Tuesday, October 3, 2023

Legal Talk: Common Problems in Using Trusts in Estate Planning

Robert S. Morris

By Robert S. Morris

Trust, in particular the revocable living trust, has become a staple of estate planning. However, there are three common problems that come up on a regular basis that defeat the usefulness of the trust.

First, is failure to fund the trust. A trust acts on property owned by the trust. For example if a married couple creates a joint revocable living trust and then buys a house in their individual names the trust will not pass ownership on death and it may be necessary to probate a will.  If avoiding probate was a primary purpose of the trust, that purpose was defeated by failure to deed the house to the trustees of the trust.

Second, the successor trustees and beneficiaries of a trust need to know the terms of the trust. The best way for this to happen is for them to have a copy of the trust document. If a house has been conveyed to the trustees of a trust, but no one can find the trust document then we won’t know who are the successor trustees or beneficiaries of the trust. This may result in having to go the court to resolve the issue.

Third, once ownership of property is transferred to the trustees of a trust, it is necessary to deal with that property in the capacity of a trustee. Once a husband and wife deed their home to themselves in their capacity as trustees, then any future action with property needs to be done as trustees. They can’t just go back to dealing with the property as individuals.

Trusts can be very helpful if used properly. Always get legal advice.

Robert Morris is an Elder Law, Estate Planning, Guardianship and Medicaid Attorney at Hammerle Finley Law Firm.  Hammerle Finley Law Firm…Give us a call. We can help.


Call Hammerle Finley Law Firm at 972-784-0293 for help.  The information contained in this article is general information only and does not constitute legal advice. ©2018

CTG Staff
CTG Staff
The Cross Timbers Gazette News Department

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