New Jersey residents who wish to set up a trust to administer their estate after their passing may wish to review some of the common errors made by benefactors. A trust can be a powerful tool for settling an estate, sparing the family the costs of probate and the publicity that comes with it. However, if it is improperly set up or mismanaged, there can be serious consequences to the estate.
In order to function, a revocable trust must be funded. That means that all relevant accounts must be retitled into the trust's name. It can also be helpful to include provisions in the will that places all additional assets, such as a car or jewelry, into the trust at the time of death.
It can be helpful to consistently review the trust, as changing life circumstances may cause certain provisions to become obsolete. The new situations may come from inside the family, as in the case of a bequest meant for the maintenance of a child who has since reached the age of majority, or they may come from outside. The federal estate-tax exclusion amount has changed multiple times in the recent past. It can be beneficial to find a trustworthy and responsible trustee to handle these and other matters.
The pitfalls of estate planning may be less than obvious to people who only deal with the probate system on an occasional basis. The advice of an attorney with experience in matters relating to wills and trusts may translate to sizable savings in probate court costs, possible prevention of adverse outcomes in the administration of the trust and a more appropriate execution of the last wishes of the deceased.
Source: CNBC, "Trust bust: Steer clear of the 8 biggest estate-planning mistakes", Barry Glassman, Jan. 12, 2015