Many people visit with their attorney, prepare their estate planning documents only to shove them into a drawer and forget about them. Since the trust code changes, the tax code changes, along with fluctuations in family and financial circumstances, prudent measures require a review of your estate plan every so often.

With the arrival of Revocable Living Trusts, it is even more important to ensure that your trust provisions are current. So today I will review what I find to be the twelve most common mistakes lurking in trusts and estate plans:

1.         Estate tax language is nonexistent or out of date. The federal estate tax laws change frequently and are likely to change again in the next few years. Does your trust include current provisions to minimize or eliminate the federal estate tax? If those provisions were drafted before 2001, they are likely out of date.

2.         Does your trust properly provide for the distribution of your Florida homestead? Florida homestead that is deeded to a trust with standard “marital” and “credit shelter” trust provisions may violate Florida’s descent and devise statutes, leading to unanticipated ownership and tax issues.

3.         Durable Powers of Attorney are out of date or not properly drafted. Do you have a current and properly drafted Durable Power of Attorney? Your revocable trust alone cannon solve all problems relating to the need for your signature. On many occasions a Durable Power of Attorney is the only method of acting for an incapacitated person. If your Durable Power of Attorney was drafted several years ago, or if you have moved to a different state since your last one was drafted, chances are it is not current.

4.         Do you have current Health Care Surrogates and Living Wills? The Terri Schiavo situation highlighted the need for current advance directives indicating what you would want to have happen for your care in the event you cannot direct the care due to incapacity.

5.         Do you have a plan to keep your legal documents and advance directives current? Powers of Attorney are notorious for being outdated and useless. You must have a system for making sure they are current.

6.         Do you have a system that will permit you to access your advance directives quickly during an unanticipated crisis? Invariably the health care surrogates and living wills are needed in an emergency and since they are not available, they are often replaced by an inferior version at the hospital.

7.         Does your trust provide an alternative to physician or court determination of your incompetency in order to remove you as trustee? Very often, a federal act known as HIPPA prevents doctors from making such a determination in writing. Consequently, court determination may be necessary.

8.         Does your trust provide for assistance to the Settlor while serving alone as Trustee, in the event a temporary emergency? A “silent partner” trustee may be made available to deal with trust issues that arise while you are hospitalized, ill or simply out of town. To that end, does your trust provide for assistance to the Settlor while serving alone as Trustee, in the event a temporary emergency evolves into a permanent disability, is a “disability trustee” named to provide for the needs of the disabled Settlor?

9.         Does your trust protect your surviving spouse’s interest from creditors and predators? Provisions should be included to allow the surviving spouse access to the deceased Settlor’s estate, while reducing the ability for the rest of the world to access the estate.

10.       Does your trust protect your estate in the event your surviving spouse remarries?  A deceased Settlor’s estate can be controlled and protected even if the surviving Settlor remarries.

11.       Does your trust protect your children’s and grandchildren’s inheritances from financial disasters, such as divorce, bankruptcy or lawsuits, or to minimize estate taxes for future generations? Without the proper provisions in your trust, a beneficiary’s inheritance can be accessed by creditors or inadvertently co-mingled with that beneficiary’s spouse and be subject to additional estate taxes.

12.       Does your estate plan properly maximize tax-deferred growth and protect retirement account assets for your children and future generations? With proper planning, you can ensure the maximum amount to your beneficiaries while protecting against the reach of a divorcing spouse or other predators.

 If any of the above items seems familiar, it is time for a visit to competent estate planning counsel.