Mistakes You Must Avoid Regarding Your Trust
Most people include a trust in their estate plan for one popular reason– to avoid probate. However, it is important to create your trust under the supervision of an attorney to ensure there are no errors. One small mistake can prevent your trust from working as intended. These mistakes can lead to costly probate and even transfer your assets to the wrong person.
Planning an estate is not a fun process and involves many complexities. However, trust can make it easier to execute your plan. In order to create a legally valid trust, schedule a free initial consultation with an attorney and discuss your options.
Mistakes to avoid when creating a trust
- Not funding the trust.
A trust allows you to get control of the assets you put in it. However, you need to fund it regularly and adequately and update the beneficiary designations. It is a common mistake to forget to keep funding the trust, which triggers probate. Remember that one of the most important reasons for setting up a trust is to avoid litigation.
- Having a poorly managed trust.
Googling about trusts and using online resources to create one can save you money, but you may have to pay twice the price later. The information you find on the Internet and estate planning services is unreliable. If you lack research, your trust documents could lack legal validity. This is why it is recommended to have an attorney prepare your documents and advise you.
- Not designating a successor trustee.
If you have already created a Trust, you may have appointed yourself as the Trustee for the time being. However, it is important to designate a successor trustee before it is too late. While you are not expecting something unfortunate to happen to yourself, choosing a successor trustee is not something you want to leave for later.
- Appointing the wrong Trustee.
Selecting the right person for the position of Trustee is important because they have an important role to play. They are going to be responsible for maintaining the assets in the trust and ensuring that your wishes are carried out as intended. Choosing the wrong person can be highly detrimental, leading to family issues.
- Thinking your trust is protected from creditors.
Just because your trust is protected from probate, that does not mean it is protected from creditors as well. If your trust is revocable, you can transfer assets in and out of it anytime, and it is not protected from creditors. Always remember that a creditor’s ability to reach your trust is directly proportional to how much control you have over it.