The number one reason that trusts fail is due to funding. In a previous video, we discussed the importance of funding into a trust. If you create a trust to avoid probate but you do not transfer assets into the trust and transfer your real estate, investment accounts, and checking accounts – your family will ultimately require probate to distribute your assets.
We understand that the funding process is daunting and overwhelming. Therefore, as a part of our services, we take an in-depth look at your assets and walk you through the process step by step to ensure that you and your family are equipped with the right tools so your trust can uphold its intended purpose.
Another reason so many trusts fail is because either the client does not work with an attorney to create the plan, or works with an attorney who doesn’t keep in touch with the client over time.
The reason this matters is because your life is going to change over time and the law is going to change over time. If your plan is created and then placed on a shelf and no one looks at it until it is needed in 30 years time, someone’s going to open the binder, brush off the dust, and then realize that your life at that time bears no resemblance to the life described in the document which was created 30 years earlier. That results in a failed estate plan.
Equally, changes in law can prevent a plan from achieving your objectives. An example of this is that a couple of years ago new laws were introduced that significantly impacted the taxation of inherited retirement accounts. We wrote to all of our clients to inform them about these changes, and when necessary, schedule appointments to review their plans in light of the new laws.
It’s therefore critical to have an ongoing relationship with your attorney over the long term. Even if there are no changes in law, we meet with you at least every three years to make sure that your plan is staying up-to-date.
Contact a San Diego trusts attorney for more information.
