Few people expect to need legal expertise until, one day, they do. In many cases, this need arises after a death in the family, and surviving relatives need to manage the affairs of the deceased: namely, their property and other assets. This is where the aid of a trust and estate lawyer can be helpful: an objective third party who can help manage the estate and assets.
Such a lawyer will have years of understanding state laws in order to navigate the process as smoothly as possible. However, one common mistake people make is thinking they can take care of everything themselves by Googling the information they need. The truth is, without consulting a lawyer, it’s easy to miss steps or misunderstand what is required, resulting in costly delays.
Many trust accounts and estates have a great deal of paperwork that is difficult for laypeople to understand if they haven’t had the right educational background. Read on to learn more about some of the common errors that can happen without consulting a trust lawyer.
Understanding What Trust Lawyers Do
First things first, let’s understand what the specialties of trust attorneys are.
Trust lawyers specialize in the following:
Living Trusts
A living trust is when assets are placed in a trust, or special account, that you have complete control of during your lifetime. The assets contained in the trust do not have to go through probate or courts to establish ownership and distribution after your passing. A legally appointed “co-trustee” (typically spouse, but could be another relative) is responsible for distributing the assets according to the terms of the trust.
The role of a trust lawyer can help ensure that the beneficiaries of the trust receive their assets on time, avoiding further legal expenses. While these expenses are part of the process either way, they are far less than what a probate proceeding would cost.
Testamentary Trusts
Unlike living trusts, testamentary trusts are subject to probate. This is because they are established as part of a last will, so they take a bit longer to come into effect. Testamentary trusts also lack the privacy of a living trust, in which the details are known only to the beneficiaries and their legal counsel. The content and distribution of the assets are made public, since the will is also public.
These trusts, however, tend to be less costly and require less paperwork to create, which makes them a more appealing option to many.
Common Mistakes People Make Without Consulting A Trust Lawyer
Now that we understand what trust lawyers do, let’s take a look at a few mistakes that laypeople make when they try to take on their duties.
They Wait Too Long To Start Estate Planning
It’s not savory to contemplate one’s natural end, but the trust is that it’s never too early to start thinking of what will happen to your assets after your death. Failure to plan ahead of time could result in lost control over assets as well as health decisions. This means that the courts decide the outcome, which is costly and high in taxes. Not having a plan means that the state decides what happens to your assets, which may or may not align with your wishes.
They Rely On DIY Online Trust Forms
DIY, or “do it yourself,” is great for many things to save money, but estate planning is not one of them. You’ll want to ensure that this process is done “by the book,” with no corners cut, and no stone unturned. Only a legal expert can ensure that everything is done properly.
They Fail To Consider Tax Implications
Though it could be due to a genuine oversight, ignoring tax implications when it comes to estate planning can have dire financial consequences. For example, estate and inheritance taxes can take a larger portion of the estate than you realize. Federal taxes often reach 40% on estates, which is more than the exemption from the federal government.
Another issue is called forced sale of assets, in which beneficiaries may have to sell valuable assets to cover accounts that have not been taxed. This can compound grief during an already difficult time.
To address federal, state, income, and inheritance taxes properly, we advise seeking help from a trust lawyer.
They Forget To Fund the Trust
The very purpose of a trust is money, and thus it requires regular funding. Assets outside of the trust may be subject to probate and delays in distribution, which can be costly to your descendants and lead to disputes within the family.
They Overlook Beneficiary Updates
You may decide to leave your assets to your children or grandchildren, but fail to consider important life updates, such as divorce or remarriage, among them. This is why regular reviews are necessary: dissolving a legal marriage does not automatically update the designation of your assets in your will, your life insurance policies, etc.
They Don’t Coordinate With Other Legal Documents
Other existing documents, such as wills and trusts or property titles, can have conflicting legal instructions from estate planning documents. This can, understandably, lead to conflict and confusion over which document has legal primacy over the others. A trust lawyer can read the fine print with a trained eye to ensure there is no confusion or conflict with each legal document.
A Trusted Trust Lawyer In Coral Springs
A well-respected law firm with decades of experience, Gary I. Handin, PA, is known for providing excellent legal services to Broward County residents. With compassionate and well-trained staff, we are here to assist you through a variety of circumstances: from starting a business, buying or selling a house, to creating a living will, offering title insurance services, and more. We have offered our services to local banks, mortgage companies, and businesses big and small. Whatever your legal need, we have the knowledge and experience to help.
For a consultation, call today at 954-796-9600.
