, if your assets are not transferred into the name of the trust, then the trust is not funded. If your trust is not funded, it will essentially be an empty vessel serving no real purpose or benefit for your estate. Re-titling assets can be a complex and tedious process, which is why it makes sense to retain an attorney to help guide you through this process.
Mistake No. 2 -Failing to Identify Beneficiaries for the Trust Assets
If you created a trust, but did not identify specific beneficiaries who will receive the trust assets, the trust will be deemed a failure and courts will create a “resulting trust” where the trust’s assets are returned to the settlor. For example, let’s say you are the settlor of XYZ trust. You list the beneficiaries as “your best friends from college.” This vague and ambiguous designation would likely lead to trust failure because the trustee cannot conclusively identify your friends from college without their names.
Mistake No.3 – Failing to Regularly Update Your Trust
Just like a Last Will and Testament, your trust documents need to be reviewed on a regular basis to ensure the people who were appointed as guardians for minor children or children with special needs are still appropriate and willing to take on the responsibility. Also, if you had a major life event, such as a re-marriage, that should be reflected in your trust documents.
Speak to an Experienced Trust and Estate Lawyer in St. Charles
As this article illustrates, setting up a trust can get complicated and there are potential pitfalls you need to avoid. That is why it makes advisable to schedule a time to sit down with an experienced trust and estate attorney in St. Charles to discuss your estate plan. Polaris Law Group is here to help. We take pride in offering an effective, streamlined experience to our clients. If you want to ensure that you and your family are properly cared for, contact Polaris Law Group today. Our firm is comprised of experienced and skilled St. Charles trust and estate attorneys Scott Stork and Raymond Chandler. Schedule a meeting with Scott or Raymond today by phone or by filling out a quick contact form today.