A living trust is one of the most effective tools for avoiding probate and ensuring your
wishes are carried out smoothly. However, many people make critical mistakes when
creating a trust (often without realizing it). These errors can undermine the very benefits
a trust is supposed to provide. Below are some of the most common mistakes and how
to avoid them.
1. Creating the Trust but Not Funding It
This is by far the most common and costly mistake. A living trust only controls assets
that are actually transferred into it. If your home, bank accounts, or investment accounts
are not properly titled in the name of the trust, those assets may still have to go through
probate. Simply signing the trust document is not enough—funding the trust is essential.
2. Using DIY or Online Trust Forms
Online trust templates may seem convenient and inexpensive, but they often fail to
account for state-specific laws, unique family circumstances, or complex assets. Many
trusts created this way contain vague language, improper provisions, or outright errors
that lead to disputes or court involvement later. Fixing a poorly drafted trust usually
costs far more than doing it correctly from the start.
3. Failing to Update the Trust
Life changes—marriage, divorce, births, deaths, changes in assets, or changes in the
law—should trigger a review of your trust. An outdated trust can leave out new
beneficiaries, name inappropriate trustees, or distribute assets in ways you no longer
intend. A trust should be reviewed periodically to ensure it still reflects your wishes.
4. Choosing the Wrong Trustee
Selecting a trustee based solely on family relationships rather than ability is another
common mistake. A trustee must manage assets, follow legal duties, keep records, and
communicate with beneficiaries. Choosing someone who lacks organization, financial
skills, or neutrality can lead to conflict and even litigation.
5. Forgetting About Incapacity Planning
Many people focus only on what happens after death and overlook incapacity planning.
A well-designed living trust should include clear instructions for who manages your
affairs if you become incapacitated. Failing to plan for this can result in court-ordered
conservatorship—exactly what most people want to avoid.
6. Assuming a Trust Covers Everything
A living trust is only one part of a complete estate plan. Powers of attorney, healthcare
directives, and beneficiary designations all play critical roles. Relying on a trust alone
without coordinating these documents can create gaps and confusion.
The bottom line: A living trust can be a powerful tool… but only if it’s properly drafted,
funded, and maintained. Working with an experienced estate planning attorney helps
ensure your trust actually does what you intend and protects your family from
unnecessary stress and expense.