Do you know whether your trusts are properly funded? For many Massachusetts residents, wills and trusts make up a significant part of their existing estate plan — but trusts that are not properly structured can cause more headaches than they are worth. Experts say that even the most expertly drafted trusts can cause problems for beneficiaries if the trusts are not funded appropriately during the benefactor’s lifetime. Here’s how to avoid those pitfalls.
What is the ideal situation for my trusts? You want your trusts and other estate planning tools to quickly and efficiently roll over your assets to your recipients. You do not want any conflicting documents that confuse executors about your intentions for your holdings or other elements of your estate. Ultimately, you want the process of executing your will to be quick and easy.
How can I make sure that happens? First, you need to make sure that you do not have conflicting designations such as named beneficiaries or joint owners of property. These types of designations can cause problems if you have already listed other people as recipients of your property through a trust mechanism. Further, you need to make sure that the assets in your trust are properly titled, which ensures that they move seamlessly from one owner to the next.
What else should I be aware of? Be sure that your attorney and financial professionals are advising you about re-titling assets into the name of either the trustee or the trust itself. Failing to keep these designations in order can create great confusion and lead to legal woes for those who will be receiving your property. Avoid probate issues and related concerns by seeking help from a qualified legal team.
Source: Florida Today, “Improperly funded trusts can be very costly,” Stephen Lacey and Brooke M. Benzio, May 15, 2017