You’ve done your homework, you shopped around, you met with an attorney several times and you finally have a set of signed documents. It is most unfortunate that you wasted a sum of money, probably in the thousands of dollars for these documents, because they may not be working for you. We have seen dozens of clients who come to consult with us that have trusts that are either inappropriate for their needs, not properly funded with their assets or do not convey the client’s intentions. Some trusts are a combination of these problems. So let’s explore some of these common problems with trusts and what you, as the consumer, can do to avoid these pitfalls:
- Revocable Trust: One of the biggest problems we see are clients with revocable trusts that do not really need them or know why they have them. A revocable trust accomplishes NOTHING if you are interested in protecting your assets. Let me repeat that, a revocable trust does NOTHING to protect your assets from your long-term health care expenses. Many attorneys push revocable trusts on clients to avoid the process known as probate, which the attorneys advertise as expensive, scary and time-consuming. On the contrary, the probate process in New York is rather straightforward, and depending on your level of assets, not nearly as expensive as an improperly established and maintained revocable trust. There are certain times when a revocable trust would be useful, particularly for people who only have distant relatives and no immediate family and in instances where a probate contest is likely based on prior acrimony. We find that for most clients, the revocable trust is not the best vehicle to accomplish their goals and limit their future exposure to expenses.
- Trust Not Funded: The biggest problem for people with trusts in existence today is that the trusts do not own what they are supposed to own. In New York, if you want the terms of your trust to direct what happens to a particular asset, that asset needs to be presently titled to the trust. If I have a savings account and I want that money to be administered after my death according to the terms of my trust, I need to retitle that account into the name of my trust. Many attorneys do not assist clients with this aspect of trust administration. We spend the most time helping clients fund their trusts and make sure that everything they want the trust to own has been retitled properly.
- Doesn’t Say What You Want: The worst thing that can happen is you pay thousands of dollars for a trust that doesn’t convey your true intentions. Part of the problem usually is that either the attorney who prepared the trust did not spend enough time with you to figure out what you really want, or, you told them what you really want and they just used their standard and form language because it is easier for them to produce documents that way. This is where a commitment to client service makes a huge difference. I don’t want to put people into a trust that they (a) don’t totally understand and (b) don’t like because it doesn’t convey their intentions and goals appropriately. I spend a lot of time with clients figuring out what they want the end product to look like, and then we customize each individual trust to fit those goals and needs.
I hope you have not wasted any money purchasing a trust that does not work for you. Perhaps you have a revocable trust and don’t really need one, maybe your trust is not funded correctly or at all, or it does not say what you want it to say. In any event, we enjoy working with people to correct these issues and to modify your existing trust or create a new trust that works best for you.