The Most Common Mistakes Made When Creating Trusts
As you create your trust, you should be mindful of some common mistakes that could either invalidate the trust or interfere with its effectiveness. The following are a few of the most common mistakes people make when creating a trust:
- Lack of intent: You must demonstrate your intent to create the trust for the mechanism to be valid. The general standard is that you must be able to prove you intended to grant the property to the trust. For a living trust, this standard gets even more specific — you must show you intended the specific piece of property to be used in a living trust.
- Lack of trust funding: No trust can be created until the property changes hands from the owner to the trust. A failure to place assets in the trust will result in a failure of the trust.
- Failure to name specific beneficiaries: Trusts are always created for the interest of a third party. The grantor must identify a person or people to whom the assets and benefits of the trusts will be given. Without a named beneficiary, the court and trustee cannot oversee the trust, and it would be considered invalid. Any valid trust must have identifiable beneficiaries, terms of the trust and duties owed to the beneficiaries by the trustee.
- Failure to write the terms of the trust: A verbal agreement may be enough to create some trusts, If you want to use a trust for estate planning in Florida, it must be in writing and signed with the same formalities as for a will for it to validly pass property to ;your beneficiaries after your death. The terms of the trust should be written in plain language and with as much detail and clarity as possible.
For more information on creating a trust that is legally sound and completely valid, work with a knowledgeable Tampa estate planning attorney at BaumannKangas Estate Law.