Are you considering adding trusts to your estate plan? Are you familiar with what a trust can do for your estate plan, but also what you must do as well? First, a trust is a legal document that 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. Secondly, the trustor must fund or place into the trust his or her assets, such as money or property.

Now that you know what a trust is and that it must be funded, why do trusts often fail? Again, not funding your trust is often the first reason a trust fails. Unbelievable as it seems, it is often not the failure to properly establish the trust in the legal document, but most trusts actually fail due to inadequate funding. Incredibly, many people go through the process of hiring an attorney and have their trust set up and ready to go. However, they do not follow through with the next crucial step. They neglect to fund the trust after the trust is created.

You may want to create a trust in your estate planning to utilize the benefits you may receive, including avoiding probate and simplifying the administration of your estate, but you must be sure all of your assets are funneled into the trust. Putting your assets into your trust may include retitling your current assets in the name of the trust and remembering to add any later acquired assets to the trust in the future. You must be mindful that if you fail to do so and some assets are left outside the trust, then your estate will probably need to be probated and your goal of avoiding probate through the use of the trust will not be achieved.

Many times the second problem with the success of a trust is that many Floridians do not know or have a clear vision of what they actually want out of their trust. The most important aspect in creating your trust agreement is knowing what you want to ensure your attorney can help you with so that you may reach your goals for your legacy.
For example: Do you have a child with special needs? Are you divorced? Do you have a charity that you care about and want to support?

Finally, the third reason that a trust may fail is that the trustor does not update the trust. Remember, once your trust agreement is created, it does not mean it is done and never needs to be revisited. Quite the opposite. Your trust is a living document that you need to frequently update to ensure that it reflects your wishes. Meeting with your 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 you avoid all the common pitfalls mentioned in this blog.

Our office is available to assist on any and all of these issues. We do telephone, computer, and face-to-face appointments. Our face-to-face appointments are held outside in the open air (frequently selected by clients for document signing) and inside our office conference room. We follow all CDC guidelines. Our office procedures adhere to COVID-19 safety protocols and are designed and enhanced by medical review and air quality engineering.