Make the right choices for you and your family.
Ten incorrect facts used to sell Living Trusts
You will avoid probate with a Living Trust.
Survivorship bank accounts and survivorship property ownership are much simpler and less costly ways of avoiding probate. ALWAYS consult your attorney before proceeding with these options to fully achieve your goals.
Everyone should have a Living Trust.
No. In fact, Living Trusts are important for people who need assistance in managing assets (due to illness or incapacity) or for owners of out-of-state property (to avoid double estate taxation). If you do not fall in either of these categories, a Living Trust is probably not for you.
Attorneys charge from 3-10% to probate your estate.
Most attorneys charge an hourly rate for their work. Be sure you read and understand your attorney's fee agreement.
Probate is expensive and time consuming.
Usually courts have very simple and concise procedures for estates with properly drawn wills.
Probate may take years to complete.
Most estates are probated in much less than a year, but family disputes or IRS problems can cause excessive delays. Keep in mind the administration of a Living Trust usually takes as long as probating a will.
Living Trusts avoid guardianship in case of future incapacity.
A durable power of attorney is a simpler and less expensive method of dealing with incapacity. However, an attorney should be consulted to discuss the advantages and disadvantages of using this method.
Living Trusts help you avoid your creditors.
This is simply not true!
You can avoid contested wills with Living Trusts.
Trusts, like wills, can be attacked on the basis of fraud, lack of capacity, or undue influence.
A Living Trust can help you qualify for Medicaid or other public benefits.
Again, not true!
Living Trusts save you estate taxes.
Most likely, they will not. Under current law a very large dollar amount of an estate passes "tax free." This tax free portion will ultimately increase to $3,500,000. If your assets exceed this amount, there are more appropriate techniques to minimize your tax liability. CONSULT YOUR CPA AND ATTORNEY!