What are the 10 most common mistakes people make with their living trusts in California? What everyone should know that has a trust!

(Not in any order)

1. Failure to benefit the beneficiaries

  • Law states – beneficiary under the age of 18 cannot inherit -- beneficiary receives everything at age 18
  • Beneficiaries that are not mature enough to handle the money
  • Beneficiaries with life management problems – drugs, poor work ethics, poor selection of spouse

2. Failure to establish special needs trust

3. Failure to properly select a successor trustees

4. Failure to change trust when circumstances have changed

  • Divorce, marriage
  • Death of a beneficiary or change in relationship
  • Death, incapacity or change in relationship with a successor trustee
  • Acquired new assets – real estate, business interests (subchapter S)
  • Law changes—ex. American Taxpayer Relief Act of 2012

5. Failure to properly fund the trust or failure to re-designate the title of their residence and real estate after refinancing

6. Failure to properly designate the beneficiary of assets with their trust especially failure to coordinate their individual retirement accounts and 401(k)s with trust

7. Failure to properly plan to protect proposition 13 (property tax reassessment)

8. Failure to properly designate personal items

9. Failure to have necessary companion documents – pour over will, financial powers of attorneys, advance medical directive, HIPAA authorization

10. Failure to prepare a trust

If your trust is not up to date and clearly expresses your intentions it could easily be argued that having a poorly drafted trust is worse than having no trust at all.  If you have a trust and you want to make sure it is up to date, call 714 459-5481 or e-mails to schedule an appointment.  We will review it for free!!!

James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm