Three Common Reasons Trusts Fail
As you are creating an estate plan, you may choose to also create a trust. Trusts are legal documents into which you can place property you want distributed to beneficiaries in the event that you pass away. A trust is an important estate planning tool that will help your loved ones avoid the probate process, which can be expensive and time-consuming.
Unfortunately, drafting a trust is not always enough to avoid probate. In fact, trusts sometimes fail and when this is the case, it will not work in the way you intended. Below, our Daytona Beach wills and trusts lawyer outlines the most common reasons trusts fail.
Not Funding the Trust
Trusts often fail because they are not funded. Funding a trust refers to actually placing property into it after it has been created. Some people neglect to do this, or they do not do it properly. For example, titled property such as a vehicle or a home must be retitled into the name of the trust. Additionally, any assets obtained after the trust is created should also be placed into the trust.
Not Identifying Goals for the Trust
People do not always consider the goals they have for a trust. For example, you may want to leave property in a trust for a child with special needs so it does not impact the government benefits they receive. Or, you may want to leave money to a charity that is important to you.
It is important that you work with a Daytona Beach wills and trusts lawyer you feel comfortable enough with, as you will have to talk about personal information. After your lawyer has developed a better understanding of your goals, they can help ensure your legacy is protected.
Not Updating the Trust
As with so many other estate planning documents, many people create a trust and then do not think about it again. This is a mistake. However, a trust is a living document and it is important to maintain and update it regularly. Any time you acquire a new asset, you should consider whether you want to place it into the trust to protect it from the probate process. Any time there is a major life change, such as a birth or a death, you should review the trust to ensure it still reflects your final wishes.
Even when you have not acquired new assets and there have not been any major life changes, you should still review your trust every other year. This will make sure that it is current and that it works in the way you intended.
Our Wills and Trusts Lawyer in Daytona Beach Can Make Sure Your Plan Works
At Bundza & Rodriguez, our Daytona Beach wills and trusts lawyer can help you create a solid estate plan that is effective and enforceable by the courts. Call us now at 386-252-5170 or chat with us online to request a free consultation with our experienced attorney and to get the sound legal advice you need.