There are many common misconceptions regarding trust funds, like only the ultra-wealthy should create them or that trusts can be completed online without an attorney. If you are interested in creating a trust fund, understanding the most common mistakes people make when doing so is critical. When you’re ready to begin planning your estate, connect with PA trust attorneys to ensure you avoid the trust errors explored in this blog.
What is a trust fund?
A trust fund is a type of estate planning document that helps hold assets by transferring the title of a property to another person. Creating a trust has many benefits, from minimizing estate taxes and protecting assets from creditors.
There are many different kinds of trusts you can consider establishing. The two most common, however, are recoverable and non-revocable trusts. A revocable trust can be changed and altered through the duration of your lifetime but becomes unchangeable upon your passing. A non-revocable trust, on the other hand, becomes unchangeable from the moment it is created.
If you’re interested in creating a trust fund but aren’t sure what kind can benefit you, it’s important to understand that you should connect with an attorney to discuss your wishes, as they can help determine the best kind of trust for your unique circumstances.
What trust errors should I avoid?
If interested in creating a trust fund, it’s important to understand what errors people commonly make and how to avoid them.
Generally, the most common mistake people make when establishing a trust fund is doing it on their own. Unfortunately, there are many websites that offer “do-it-yourself” documents. Though it may seem cheaper and easier to create this on your own, you’ll find that trying to create a trust on your own can have negative consequences. You can make errors when writing your trust that invalidate it and leave your loved ones and assets vulnerable.
Another mistake people make when creating a trust fund is not choosing the correct trustee. Whether you’ve named yourself as the trustee and must name a successor or need to appoint someone, ensuring you make the correct decision is essential. Unfortunately, if you put your trust in the wrong hands, they may not understand the importance of following these decisions, which can negatively impact your beneficiaries.
Finally, you may not update your trust as your circumstances and family change. As such, the terms may not be up to date, meaning your assets can be distributed in ways that no longer reflect your wishes.
If you’re ready to create a trust fund, it’s in your best interest to connect with an experienced attorney. At Friedman Schuman Layser , we understand how confusing these matters can be, which is why we are committed to helping ensure your wishes are met. Contact us today to learn more.
