• Skip to primary navigation
  • Skip to main content

The Hayes Law Firm

Estate and Elder Law Information Center

  • (626) 403-2292
  • Attend a Free Webinar
  • Home
  • Our Firm
    • About Our Firm
    • Virtual Estate Planning
    • About The American Academy
    • Advantages of Working With Our Firm
    • Attorney and Staff Profiles
    • Speaker Connection
    • Multi-Media
    • Reviews
    • College Internship Program (Marketing)
  • Estate Planning
    • Asset Protection & Business Planning
    • Estate and Gift Taxes: Figures
    • Family-Owned Businesses
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ+ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
  • Probate Process
    • CA Probate & Estate Planning Savings Calculator
    • California Probate Process
    • Common Probate Questions
    • Probate Resources
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • The Mourner’s Bill of Rights
      • Trust Administration & Probate Definitions
      • When a Loved One Passes Away With a Trust
      • When a Loved One Passes Away With a Will
    • Why Hire a Probate Attorney?
  • Trust Administration
    • Trust Administration Resources
    • Trust Administration Assistance
  • Resources
    • Feature Articles by The Hayes Law Firm
    • DocuBank
    • COVID-19 Estate Planning Resources
    • Educational Heroes
    • Elder Law Reports
    • Estate Planning Resources
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Articles
      • Estate Planning Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Frequently Asked Questions
      • Estate Planning FAQ’s
      • FAQ’s for Families Without an Estate Plan
      • Legacy Wealth Planning FAQ’s
      • LGBTQ Estate Planning FAQ’s
      • Trust Administration & Probate FAQ’s
    • LGBTQ+ Resources
    • Newsletters
    • Special Needs Resources
  • Elder Law
    • Are You A Caregiver for a disabled loved one?
    • Coping With Alzheimer’s
    • Emergency Medi-Cal & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medi-Cal Planning
    • Veteran’s Benefits
  • Seminars and Webinars
  • Contact Us
    • Preparing for Your Initial Consultation
  • Blog

Don’t Make These Trust Errors

William Hayes · Jul 28, 2020 ·

Trusts can be used as an asset protection tool and to help your beneficiaries avoid the cost and expense of probate. Trusts transfer legal ownership of assets to a trustee. The property is deeded in the name of the trust and the trustee is tasked with administering it as the grantor specifies. There may be more strings attached to an asset in a trust than if it were simply left to someone in a will. Don’t make these trust errors!

While a trust is a fairly straightforward instrument, simple mistakes can

 

interfere with and invalidate what would otherwise be a straightforward transfer of property. Let’s take a look at the common trust errors people can make when creating a trust.

  1. You may fail to show intent to create a trust. This is quite important in the creation of a trust. American courts are very protective of individual property rights. The intent standard for a trust conveyance is much the same as if the property were being gifted: The individual granting the property must show that making such a grant was intentional. Without this, no trust can be considered valid.
  2. You may fail to sufficiently fund the trust. No trust can be created unless the property changes hands. Failure to deliver the property or to place an adequate item or sum in trust will result in the trust failing. Funding problems may be due to the granting party not making delivery or placing in trust some future property interest that cannot be tied to any current property in a way that proves its viability.
  3. You may fail to instruct beyond precatory language. Precatory language expresses a wish or desire but doesn’t create a legal obligation. Your trust document needs to contain some language that indicates that you’re creating a legally binding obligation.
  4. You may fail to name beneficiaries. Trusts are created for the benefit of a specific, third-party interest. A person or group of persons must be named as beneficiaries. Viable trusts name beneficiaries and set out the terms for the trust and the duties the trustee owes to the beneficiaries.
  5. You may fail to put the trust in writing. Where a trust involves a grant of real estate or is created through the execution of a will, the trust must appear in writing to be considered valid. An oral arrangement made with family or close friends will never see the inside of a courtroom.

Overall, you may perceive an even more basic problem: the cost necessary to establish a trust and to create a pour-over will that deposits any remaining assets into the trust at the end of the testator’s lifetime. Administering the trust also may add expense—the trustee may have to retitle documents or add new filings to transfer ownership to the trust. But these expenses should be compared to the costs of probate and paying fees to the estate executor that often equal a significant share of the probate estate.

Another possible problem involves interpersonal issues that may arise between the beneficiaries and the trustee if the beneficiaries resent the trustee’s role or believe that he or she is not acting in their best interests.

It’s key to remember, however, that you can overcome any of these trust errors by setting up a trust with forethought and professional assistance.

Interested in learning more? Join us for a free Estate Planning Seminar. Sign up today!


This website is not intended to be a source of solicitation or legal advice. General information is made available for educational purposes only. The information on this blog is not an invitation for an attorney-client relationship, and website should not be used to substitute for obtaining legal advice from a licensed professional attorney in your state. Please call us at (626) 403-2292 if you wish to schedule an appointment for a legal consultation.

For more information about The Hayes Law Firm, visit our Google My Business page.
  • Author
  • Recent Posts
William Hayes
William Hayes
As an attorney in private practice in Los Angeles County, California William Hayes provides extensive estate and tax planning services to individuals and businesses in Los Angeles, Pasadena, Glendale, Burbank and surrounding communities. Attorney Hayes’ primary focus is to help clients avoid probate, protect their assets, and provide for the security of their loved ones with a well-crafted estate plan. He believes in giving each client the time needed to explain his or her needs and wishes and then dedicates his efforts toward making the client’s desires clear in their final estate plan.
William Hayes
Latest posts by William Hayes (see all)
  • Travel Tips for Senior Citizens - May 23, 2022
  • Trusts for Those With Addiction Problems - May 22, 2022
  • What to Know About Credit Scores - May 9, 2022

Blog Subscription

Sign up for our newsletter and get our news straight to your inbox!

Stay Informed

Where we are

The Hayes Law Firm
729 Mission St. #300
South Pasadena, CA 91030
Phone: (626) 403-2292
Fax: (626) 403-2299
Proud Memberaaepa

Office hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 5:00 PM

Map

map
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter
  • YouTube

The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

© 2022 · American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy | Sitemap | Contact Us