Trusts That Are Not Trustworthy
Did you know that thousands of Minnesotans have Trusts that are ticking time bombs for their families?
It's true. Let me give you an example.
Many Trusts Need Fixing
Mom and Dad may have set up a Trust in the 1990s and thought everything was taken care of for their children or grandchildren. Mom and Dad have always told the kids that the Trust will take care of everything and they won't have to worry about probate or other matters. The sad thing for many families is that issues with the trust may not be discovered until Mom or Dad passes away, which could be too late to get the Trust fixed.
Here are some of the typical problems that can arise. These issues should be addressed while Mom and Dad are mentally and physically able to make changes to the Trust.
- The Trust Does Not Avoid Probate-One of the major purposes of a Trust is to avoid the probate process. However, if the title ownership is not placed in the trust, a probate proceeding will be necessary to move the property into the trust.
- The Trust Does Not Handle Disability Issues-Most Trusts deal with how assets are distributed at the time of death of the trust maker. However, people are six times more likely to become disabled than die in any given year. As a matter of fact, we will all be disabled sometime in our lives, whether it is the last twenty minutes, or the last twenty years of life. Many trusts do not plan for the disability of the trust maker. And even if it does acknowledge potential disability, many Trusts don't define levels of disability. Or, the trust may lack what procedures will be done for the fast and orderly appointment of a new trustee to take over the job of managing the trust.
- Conditions Have Changed-What you may have wanted in your estate plan for your children in the 1990s may not be the same as you want today. Some things your kids have done may have pleasantly surprised you...or may have disappointed you. What's more, state and federal laws that affect estate plans are different than what they were several years ago. Your Trust should be revisited and renewed every three to five years to be sure it will accomplish what you intended.
- The Trust Is Poorly Designed-Some Trusts were not well drafted from the beginning. If the Trust was not properly written to take care of your family five years ago, it won't get better with time. Now is the time to update the Trust to work as hard for you...as you worked for the assets in the Trust. If you wait too long, death or disability may prevent you from fixing the Trust.
We've worked with hundreds of clients to prepare or revise their Trusts or other estate plans to accomplish the best results for their families. We offer a free, no-obligation analysis of your Trust or estate plan, for your future and that of your family.
Bill Peterson is a Minnesota Estate Planning Attorney with over 40 years of experience as a lawyer. He can help you plan for the future by creating a Minnesota Estate Plan. For more information, please visit http://www.mnestateplan.com or call toll free at 952-641-7312.
The contents of this article are for information only and is not to be interpreted as legal advice. For personal legal advice you should consult with an attorney who is experienced in probate law or estate planning.