Creating a trust can be complicated and even experts make mistakes. There are some common mistakes that are made that you should be aware of to make sure that your lawyer does not make them.
When you hire an attorney to create a trust for you, do not assume the attorney should do everything. Creating a trust should be a partnership between the attorney and the client.
The attorney needs the client to adequately work with him or her so the attorney has all the information needed to draft an effective trust. If that does not happen, then, as Barron's Penta Daily discusses in "Five Killer Mistakes Trust Lawyers Make," there can be problems with the trust.
Common mistakes include:
- Inheritance Planning – An attorney can make sure all of your current assets are planned for, but if you are expecting to receive a large inheritance in the future, then your attorney needs to know about that so it can be planned for as well.
- Multiple Attorneys – If you have different attorneys for different estate planning documents, then it is more likely that there will be contradictions in those documents. That can be expensive to sort out.
- Multiple Beneficiaries – It should not be assumed that one trust will work for everyone you wish to name as a beneficiary. Treat them as uniquely as circumstances require.
- Decanting – Attorneys and clients need to discuss whether the client wants trustees and beneficiaries to be able to modify the terms of the trust at a later date, to include "forum shopping" when it comes to finding more favorable state laws.
- Trust Termination – It is not always a good idea to create a trust that terminates at a specific time no matter what happens.
A qualified estate planning attorney can help ensure nothing falls through the cracks, but he or she needs your assistance.
Reference: Barron's Penta Daily (June 18, 2016) "Five Killer Mistakes Trust Lawyers Make"
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