Six Claims You Should Be Wary of Regarding Living Trusts
by
Daniel K. Printz on Jun. 14, 2012
Estate Estate Planning Estate Trusts Estate Wills & Probate
Summary: Clients should enter the estate planning arena with as much information as possible, and not from a point of view of fear. Here are six claims to be wary of regarding living trusts.
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1. False Claims About the Probate Process.
Some companies use advertising slogans such as “The Choice is Yours: Sacrifice Money to the State or Protect Your Loved Ones.” These companies may exaggerate the costs and hassles of probate. In fact, you may be able to avoid probate in ways other than by a Trust.2
2. False Claims About Tax Benefits.
Beware advertisements about the tax benefits of living trusts. The truth is that a simple living trust (as opposed to a more expensive and complicated tax-saving living trust) has no effect on taxes.3
3. False Claims That Living Trusts Will Shelter You From Creditors.
A living trust will not automatically protect your assets and property from creditors. For it to shelter your assets, it must be irrevocable - which would prevent you from accessing the property yourself!4
4. False Claims About the Cost of Setting Up A Living Trust.
Living trusts can be expensive. Lawyers often charge five or six times the cost of a will. Depending on the size of your estate, the costs of a living trust may be much higher than the cost of probate.5
5. False Claims About How Quickly They Can Set Up Your Trust.
It can take a lot of time to set up a trust properly. Most important, writing up the document is not enough. The trust will not be valid until property is transferred from your name to the trust. This is called “funding the trust.”6
6. False Claims That You Don’t Need a Will If You Have A Trust.
It’s always a good idea to have a will, even if you have a trust. In addition to nominating guardians for minor children, a will is where you provide instructions for distribution of assets that don't make it into your trust.