Those who procrastinate estate planning often fail to consider just how many documents are available for them to ensure their estate is handled according to their wishes. As such, many simply create a Will, without considering other available tools. However, one option everyone should consider is a Trust Fund. If you’re unsure why this document is critical or the most common errors you should avoid when establishing one, you’ll want to keep reading. The following blog explores what you should know about this matter, including the importance of working with a Medina County, Ohio Trust preparation lawyer to guide you through this complex process.
What Is a Trust Fund?
A Trust Fund is a type of estate planning document you can utilize to have greater control over how and when your assets are distributed. Though this may seem similar to a Will, the two documents differ greatly.
One of the primary differences is when your Beneficiaries receive the assets left to them. When someone passes away, their Will is validated, goes through Probate, and then is distributed. This means that a considerable inheritance can be left to children or Beneficiaries who may not be financially responsible enough to handle this influx of funds. However, with a Trust Fund, you can establish terms and conditions as to when the Beneficiaries can receive the assets left to them. For example, you may want to leave your grandchild $20,000. However, you may include stipulations that they must first graduate from college or turn 25 before they can access the funds.
Another benefit to establishing a Trust Fund is that it provides significant protection of your assets. When you establish an Irrevocable Trust, the assets held in the Fund are technically no longer part of your estate. As such, they cannot be seized in the event you are sued by creditors, nor are they subject to the often tedious and complex Probate process.
What Errors Are Most Common When Establishing a Trust?
Generally, one of the most common errors people make when creating a Trust is failing to carefully consider who they want to appoint as their Trustee. This entity is critical to your estate, as they are responsible for overseeing, managing, and distributing the assets held in your Trust. As such, it is critical to carefully consider who you wish to fulfil this role, as they should be dedicated, trustworthy, and available to handle such important matters.
In addition, another common error made during this process is choosing the wrong type of Trust Fund. Unfortunately, many people do not realize that there is a wide variety of Trusts, all with different benefits. For example, you may want to establish an Irrevocable Trust, as this will help protect you from creditors. However, if you do not research the different options, you may end up establishing a Spendthrift Trust instead, which can put your assets and Beneficiaries at risk.
Finally, you’ll find that one of the most common and impactful errors you can make is failing to enlist the assistance of an experienced attorney. Establishing a Trust fund is an incredibly complicated and nuanced process, but working with an attorney can help ensure you have explored and understand all of your options. This allows you to make the best decision for your unique circumstances.
If you are ready to create a Trust Fund, do not hesitate to contact the team at Krause Law. We understand how difficult these matters can be to navigate, which is why we will do everything in our power to help you achieve peace of mind when planning for the future. Connect with us today to learn more.
