SOME COMMON MISUNDERSTANDINGS REGARDING LIVING TRUSTS
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Originally Posted On: http://smartestateplans.com/common-misunderstandings-regarding-living-trusts/
SOME COMMON MISUNDERSTANDINGS REGARDING LIVING TRUSTS:
1. “They cost too much.” A properly written and legally enforceable living trust typically has a higher initial price tag than what a will does. But, when you take into consideration the privacy, legally enforceable provisions that will protect your assets, and expeditiousness with regard to taking decisive action to safeguarding your interests, a living trust is a very worthwhile investment. In addition, living trusts address such contingencies as making arrangements to care for your (or your spouse) should you become incapacitated, the rights and duties of the acting trustee with protecting your real and personal property (if you’re unable to), and in carrying out your detailed instructions for the dispersal of your estate to your loved ones upon your death. Once more, living trusts are invaluable in that they can enable you to avoid both conservatorship court proceedings and probate altogether.
2. “I’ll lose control of my assets!” With you and/or your spouse acting as trustees of your own living trust, you have the unquestioned authority to do anything with your assets as you see fit. You can make purchases, open/close banks accounts, take extended vacations, appoint/remove designated trustees, and you can even dissolve your living trust at any time (as long as you can make your own decisions). Plus, you alone control who (and at what time) will inherit from your estate.
3. “Trusts are just for the ‘well-to-do.” On the contrary, a living trust can provide protections for a wide range of estates. Wealthy clients are able to avoid having to pay excessive income/estate taxes. Families of modest means can be assured that if a conservatorship is needed, their net worth will not be severely affected (since living trusts contain legal language which accomplishes the need for such a contingency). In addition, trusts can be customized to protect children with special needs, pets, and for adult children who are not financially responsible.
4. “Everybody’s estate ends up in probate anyway, so what’s the point?” If your living trust is properly written, reflects current federal and state legislation, and your property has been correctly titled and transferred into your revocable living trust, your estate will not end up under the jurisdiction of the probate court. By operation of law, property held in trust for the benefit of another will (in most cases) bypass the probate process.
5. “I don’t want to have to pay trustee fees.” Oftentimes, as long as you are able, you don’t not have to pay yourself anything for managing your trust. If you prefer to hire the services of a professional trustee, they usually charge a standard percentage based on the entire net worth of your estate.
(Source: estateplanning.com/common-misconceptions. . . )