A living trust enables your family to avoid probate and the inconvenience involved with lengthy court proceedings. With a living trust, your assets are included in one document and managed by a trustee. Here are some mistakes you should avoid with a living trust.
Combining Trusts with Bank Accounts
A properly set up trust puts some funds aside for the benefit of your family. One mistake people make is setting up a trust and then frequently withdrawing funds for living expenses. This is similar to treating the trust like your personal bank account. It would be wise to minimize withdrawals from your trust.
Failing to Designate a Trustee
If you have appointed yourself the trustee of your trust, you should consider having a successor trustee. The successor trustee will manage the trust in case you are incapacitated.
The successor trustee should be someone you can trust to handle your assets if you can no longer handle them. Many people end up choosing their children or best friend to manage their trust funds. Don't let your choice be influenced by sentiment. Your probate lawyer can help you vet potential candidates and choose the most suitable successor trustee.
Assuming the Living Trust Replaces a Will
Even after setting up a living trust, you should consider having a will in place. For example, if some of your property is not included in your living trust, that property can be incorporated into your will.
The will helps account for any property that has not been allocated to another person. Without a will, unaccounted for assets will be issued by the state.
Creating a DIY Trust
DIY trusts don't often work. While many people think that a DIY trust will help them avoid the legal expenses associated with hiring a lawyer, nothing can be further from the truth.
Trusts should follow the guidelines set by the federal and state government. Otherwise, the trust may be considered null and void. Working with a probate lawyer will ensure you meet the federal and state requirements of living trusts.
Reviewing Your Living Trust
Since life is ever-changing, you need to review your living trust regularly. For example, acquiring a new asset can change the conditions of your trust.
Also, having a new family member will change the number of beneficiaries listed in your trust. Your probate lawyer will ensure your trust is up to date with your changing estate-planning needs.Share