Do you have a Florida estate plan? In addition to your estate plan are you thinking about creating a trust? What can a trust do? As a legal document, a trust will give 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. However, once the trusts have been created, the trustor must fund or place into the trust his or her assets, such as money or property.
With your knowledge of what a trust is and that it must be funded, why do trusts often fail? The main reason, not funding the trust. Most of the time it is not the failure to properly establish the trust in the legal document, but most trusts actually fail because of inadequate funding. Often, people go through the process of hiring an attorney and have their trust set up and ready to go. However, and this is a huge error and will cause the trust to fail, they do not follow through with the next crucial step. They neglect or forget or put off funding the trust after the trust is created.
One of the first reasons that a trust may fail is not placing the assets in the trust. To explain, people will decide to create a trust in their estate planning to avoid probate and simplify the administration of their estate. However, and this is important, the grantor (person creating the trust) has to be sure all of his or her assets are put into the trust. For example, retitling current assets in the name of the trust and, this is vital, remembering to add any assets acquired later to the trust in the future. Be mindful, if any assets are left outside the trust, then a person’s estate will probably need to be probated and the first goal of avoiding probate through the use of the trust will not be achieved.
The second reason that a trust may not be successful is that many Floridians do not really know or have a clear vision of what they actually want out of their trust. When you meet with your Florida estate planning attorney and begin the process of creating your trust you need to tell your attorney what goals you have for your trust. Your attorney can work with you to accomplish and reach the goals you have and protect your legacy. You will need to share information with your attorney about your child with special needs, or that you are divorced or that you have a charity that you care about and want to support.
The third and final reason that a trust may fail is that the grantor does not keep the trust updated. You must remember, once your trust is created, it does not mean it is done and over. In fact, the opposite is true. Your trust is a living document that you need to frequently update to ensure that it reflects your wishes. Meeting with your Florida estate planning attorney, at least every other year, is critical to ensure your plan stays effective and represents what you want. Without this step, it may fail to reach your goals.
To help ensure that the trust you are creating meets your estate planning goals and will actually satisfy those goals and will not fail, you should work with an experienced Florida estate planning attorney. Your attorney will not only help you establish your trust, but will help you understand how to properly fund your trust so that your trust is successful in reaching your goals.
At the Perlin Estate Planning & Probate our credentials enable us to provide a multi-disciplinary approach to our legal services. By building relationships with our clients, we are also able to understand each client’s needs and desires, and we support such goals through thoughtful, comprehensive planning techniques. We encourage you to contact us and schedule a meeting.