5 Common Mistakes to Avoid When Writing Living Trusts
Creating a living trust that ensures your assets are handled correctly requires knowing what not to do. Here are mistakes to avoid when writing living trusts.
Need help writing a living trust? This article talks about the 5 Common Mistakes to Avoid When Writing Living Trusts.
Your living trust is a critical part of your estate plan. However, there are a few commons mistakes that can disrupt your estate planning objectives and void your trust.
If you keep reading, you'll learn those common mistakes so you can avoid them!
1. Not Having a Properly Drafted Trust Document
Whether you are writing a trust document yourself, or you are getting the help of an estate planning attorney, it's important that your living trust details are drafted in the proper document.
Your living trust document must include valid trust language. Although DIY templates are customizable, it's important that you do not delete any legal language that is important to the setup of the trust.
You also need to include all of your specific objectives. A basic trust document will not always meet all of your personal objectives. Therefore, you need to be meticulous when ensuring all essential details and objectives are present.
2. Not Correctly Transferring Assets to the Trust
The purpose of your living trust is to distribute your assets to any beneficiaries that you have stated in your trust, or to create specific purpose Trusts, like special needs trust. To do this, you need to have proper funding your trust and understand how to transfer assets. A last will create by you is not enough.
Wanting to transfer your assed has no legal effect if you don't follow through with the transfer.
Most assets will require you to transfer title to the asset to your trust through filling out the necessary forms.
And, with some accounts, you will need to designate your trust as the beneficiary of said assets. Only a licensed attorney will know what needs to be done. Some special types of accounts, specially retirement ones, may or may not be added to the trust.
3. Not Picking a Successor Trustee
If you are the trustee of your living trust, you should still look to choose a successor trustee. Your successor trustee will manage the trust if you become unable to do it yourself.
It's also important to remember that your successor trustee should be someone you trust implicitly. You need to know they are going to manage your trust in accordance with your wishes. A revocable living trust can be changed in Arizona.
4. Believing a Living Trust Is All That’s Required
Living trusts are incredibly important in terms of your estate plan. However, you will most likely be required to implement other valuable estate planning documents to finish your plan.
When it comes to your living trust, your successor trustee can only handle the financial related decisions associated with the trust.
So, if you have any worries about potential medical decision to be made if you are unable, you need to address those concerns in a document such as a durable power of attorney for healthcare. We usually recommend a full estate planning package, which will include all Powers of attorneys, as well as any other documents that you need. Discussing the creation of a Living Will with your estate planning attorney is important as well.
5. Not Reviewing Your Trust Regularly
Even if you are certain you haven't made any mistakes in your living trust, and you have ticked all the boxes. There is still more for you to do.
Your life is forever changing, and as changes occur, you need to change your trust in them. This doesn't just include major life events or incidents, but even small changes like the ownership of a new asset will need to be noted.
This is why it's important for you to review and edit your trust on a regular basis to ensure it's up to date. We recommend our clients to review their trusts once a year, as well as come to see us for a consultation at least every 5 years.
Get the Help You Need Writing Living Trusts
We hope you gained value from this article about living trust. Writing living trusts can be overly complicated, and there are a lot of options for trustees. This is why most people prefer to leave it to the experts. At Citadel Law Firm we love to help. Our Trusts and Wills Attorneys are here to guide you and help you every step of the way.
If you'd like to get expert advice, click here to schedule a free consultation call or call (480) 565-8020. And check out our living trust reviews!