Many people use living or revocable trusts as part of their estate plans. Trusts are powerful estate planning tools that can help people achieve a variety of goals including avoiding probate and protecting beneficiaries. A large number of trusts are signed and then placed in a deposit box not to be looked at again for many years, which can create unintended obstacles. To make sure that your trust is used in the best manner possible, it is best to remain informed about the most common mistakes involving trusts.
Not Properly Titling Assets in the Name of a Trust
Because some assets may still be in your name after your death, it is critical to make sure that all assets are properly placed in you trust. In many cases, with the exception of qualified retirement funds, all assets should be transferred into your trust during your life. Assets that are properly placed in your trust will be distributed in accordance with the terms that you used to create your trust.
Failing to Properly Update Your Trust
It is critical that a person reviews his or her trust at least once a year to make sure that it still satisfies all needs. Some of the changes that can affect a trust include births, death, divorce, and marriages.
Using Form Documents
Many people try to create their own trusts by using forms on the internet. These forms, however, fail to take many unique conditions into consideration. Instead, it is best to consult with an experienced attorney who can make sure that your trust takes all important elements into consideration.
Selecting the Wrong Trustee
Many people who create trusts select their oldest child as trustee. It is important, however, to make sure that a trustee has the skills necessary to manage their assets. Not only might it be a better idea to not name your first born child as trustee, you might even decide to appoint multiple co-trustees.
Knowing That Trusts do Not Protect You From Creditors
Many revocable living trusts are not capable of protecting trust creators. Instead, if a person has full access to trust assets, creditors do, as well. Assets located in a revocable living trust are also available for Medicaid purposes.
Assets in a Revocable Living Trust Escape Estate Taxes
Many people think that assets placed in a revocable living trust escape estate taxes. After a person’s death, any assets in a revocable living trust are considered assets for the purposes of estate tax. As a result, trusts often do not escape the grasp of estate taxes.
Talk to a Seasoned Oklahoma Estate Planning Lawyer
There are many considerations and intricacies involved with estate planning. Fortunately, the assistance of a knowledgeable attorney like Jim A. Lyon can help to make sure that each aspect of your case resolves in the best possible manner. By obtaining the assistance of our legal counsel today, you can make sure that each element of your estate planning goals are reached.