Do you have trust issues? If you've established a trust as part of your estate plan, the answer may be yes — and you might be unaware of those issues. Fortunately, getting your trust back on track can be straightforward. Here are three areas to review.
- Funding. Setting up legal documents to establish a trust is only part of the process. You also need to add property to your trust, known as "funding" the trust. Funding allows your trust to function so you can achieve your goals, and can involve legally retitling assets into your trust’s name. As part of your update, review the assets you used to fund your trust and make sure they are properly identified and that any tax issues have been considered.
- Trustee. The trustee is the individual or entity who manages your trust. Depending on the type of trust, you may initially choose to serve as the trustee. Later, you might decide to appoint a family member, or a professional, such as a bank officer or a lawyer. You can also choose to have more than one trustee. Because managing a trust can involve a lot of responsibility, periodically reconfirm that the person you have asked to serve wishes to continue doing so. If you are paying a professional trustee, assess the value you are receiving for the fees being charged. Take time to talk to your successor trustee periodically as well, as that person will have to assume trustee responsibilities in case your original choice is unable to.
- Beneficiaries. The beneficiaries are the recipients of the trust assets. Reasons to update your beneficiaries include changes in marital status, the death of a beneficiary, or the establishment of a different type of trust for a beneficiary, such as a special needs trust.
Reviewing and updating established trusts is a vital aspect of estate planning. As part of your financial team, we're here to help. Contact us for assistance.
Ong & Company is a professional accounting, tax, and advisory services firm. Our team of CPAs specialize in helping small businesses and individuals minimize tax expenses and maximize after-tax income. Headquartered in Corporate Woods in Overland Park, Kansas, we serve clients across the United States.