3 Major Mistakes to Avoid with Trusts: How to Prevent a Trust from Going ‘Bad’
June 30, 2016
Trusts can be effective estate planning devices for transferring assets, avoiding probate and reducing estate tax obligations. If, however, trusts are not properly set up and maintained during a trustmaker’s lifetime, costly mistakes can happen, potentially negating any benefits associated with having the trust.
To help people avoid these pitfalls, the following reveals some of the most common and costly mistakes to avoid when developing and maintaining trusts.
Although the following information is general in nature, you can get more specific advice (related to your circumstances) by contacting the experienced Santa Clarita attorneys at the Law Offices of Darrell C. Harriman. Our lawyers are ready to provide you with answers you need to protect your estate, your loved ones and your legacy, regardless of what tomorrow may hold.Top Factors that Can Compromise the Benefits of Trusts
Using a generic online service to develop a trust – One-size-fits-all forms or methods for developing trusts can greatly increase the risks that oversights will be made and, possibly worse, that the trust may not even be legal. What’s more is that these options can fail to provide the probate avoidance (or other protections) you want to put in place, possibly defeating the entire purpose of developing the trust in the first place.
Choosing the wrong trustee(s) – The individual you choose to oversee and manage the trust (once it takes effect) is important because this person will have a lot of control and responsibilities. Selecting a unreliable, disorganized or unscrupulous person as a trustee can increase the risk that trusts will be mismanaged, assets will be lost or ‘disappear,’ and that, in the end, your beneficiaries won’t get the assets you intended them to have.
Failing to fund the trust – Trusts simply don’t work (or make sense) if they don’t hold any assets. So, don’t forget to ‘fund’ the trust by transferring the designated asset(s) to the trust. Various assets, including (but not limited to) the following, can be used to fund trusts:
- Real estate and homes
- Checking and saving account assets
- Stocks, bonds and retirement account assets
- Other personal property like family heirlooms, fine art, jewelry, etc.
For additional answers about trusts – or your best options for estate planning or getting through California probate, contact the trusted Santa Clarita attorneys at the Law Offices of Darrell C. Harriman. Our experienced lawyers have been helping people protect their estates, families, legacies and futures for well over three decades. This has endowed us with the insight, skills and resources you can rely on for exceptional estate planning services and probate representation.
To contact our Santa Clarita attorneys today and set up a free, initial, no-obligation consult, simply call (818) 892-7093 or send our firm an email using the contact form on this page.
From offices based in North Hills, we provide the highest quality legal services to clients throughout the Santa Clarita, San Fernando Valley, Simi Valley, and the greater Los Angeles area.