06 Nov Misconceptions Of Living Trusts
When it comes to legal paperwork, it can be a daunting task if you are trying to do it alone. There are many good reasons to do your legal planning with a qualified lawyer, and one of them is to avoid common misconceptions about living trusts. Incorrect information regarding trusts and estate planning can come through friends, family members or the media. Phelps Law, located in Scottsdale and Gilbert Arizona, has decades of experience in estate planning. We can help you establish the best living trusts to provide you and your loved ones custom-made asset protection for the future.
There are several misconceptions when it comes to your living trusts that need to be debunked. Some of the common ones include:
1: Living trusts are expensive: Initially, a strategically created living trust can be more costly than a will, but it is more cost-efficient in the long run. It saves your sucessor’s excessive amounts of time and money by avoiding probate, as well as the extensive court fees and taxes if not created.
2: Only wealthy people need trusts: Historically, living trusts were built for the wealthy, but that is no longer the case. Living trusts can now be made to protect estates of all sizes, and have become much more affordable for those in middle or lower income brackets. Along with the affordability, more people have sought these out to help relieve stress on loved ones after their passing.
3: Probate is inevitable so trusts are pointless: By creating strategic preparations through estate planning and building an appropriate living trust, probate is avoidable. If you assets are properly titled under your living trust, then they will not go through probate. Probate happens when your assets are not titled under your trust, your living trust is not properly written, or it is not a revocable living trust.
4: A trust means giving up control of my assets: By naming yourself as your own trustee, you avoid giving up control of your assets. You then name a beneficiary to disburse your assets as you wish upon your passing. You, as the owner, maintain full control.
5: Have to pay trustee fees: Another benefit to being your own trustee is that you do not pay any fees at all. Successor trustees may have a service fee, or if you name a specific professional trustee, there will be a small fee when they step into that role for you.
6: You need a separate tax ID and must file a separate tax return: As long as you are living and not incapacitated, you will file normal tax returns by using your social security number. Only after death and if your trust continues will it need its own tax ID and tax return.
These are just a handful of the common misconceptions regarding living trusts. Phelps Law has years of experience following through with successful and peaceful estate planning strategies. To learn more, contact us today!
Images used under creative commons license – commercial use (11/1/2017) KiloThought Media (Flickr)