Why Do Trusts Often Fail?
Are you wondering whether you should have a trust? Are you unsure what a trust is? A trust is an estate planning tool that you, the grantor, can place all your assets into. It is highly recommended that you have a Florida estate planning attorney help and advise you in the creation of your trust. Your trust will be managed by a trustee, selected by you, for the benefit of the trust’s beneficiaries you name.
There are two parts to a trust. First, the trust itself, which is created through a legal document. This document identifies the purpose of the trust, the trustee of the trust and his or her powers, the beneficiaries of the trust, and the requirements for distributing the trust assets to the beneficiaries. Second, is the “corpus” of the trust, or, the sum of money or property placed into the trust. Unfortunately, because not all trusts are properly set up they end up failing.
What happens to cause the trust to fail? Incredibly, the primary reason why some trusts fail is due to inadequate or lack of funding. Many people go through the process of hiring an attorney to set up the trust, but then they fail to follow through on all the necessary next steps that must be taken to fund the trust after the trust is created.
Two benefits associated with utilizing a trust in your estate planning, are avoiding probate and simplifying the administration of your estate. In order to have your trust work, though, you need to ensure that all of your assets are placed into your trust. So, once your trust is set up you need to retitle your current assets into the name of the trust. Most importantly, you must remember to add any future assets you acquire to the trust. If you fail to do so and some of your assets are left outside the trust, your estate will likely need to be probated. If your goal is to avoid probate through the use of the trust, but you do not update your trust with new assets, it will fail.
Again, we recommend that you work with an experienced Florida estate planning attorney, who will not only help you establish your trust, but will help you understand how to properly fund your trust so that you avoid this common pitfall. Your attorney will also help ensure that the trust that you are creating to meet your estate planning goals will actually satisfy those goals and will not fail.
When your family or financial health is on the line, trust attorney Paul Riffel to help you protect your interests and achieve your goals. Attorney Paul Riffel has been practicing law in Florida for over 39 years, focusing in the areas of Tampa estate planning and family law. We encourage you to contact us and schedule a meeting with us.