Deciding to create a revocable living trust as a part of your comprehensive estate plan is an excellent choice for many people, but there are some mistakes you can make that you will definitely need to avoid. Living trusts, like all other estate planning tools, depend upon your ability to create them properly and maintain them over the years. A good living trust is one you pay attention to, not one you ignore. an experienced and qualified estate planning attorney will provide you with guidance about how to properly care for your living trust, but in the meantime, here are several mistakes you need to be aware of.
Choosing the right trustee is essential. There are two main options. First, and most commonly, people choose themselves to serve as trustee. Second, and less common, is choosing a professional fiduciary, bank or trust company to serve as trustee.
In most situations you are perfectly capable as serving as the trustee of your own living trust. While there are some situations where you might want a professional organization to serve in this role, you estate planning attorney will let you know when this is a more appropriate choice.
Successor Trustee Selection
When you set up your living trust you will typically include terms that address what will happen to the trust property after you are gone. Because most people with a living trust serve as their own trustee, you’ll also need to make a provision for successor trustee who can take over.
When choosing your successor trustee you must be able to select someone who is responsible enough to manage the property and see to the trust terms you outlined. Choosing someone simply because they are a close relative or friend and not on the basis of that person’s ability to manage property is a mistake you want to avoid.
Living Trust Transaction Records
Owning property in the name of your revocable living trust is critical for the successful use of your trust. Trusts only control assets that are titled in the name of the trust. It is therefore important to ensure assets are properly titled in the trust. Your estate planning attorney will be able to assist you with this aspect.
Living Trust Schedule of Assets
An up-to-date schedule of assets is an important piece of paperwork that you need to keep current. If you let yourself forget to add or remove assets as they come and go, your schedule will become a headache. While it can take some getting used to, making sure your schedule is always current, contains the necessary information, and is easily accessible to anyone who needs it is a necessary inconvenience.
If you have any questions about living trusts or how to properly manage them, you should talk to your estate planning attorney as soon as possible. Waiting too long and letting the mistakes build up can be a costly error. The sooner you act to correct any mistakes you might have made, the better.
- Understanding the Importance of the Simultaneous Death Act - September 25, 2023
- IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis - September 23, 2023
- National Make-a-Will Month - September 21, 2023