Three Common Mistakes When Establishing A Revocable Trust
When planning your estate, revocable trusts are very useful tools. Revocable trusts are legal documents that contain assets. Trusts are created by individuals known as grantors and the grantor places property into the trust. Grantors can control the property within the trust during their lifetime and, as their name suggests, revoke it at any time. Upon the grantor’s death, revocable trusts typically become irrevocable. Because they are separate legal entities, the property within the trust is not subject to probate and can pass directly to the beneficiaries named within the trust.
Trusts are only effective if they are executed properly. Otherwise, they may be deemed void and the property may have to go through probate. Below, our Daytona Beach trusts lawyer outlines three of the biggest mistakes made that can render a trust invalid.
Not Transferring All Property Into the Trust
After establishing a trust, you must then fund it with the property you want to keep out of probate. Funding the trust means changing ownership of the property from you to the name of the trust. For example, if you wish to place real estate into the trust, you must change the title deeds on the property. Over a person’s lifetime, they are inevitably going to acquire more assets and lose or sell others. People often forget to transfer newly acquired assets into the trust, meaning they are not protected from probate in the event that you pass away.
Not Updating the Trust
Life is full of changes. People get married or divorced, have children, and sadly, people pass away. Still, too many people establish a trust and then put it away, not to think about it again. They fail to make the necessary changes to the document that reflect these life events and the impact they have on the family, and their assets. This can lead to disputes, confusion, and unintended consequences. For example, if you survive your successor trustee, you will have to name a new one.
It is important to review your trust every three to five years or after any major life event to ensure that it still reflects your current situation and aligns with your wishes.
Not Safeguarding the Document
Just as people often do not think of a trust after setting it up, some also put the document away and forget about it. It is only when they want to sell or refinance property in the trust or make other changes that they find themselves scrambling to find it. In some cases, the document is never found. It is important to keep your trust, and other estate planning documents, in a fireproof and waterproof safe so it is protected and not destroyed, stolen, or misplaced. Giving copies to your loved ones can also act as a backup in the event that something happens to the original.
Our Trusts Lawyer in Daytona Beach Can Draft Your Documents
At Bundza & Rodriguez, our Daytona Beach trusts lawyer can draft all of your estate planning tools and ensure that it is executed properly. Call us now at 386-252-5170 or fill out our online form to schedule a consultation and to learn more.
Source:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/0736.html
