Redding, California, Law Blog

Why it’s important to avoid trust funding missteps

On Behalf of | Jan 17, 2019 | Firm News, trusts

Trusts can be tailored to help with a wide range of estate planning goals. However, there are certain mistakes that could compromise this estate planning tool’s ability to serve its intended purposes.

One type of error that can lead to this are missteps in setting up a trust. What terms a trust contains when it is formed can greatly affect what goals it would be able to help with. So, a trust lacking the right terms can cause it to not function as intended.

Another class of mistake that can cause a lot of problems are errors with funding a trust. One common such misstep is failing to put property one wants covered by the trust into the trust. One way this can happen is a person forgetting to take this step with property he or she acquired after he or she formed the trust.

This error can have many implications regarding the piece of property in question, including:

  • It not being covered by the terms of the trust
  • It not falling under the trust’s protection
  • It possibly ending up going to a different person than was intended
  • It having to go into probate upon a person’s death

So, trust funding mistakes can greatly derail a person’s estate planning goals for his or her property.

As this discussion underscores, missteps when it comes to trusts can have massive implications. This is why having the right information and guidance can be so important when setting up and using this estate planning tool.