What are common mistakes people make with trusts?


Editorial team Published on

Failing to fund the trust by retitling assets into its name is the most common and costly mistake people make.

šŸ›‘ Failing to Fund the Trust

  • The Issue: Leaving real estate or bank accounts in your personal name.
  • The Consequence: Assets still go through expensive, public probate court.
  • The Fix: Re-title deeds, bank accounts, and investments to the trust.

āš ļø Choosing the Wrong Trustee

  • The Issue: Appointing family members based solely on relation rather than skill.
  • The Consequence: Leads to mismanagement, missed paperwork, or intense family fights.
  • The Fix: Pick a detail-oriented person or hire a professional fiduciary.

šŸ—“ļø Neglecting Regular Updates

  • The Issue: Forgetting to modify the trust after major life changes.
  • The Consequence: Ex-spouses or deceased individuals might remain listed as beneficiaries.
  • The Fix: Review the documents every three to five years.

šŸ’” Relying on DIY Templates

  • The Issue: Using generic online forms to save money upfront.
  • The Consequence: Vague wording can invalidate the trust or break local state laws.
  • The Fix: Hire an estate attorney to draft legally sound provisions.

šŸ“Š Ignoring Incapacity Planning

  • The Issue: Designing the trust strictly for distribution after death.
  • The Consequence: Leaves no clear framework if you fall ill or lose mental clarity.
  • The Fix: Explicitly name a successor trustee to manage ongoing lifetime care.