5 Mistakes You Must Avoid Regarding Your Trust
Planning your estate can be an interesting journey -- you have to organize and oversee all of your assets while also determining how your beneficiaries will receive their inheritance. You ultimately decided that having a trust would make it easier for you to execute your plan. But now, you want to learn more about how to structure your trust so that you can satisfy your short- and long-term needs.
The good news is that our trust attorneys in New Jersey can help you protect your assets and make the right decisions regarding your trust. Here are the five most common mistakes you should avoid:
Mistake #1 -- Appointing the Wrong Trustee
The trustee has an important job -- they’re responsible for overseeing assets maintained within the trust. They also have to devote a lot of their time to achieving the objectives of your estate plan while also acting in the best interests of your beneficiaries. They can make investment decisions, issue reports to beneficiaries, and plan for improving tax efficiency.
Now you understand that the trustee serves avital role in managing your trust. Choosing the wrong person can be highly detrimental, and it can lead to years of conflict among family members. Make sure that your trustee is the right person to oversee your assets.
Related post: Key Differences in Trusts You Need to Know
Mistake #2 -- Miscalculating Your Beneficiaries’ Financial Needs
Many grantors (people who create trusts) will often overlook the long-term financial needs of their beneficiaries. Various expenses and financial obligations will begin accumulating for your beneficiaries, including mortgages, medical bills, home repairs, and more. Keep in mind that you can always issue cash payments and transfer other assets to your beneficiaries in fixed increments.
Mistake #3 -- Not Enough Funding
With a trust, you get to control the assets maintained within it. However, you have to fund it adequately, which might require you to transfer ownership of assets and update your beneficiary designations. Grantors often forget to continue funding their trusts, which will trigger a process known as probate. Remember, one of the main purposes of creating a trust is to help your family avoid litigation after you pass away.
Related post: Why a Grantor Trust is a Helpful Estate Planning Tool
Mistake #4 -- Neglecting To Review and Update Your Trust
Many important life events will change the dynamic of your family -- marriages, divorces, death, and childbirth. These events should prompt you to review and update your estate plan. However, grantors will often forget and even neglect to modify their beneficiary designations and amend the terms of the trust. It would help if you periodically met with your estate planner to discuss your plan and make any necessary changes.
Mistake #5 -- Not Including Disabled Beneficiaries
If you have any children or close relatives who are disabled, you need to set aside an inheritance with special provisions that still allow them to qualify for public assistance. Many grantors will also leave the inheritance to another trusted beneficiary to provide for the disabled individual. However, if the beneficiary dies, divorces or loses a lawsuit, the disabled individual will likely have trouble recovering their inheritance.
Make Sure You Have a Flawless Estate Plan
Here at Borenstein, McConnell, & Calpin, we have a team of attorneys who can help you begin the process of planning your estate. Our trust and estate planning attorneys in New Jersey ensure that families can secure their assets and prepare themselves for the future. We provide you with peace of mind knowing that you can plan for the many uncertainties in life. Schedule a consultation with us today, and we can help you get the process started.
Getting in touch
Borenstein, McConnell & Calpin, P.C. is a Wills & Estate Planning law firm serving Central and Northern New Jersey, as well as New York City. We strive not only to give you a great client experience, but to become your trusted adviser for life. To reach Alec, please send an email to firstname.lastname@example.org.
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