Does your estate plan include a trust? If so, this is more common than you may think. A trust can help your loved ones avoid the probate process after you pass, while providing for your minor children or any children you have with special needs. In some cases, a trust can even help to reduce your estate taxes.
While this is all true, it is important that you review your estate plan regularly to make sure it still meets your needs. Also, knowing some of the most common mistakes made when creating a trust can help you avoid them, preventing future issues.
Considerations When Setting Up Your Trust
When creating a trust, you have to name your beneficiaries. In many cases, these are going to include your spouse, children, grandchildren, and in some cases, great-grandchildren. As the children named in your trust get older, you should think about amending your trust to ensure each child’s specific needs are reflected.
You also need to review the information in your trust to figure out when your beneficiaries are going to receive the inheritance you are leaving them. In some cases, you may wait to give your children large sums of money until they have reached a specific age, or until they hve achieved career or educational milestones.
It’s a good idea to review all of your estate planning documents from time to time to ensure individuals you have appointed as guardians for your minor children or any children you have with special needs are still appropriate and are still willing to take on the huge responsibility.
When carrying out the terms of your trust, your trustee may be required to defer payments to your beneficiaries. If you are selecting a family member, be sure to choose wisely. After all, there are certain situations that may create tension in a relationship that is otherwise loving. In some cases, you may want to think about hiring a trusted non-family member or even a corporate trustee.
The Most Common Mistakes to Avoid When Creating a Trust
While setting up a trust may seem somewhat daunting, it doesn’t have to be. Knowing the top mistakes that are made when doing this can help ensure you avoid them and minimize the stress and hassle related to this situation.
The most common mistakes include:
- Not reviewing and updating your trust on a regular basis
- Not funding your trust
- Making a bad choice when appointing the trustee
- Not specifying who the beneficiaries are
- Not providing clear instructions for your trust
Before you create and fund your trust, it is a good idea to contact an attorney like The KC Estate Planner, LLC. They can help ensure the documents are properly set up and ensure that all unique needs you may have are met. Having the help of a legal professional can give you peace of mind that everything is handled properly. With the help of the professionals all of your estate planning needs can be met.