Are you considering adding a trust to your estate plan, but not sure what a trust can do? A trust is an estate planning tool into which you place your assets. These assets are then managed by a trustee selected by you for the benefit of the trust’s beneficiaries. There are two essential elements to a trust. The first is the trust itself, which is created through a legal document. This document identifies the purpose of the trust, the trustee of the trust and his or her powers, the beneficiaries of the trust, and the requirements for distributing the trust assets to the beneficiaries. The “corpus” of the trust is the second element of the trust. The corpus is the sum of money or property placed into the trust. Unfortunately, not all trusts are properly set up and end up failing.
Do you have any idea what the main reason is that many trusts fail? You will be surprised! Most trusts actually fail due to inadequate funding. In fact, many people go through the process of hiring an attorney to set up their trust, but then they neglect to follow through on all the necessary next steps that must be taken to fund the trust after the trust is created.
By adding a trust to your estate plan in order to obtain the benefits associated with utilizing a trust, including avoiding probate and simplifying the administration of your estate, you need to be sure that all of your assets are placed into your trust. You may need to include retitling your current assets in the name of your trust and remembering to add any assets that are acquired later to the trust in the future. Remember, if you fail to do so and some of your assets are left outside your trust, then your estate will probably need to be probated and your plan to avoid probate through the use of your trust will not work.
Finally, we recommend you work with an experienced Wisconsin estate planning attorney. He will not only help you establish your trust, but will help you understand how to properly fund your trust so that your trust will successfully meet and satisfy your estate planning goals.
We know this article may raise more questions than it answers. We want to help you create the trust you want and need. We encourage you to contact us and schedule a meeting with attorney Alan Hougum today.