The intention of a revocable trust is to avoid litigation and conflict upon the death of the trustor or primary beneficiary. Unfortunately, poorly worded or unclear trusts, or contentious beneficiaries can sometimes undo all the good intentions of an estate planner. There are no guarantees, but to avoid potential pitfalls, the estate planner should keep a few things in mind.
- Determine the trustor’s intent. Upon the death of the individual, the primary means of contesting the will or trust will be challenging the intent of the trustor. This is especially true if the individual suffered from any kind of dementia or mental defect. If there is any question of the trustor’s mental status, a doctor’s affidavit should accompany the trust.
- Amend trusts to reflect changes in tax laws. In the current political climate, tax laws and estate laws are changing rapidly, and can affect formulaic bequests (negatively and positively). To ensure the trustor’s intentions are met, keep the trust bequests current with tax laws.
- Include a mediation or arbitration clause in the trust. If the trustor agrees, a clause specifying that disputes must be resolved (or attempted to be resolved) through mediation or binding arbitration can help in preventing future litigation. The majority of disputes involve breakdowns in communication, so professional mediators can be of great assistance in ending arguments.
- Clarify everything. Don’t let legalese obscure the intent of the trustor. If the intent is to remove an individual from the trust, or to fund certain properties, the trust should say so as clearly as possible. The clearer the language, the clearer the testor’s wishes will be when the trust or will is finally read.
The estate planner needs to think of all these things ahead of time, because the trustor and the family and other beneficiaries won’t, until after the shouting begins in court. By writing clearly and keeping abreast of changes to tax and other requirements, much difficulty can be prevented in the future.