Trusts are one of the most popular state planning tools. Many people choose to create a trust because it allows them to set assets besides that they are safe and secure for their beneficiaries. It is important that you know what mistakes to avoid whenever you are setting up a trust. If you have a living trust, pay attention to how you set it up because mistakes can cost you. Unfortunately, there are many simple errors that people make when they set up a trust especially for those who are new to estate planning. These are some of the most common mistakes you should avoid.
Not identifying assets
One of the first things that you should do is create a list of assets.you should have an idea of what kind of assets to put in your trust. When you know what assets to put in your trust, you can find out the procedure to properly transfer them. Some assets require that you transfer title and fill out the appropriate forms. As you can learn from a skilled trust lawyer like one from Kaplan Law Practice, LLC, there are certain asset types that should not be put in a trust as well. This includes cash and retirement accounts.
Not choosing a proper trustee
Who you choose as your trustee matters whenever you are setting up a trust. There are many requirements that a trustee must meet, and they have many legal obligations. Once a trustee is designated, they must fulfill their duties. The trustee that you select should be responsible, organized, and respects your wishes regarding how you want your assets to be handled. They must be reliable and able to do a good job of record-keeping.
Not choosing a successor
It is always a good idea to have a backup plan in case a trustee is not able to do their duties. In the event that your chosen trustee is not able to complete their duties to manage your trust, such as if they become incapacitated, a successor trustee will step in to assume the role. Have someone in mind that you can choose to be your primary trustee’s successor in case of incapacitation or another event.
Not making regular updates
Don’t forget to make updates when you need to. It is important that you continue to review your trust well after its initial creation. There could be changes that may be required due to life events like the death of a beneficiary or other loved one. Whenever a big life change occurs, you should always review the terms of your trust as well as your general estate plan to make sure it is accurate. Have a lawyer assist you with making necessary changes if you need further personalized help.
For more information about trusts and how you can establish one the right way, speak to a skilled and experienced lawyer so that you can quickly get started on your estate planning goals.