Are you contemplating adding a trust to your Florida estate plan? Trusts are a useful estate planning instrument: To keep an estate out of probate. For tax planning purposes. For long-term care planning by structuring a person’s assets in a way that makes him or her eligible for Medicaid to cover the expense of a nursing home. Unfortunately, though, trusts can also fail. We would like to share with you three reasons why a trust may fail.
1. The trust was never funded. Working with your Florida estate planning attorney and creating a trust is a lot of work. Equally important is signing the trust and making it legal. However, there is one more very important step, the trust must be funded. All of the assets described in the trust must be moved into the trust in order for the trust to be funded. This means that the trust must hold title to all of your assets. This involves changing the deed on your home, the title to cars, boats, RV’s, the ownership of bank accounts and stock certificates intended to be transferred into the trust. Funding a trust can be a critical step in properly establishing a trust, but it is also one that may be overlooked. If the trust is not funded, the trust’s beneficiaries may find that they will receive nothing from the trust.
2. The beneficiaries were never updated. Once you have completed your trust, you do not just place it in a drawer or safety deposit box and forget it. A trust should be reviewed and if necessary updated whenever there is a significant life change, such as the birth or death of a loved one, a divorce or a remarriage, or even the death of your trustor. All of these life events can impact who inherits from your estate.
3. The trust was never updated to reflect current law. You need to be aware that the laws on trust and estates can change. In fact, your trust may have been drafted under one set of laws, but more importantly, there may be new or updated laws at the time of your passing, which have the potential to invalidate portions of your trust. Your best solution to this problem is to work with your Florida estate planning attorney. She can provide periodic bulletins regarding significant changes in the law, which can alert you to the need to have your trust revised. It is vital that everyone have their trust reviewed periodically by their estate planning attorney to assure that it is supported by current law.
With good planning, trusts can be one of the most useful estate planning instruments. Elder and Estate Planning Attorneys, PA, is a law office small enough to provide personal service but large enough to provide service in Jupiter, as well as Palm Beach, Martin, St. Lucie, and Indian River Counties in Florida. Our law firm will guide you through legal challenges involving elder law, estate planning, trusts, veterans benefits, real estate, and more. We encourage you to contact us and schedule a meeting with our attorneys.