One of the most important decisions you can make when creating a trust is who to appoint to manage the trust. The position of the trustee is so important that you should also name successor trustees to replace a trustee who is unable to serve or who passes away. With a living trust, you typically want to serve as the initial trustee. When naming your successor trustee, the individuals you trust the most likely lack trust administration knowledge and experience. Thus, it can seem like an intimidating job, but we are here to assist you and your successor trustees to lawfully administer the trust and diligently protect your wealth.
Some of the mistakes that are commonly made in managing a living trust include:
- Failing to discuss the appointment with successor trustees. It is important to have a conversation with the individual you want to manage your affairs after your death. You should explain what the trust includes, provide him or her with a copy of it, and confirm that he or she is willing to take on the job. This is not something you want to surprise somebody with! Also, be sure to give the successor trustee’s our law firm’s contact information and let them know we are available to assist them with the duties of administering the trust. This makes transitions much smoother.
- Failing to fund the trust. Once the trust is created, it is imperative that you transfer your assets into it. A trust only safeguards the property it holds as the legal owner. Assets that are not held by the trust may be required to go through probate and they could also result in negative tax consequences.
- Failing to include a residual clause. A residual clause is a “catch-all” for any assets or property that was mistakenly omitted from the trust. This may include property that was acquired after the formation of the trust, but not properly transferred into the trust. If you have this type of provision, it can help avoid problems if a probate is required.
- Failing to update estate plan. It is common for people to create an estate plan, file it away, and never look at it again. However, as your life changes, your will and trust will need to change. Some of the most common life changes that warrant updating your estate plan are marriage, death, birth or even changes in the tax laws. You should review your estate planning documents at least once a year to confirm they still accomplish your goals.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.