What are the common myths of a living trust? Many people misconstrue common knowledge with actual myths. Keep reading below to learn the five common myths I encounter in my estate planning consultations with new clients.
But first, what are the benefits of a living trust? It allows you to retain control over the trust property until death. The trust is turned over to the successor trustee, who is chosen by you, to distribute the trust property according to your wishes.
This enables the assets to avoid probate, resulting in faster, easier distribution to your beneficiaries without additional costs. It maintains your privacy because its provisions stay confidential.
This is in sharp contrast to a last will and testament, which becomes a matter of public record. Finally, you can change a revocable trust at any time during your lifetime. Revocable living trusts are used to protect property until your beneficiary is mature enough to make wise decisions about his or her inheritance.
Myth No. 1: Living trusts are only for the wealthy.
While many wealthy people set up trusts, it doesn’t mean that this option is only for the rich. Many people with average incomes find living trusts to be beneficial.
Myth No. 2: Living trusts benefit only beneficiaries, not the people making the trusts and not you, the grantor.
In fact, a trust can allow for easier handling of your affairs should you become incapacitated, and make things much less stressful for loved ones left to care for your affairs when you’re unable to do so.
Myth No. 3: You can’t access funds once they’re in a living trust.
This ignores the “living” part of the living trust. Funds and assets can be made as accessible as you wish, to you or to whomever you desire.If you want the trust primarily for your own benefit, you can set it up so that everything is accessible to you until your death. In addition, you can make sure the funds do not end up with those you don’t want to get them.
Myth No. 4: Creating a living trust is complicated and expensive.
Not true. Setting up a trust may cost a bit more up front than simply writing a last will and testament, but the cost savings later on can make up for these expenses in the long run.
Myth No. 5: Even if you have young children, a will can do anything a trust can.
A living trust can do some things a will cannot easily accomplish, and can become a vital part of your estate plan. It allows you to give your hard-earned money and property to those you care about while protecting it for them. If you have beneficiaries who are not quite able to handle large sums of money on their own, for example, then a revocable living trust is a necessary component of your estate planning. Your beneficiary may not be mature enough to handle large sums of money.
Some people are spendthrifts, others are in not-so-good marriages and still others are going through bankruptcy. Then there are those who are just too frail and incapacitated to manage property on their own. You’d rather not be giving money or property to someone under these conditions. That’s when a living trust can be relied on.
Interested in learning more or moving forward with a Trust for your family?
Is a trust right for you? We can help you decide. Click HERE to contact our firm and schedule a free 90 minute consultation.