Advantages of the Living Trust

Got Trust Issues?

Let’s look at some of the advantages and disadvantages of having a Revocable Living Trust in place.

Pros

  • Avoids Probate Probate is the legal process for transferring your property when you die. Assets named in the trust avoid this.
  • Avoids Multiple State Probate Proceedings  You can avoid expensive multiple probate proceedings when you own real estate or other property in several states.
  • Changeable or Revocable The living trust allows you to make changes (or amendments) to the trust document while you are still alive.
  • Protects Your Privacy – Trusts allow the transfer of your personal assets to remain private. The probate process can expose your estate to the public.
  • Eliminate Challenges to the Estate – Wills can create family disputes at your death and be challenged by any member of your family. By using a trust, you avoid contests.
  • Segregation of Assets – This is useful for married couples with separate property before marriage or inherited.
  • Helps if You Become Incapacitated – A properly drafted living trust package will include Powers of Attorney for financial and medical needs, as well as Living Wills and Nominations of Conservator.
  • Guardianship for Minors or Disabled Children – A properly drafted living trust package will include guardianship documents.
  • Estate Tax Minimization – Trust tax planning should be completed with an estate planning attorney and your financial planner.

Cons

While there are many advantages to establishing a revocable living trust, there are also some drawbacks:

  • Cost – Initial cost is higher than creating a Will.
  • Assets – You must make sure all your assets are in the Trust or you won’t avoid probate.
  • Records – There may be additional record-keeping for the Trustee(s).
  • Misinformation – There can be confusion with asset protection, but property is treated just like you own it in your name.
  • Removal – There may be minor complications such as having to take property out of the Trust before refinancing.

Conclusion

While there are a few disadvantages of having a Revocable Living Trust, we think that the advantages far outweigh them. The peace of mind from taking care of your estate and having it’s disposition settled should be worth the investment.

If you would like further information about your Trust options, email us at info@wiserinvestor.com or Contact Us.

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