Family trusts are great tools for making sure that assets can be fairly shared and enjoyed by various members of a family, which is a wonderful thing as long as it all goes smoothly. Unfortunately, while the legal concepts that support family trusts are sound, all such trusts inevitably involve several fallible human beings, which can always complicate matters. If you are considering using a family trust, make sure you understand how many conflicts can arise.
The most common issue presented by family trusts are the very reason for using them in the first place — family. Even with the best of intentions, human beings have an impressive and infuriating ability to complicate anything where money or property of value are concerned. One way to mitigate these risks as the creator of a family trust is create failsafes to ensure that you can resolve conflicts even if some people can’t seem to agree.
Similarly, a trust is only as effective as it is error-free. In an ideal world, estate planning documents would all be bulletproof, but that is simply not the truth of the matter. In reality, estate planning documents require a great deal of attention to identify any mistakes or omissions that might cause problems later on. If you plan to create a daily trust, be sure to invest the time and resources to make sure it is error-free.
If you’re ready to create a family trust to benefit your family, be sure to seek out the help you need to deal with these risks before they become real problems that may severely harm your most precious relationships.
Source: Findlaw, “3 Problems With Family Trusts,” accessed Aug. 04, 2017