Many estate plans include trusts, which can avoid probate, provide for minor children, and in some cases reduce estate taxes. You should review your estate plan periodically to ensure it meets your current needs.
Considerations for Setting up Your Trust
You need to name beneficiaries for your trust. Often these include children or grandchildren. As children get older, you should consider creating or amending a trust to reflect each child’s needs. You should also review your trust to determine whether the date the children will receive their inheritance is still appropriate. You might decide to delay giving your children large sums of money until they have reached a certain age or have achieved educational or career milestones. Additionally, you should periodically review all your estate planning documents to ensure the people who were appointed as guardians for minor children are still appropriate and willing to take on the responsibility.
In carrying out the terms of a trust, the trustee might have to defer payments to beneficiaries. Choose wisely if selecting a family member as the trustee because certain circumstances can create tension in an otherwise loving relationship. In some cases, you may consider hiring a corporate trustee or a trusted non-family member instead.
5 Common Mistakes to Avoid with Your Trust
Setting up a trust can seem daunting, but it doesn’t have to be. Here are five common mistakes to avoid:
- Not funding the trust
- Failing to provide clear instructions for the trust
- Not specifying beneficiaries
- Making a poor choice in trustee
- Failing to review and update your trust
Before creating and funding a trust, you should contact an attorney that has experience in estate planning. The attorneys at TuckerAllen can help ensure that your trust is prepared properly.