A trust is a joint estate tool used to protect both the beneficiaries and the assets from the probate process and high tax. Mind you; this tool can serve a ton of function, depending on the purpose of the person that intends to use it.
But unfortunately, mistakes happen, which sometimes is avoidable. Therefore, working with the right attorney is very important, as it limits the number of errors you’re likely to make during the process.
Here are some of the common types of problems with trust.
- Choosing The Wrong Type Of Trust
When it comes to choosing a trust, you need to be clear on your goals and your assets’ desires. For instance, if you’re to require the Medicaid benefits, you’re to ensure that your assets aren’t used as part of your income.
Usually, that will determine if you’re eligible or not. However, a living trust doesn’t offer this sort of protection. It is merely one of the examples that can hurt your financial planning goals.
- Not Considering The Actions Of Your Spouse
Upon your death, your trust will most likely be handled by your spouse unless you determine if your spouse has the right to affect the ultimate trust distribution. Before sitting down to formulate the trust, you have to ensure that you and your spouse are on the same page to avoid discrepancies in the future, primarily upon your death.
Although it is good to give your spouse the flexibility to effect change when necessary, you have to be careful to ensure your spouse does not have an interior motive that might spell doom to beneficiaries of your trust.
- Not Protecting Beneficiaries From Lawsuit Or Divorce
Most times, people don’t know that they have the power to protect beneficiaries, especially when there is a lawsuit or divorce that threatens their stake in your assets. It is crucial, especially since you wouldn’t be around to make further changes to your trust, as you’re already dead. The conditions set in a place where you’re alive is what will determine how the process spans.
- Not Funding The Trust
Take note that your assets don’t automatically go into your trust without you having to title your purchases to your trust. If you fail to title your assets, they will have to go through probate, which is something that you should avoid at all cost.
- Choosing The Wrong Trustee
When appointing someone as your trustee, it has to be someone who you genuinely trust and can vouch for representing your best interest. Remember, this person will be in charge of your assets and determine that your wishes are fulfilled. So, never be in haste to choose trust, but take your time and ensure you make the right decision.
When you’re drafting your trust, never be in haste unless in situations beyond your control. Ensure you protect your beneficiaries, and choosing the right trustee will make a whole lot of difference.
Contact Lamb, Carroll, Papp and Cunabaugh, P.C., Attorneys at Law today for legal help.