What Are Five Common Mistakes When Setting Up A Trust?
- Not Reviewing Your Trust Regularly
- Not Having A Properly Drafted Document
- Believe That You Only Need A Trust
- Setting Wrong Goals
- Naming The Wrong Trustee Or Beneficiary
Why Should You Review A Trust Regularly?
The importance of accuracy in your trust cannot be overstated, as it reflects your family, personal, and financial situation at the time of its creation. As circumstances change, your trust must reflect those changes as well. To ensure that your trust meets your needs, it is wise to review it once a year, or whenever necessary, and to transfer any new assets or property immediately. Before signing off on your trust, make sure to read all the details carefully and ask your attorney any questions about sections that are unclear.
How Can Having A Poorly Drafted Document Affect You?
Many individuals attempt to save money by utilizing online samples, do-it-yourself forms, or selecting an attorney with the lowest fee. However, it is important to note that trusts can vary greatly in complexity and purpose. If the trust documents are not properly prepared, it can result in a waste of money and the trust not functioning as intended. To ensure this does not happen, a valid trust language should be included in the trust that reflects the specific objectives of the trust. Additionally, asset protection clauses and checks and balances should be included to prevent beneficiaries or trustees from making financially detrimental decisions that could lead to a considerable loss.
What Is Effective Estate Planning?
Over half of the U.S. population have not prepared a will or living trust to secure their estate. However, you may need to consider other estate planning documents, such as a power of attorney for healthcare and/or wills, to ensure that your assets, property, and loved ones are fully protected. If you’re not sure what other estate planning documents you should have, it may be wise to consult an experienced estate planning attorney at Gallinger Law.
What Happens When You Set Wrong Goals For Your Trust?
You want to set up the right goals for your trust to ensure that your property and assets are not misused. When setting up the trust, you get to decide what money is used for before maturity age. Hospital bills, education, and weddings are common reasons to withdraw money. All other expenses not listed would have to wait until maturity age.
Make Sure That You Name The Right Beneficiary And Trustee In Your Trust
If you have taken on the role of trustee, you must appoint a successor trustee as soon as possible. This person will step in to manage the trust if you become incapacitated or pass away. Choosing the right successor trustee is vital, as they will be responsible for administering the trust in your absence.
To protect your desired beneficiaries, make sure to name them in your trust straight away. If no beneficiary is listed in your trust, the assets and property will belong to the estate upon your passing.
How Can I Ensure I Do Not Make These Common Mistakes?
If you are considering creating a trust, Gallinger Law can help. Our experienced attorneys have 17 years of experience in estate planning, business law, nonprofit applications, and immigration services for Long Beach and nearby communities. We can guide you through the process of setting up the appropriate trust, no matter the size of the estate. For more information or to schedule a consultation, call 888-255-9147 today.