It’s a common misconception that, once a trust has been executed, no further action should be taken. However, even simple slip-ups could result in assets bypassing the trust and ending up in probate. Since probate avoidance is likely a key reason that you executed your plan in the first place, knowing the critical steps you should take to maintain the effectiveness of your trust is essential.
Here are some tips to create a mistake-proof trust and put your mind at ease.
When you meet with an attorney or their paralegal, they will provide you will an overview of how to properly fund the trust. A trust is like an empty bucket. Unless you fill the bucket up, an empty bucket will do you no good when it comes to avoiding probate.
What does it mean to fund a trust? In order to fill the bucket, you will need to tie your assets into your plan. This can be done by retitling assets, assigning ownership rights and designating the trust as a beneficiary. However, because laws vary in every state, it may be wise to consult with an attorney if you have questions or concerns about tying assets to the trust.
If you purchased a car in 1998, you likely don’t expect the car to run as well as it did in 2018 – if it makes it that far. A trust, like a car, requires maintenance to keep it functioning as intended. Estate planning attorneys recommend reviewing the plan and your assets yearly. You may have had a significant life event in your family such a birth, death or divorce that could affect your plan. In addition, there may have been changes in the law that necessitate an update.
In summary, your work does not end once you leave your attorney’s office. It’s likely that estate planning isn’t always at the forefront of your mind, and it doesn’t have to be. But taking the proper steps accordingly can ensure that your wishes will be followed and ease the burden on your loved ones after your passing.