Parents should avoid the following mistakes when creating a trust for their children.
As a parent, creating a trust for your children can be one of the best ways to ensure they are cared for in the future. However, trusts can be complicated tools, and mistakes can be made if you are not carefully combing through every detail. Whether you are a new parent or your children are grown, you want to make sure you have the proper measures in place to protect your children’s inheritance. When you plan your estate and trusts with your Millman Law Group attorney, your attorney can help you avoid the following mistakes that can upset your plans for your children.
Appointing the Wrong Trustee
A trustee must protect and grow the trust assets in addition to administering the trust according to the terms of the trust agreement. You may have someone in mind to act as trustee for your trust, perhaps another family member or a close friend. However, this person likely has no experience with trust administration. You may consider appointing a professional trustee, such as an attorney, to play an impartial role in administering your child’s trust.
Not Allowing the Trustee Enough Discretion
Planning your estate can feel like you are trying to see the future and determine what your child needs. This can be tricky, and when creating a trust, you must consider several potential factors. This is why you should appoint a trustee capable of flexibility when navigating unforeseen circumstances. If you don’t give your trustee enough discretion to adapt to unexpected circumstances, your kids may be unable to access the assets in the trust when they most need them.
Allowing the Trustee Too Much Discretion
However, giving a trustee too much power can also pose a problem, especially if you are not using a professional. Imagine a scenario where your child asks the trustee for funds from the trust, but the trustee doesn’t believe those funds are necessary. This can create conflict between the parties and create further problems in the future. To keep the peace and assert some control, you can put rules within the trust that are clearer about how assets or funds are distributed.
Failing to Stagger Trust Distributions
Trust funds can be safety nets for your kids, especially if they are too young to inherit your estate directly. However, instead of dropping a huge sum of money into your children’s laps when they are young adults, consider creating a timeline for distribution. Staggering distribution allows the children to learn how to manage their money and prevents them from spending too much or mishandling one giant lump sum.
Forgetting to Update Your Trust
As with most estate planning, creating a trust should not be a “set it and forget it” deal. As your trust’s value grows over time, the original plan may need reconsidering. Revisiting your trust every few years is an effective way to ensure it still reflects your wishes and evolves to meet your family’s changing circumstances.
Estate Planning Made Easy With Millman Law Group
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs Trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.