Creating a trust is an important part of the estate planning process. A trust can safeguard your assets while ensuring your wishes are carried out—even from beyond the grave. It’s critical to understand Florida state law and the procedures involved in creating a trust to ensure that the document properly protects your family and assets when you are gone.
The following blog discusses common mistakes that Brandon estate planning lawyers see others make that cause their trusts not to work properly upon their death or incapacity.
Leaving Out Key Elements
Many people try to save money by using trust templates they find online. Unfortunately, if you don’t include relevant information or make an error, your documents will not work as you intend them to. As the old saying goes, “you don’t know what you don’t know…” and that’s especially relevant when creating legal documents that are designed to carry out your wishes and protect vulnerable beneficiaries when you are gone.
Picking the Wrong Trustee
Your choice of trustee matters deeply! This is the person who will be responsible for managing your trust and carrying out your wishes if you become incapacitated or pass away.
If this person is not honest, or simply not prepared for the responsibility, they could cause problems for your loved ones and even defraud them out of their inheritance. That’s why your Brandon estate planning attorney will tell you that it’s so critically important to select a successor trustee whom you trust to carry out their duties.
Forgetting to Transfer Assets into Trust
A trust is useless without funds and property. Your trust can only control assets you transfer into it. Even if you leave explicit instructions regarding the distribution of assets, those instructions are invalid if those assets are not held in the trust.
Since many people choose to remain the trustee throughout their lifetime, they can transfer assets into the trust until the day they die. Some trustees update their wills to include newly acquired assets or increases in funds but forget to move them to the trust account. If that happens, your family won’t automatically receive the property you intended and might face probate court.
Leaving Assets to Young Adults without Outlining the Terms
Most people want to secure their children’s futures. You likely want to ensure that your kids won’t have to struggle when you’re gone. However, it could be a mistake to name your young adult son or daughter as the beneficiary of your trust without including a distribution schedule. If they receive everything at once, they could spend the money recklessly.
It’s crucial to choose a trustee to manage the account on behalf of your child. When you execute the legal document, you can outline exactly how you want the assets distributed. For example, you can state you don’t want your son or daughter to receive anything until they turn 21, 25, 30, or even 40 years old. You could also create a schedule if you want your successor trustee to transfer a specific amount of funds weekly or monthly.
Failing to Update the Trust
You can’t set up a trust and never think about it again. Updates are necessary, especially after significant life events, such as:
- Marriage
- Divorce
- Birth of a child
- Death of a trustee or beneficiary
- Acquiring new assets
When you don’t review and update your trust periodically, disputes could arise while your successor trustee is distributing assets. For example, if you selected your spouse as the beneficiary but get divorced and pass away without appointing a new beneficiary, they can receive your assets instead of your children or another family member you would have chosen.
Contact Us
If you’re considering setting up a trust, you should not proceed without consulting an experienced estate planning lawyer. You need a skilled legal team by your side to provide the representation and guidance necessary to protect your interests. We are here to support you through every step of the process. To set up a consultation at our Brandon law firm, contact (813) 438-8503.