Common Misconceptions About Living Trusts

Most people around Toledo know they should have some sort of estate planning in place–whether it be wills or living trusts. However, they procrastinate because of fear that planning for death will hasten its occurrence, or they think it’s too expensive. Others believe that no plan is better than being pressured into the wrong type of plan.

There is a significant amount of conflicting information out there regarding estate planning options. Because of this, it may be difficult to know who you can trust.

Here are the most common pressure tactics we’ve heard…

“Living Trusts are for everyone.”
Be wary of lawyers who proclaim a Living Trust is the indisputable solution to every person’s estate planning needs. While a Living Trust is no doubt the right vehicle for some people, it may not be right for everyone.

Some firms churn out cheap trusts at an extremely high volume. Because of this, they fail to advise clients on the importance of trust funding.  With this type of firm you won’t have ongoing client care as your life changes.

“Living Trusts are for no one.”
Some law firms make the claim to the public that if an attorney even discusses a Living Trust with you they’re just trying to scam you. They even say that no one needs a Living Trust because “probate is easy.” We’ve never heard of probate described as “easy.”

What’s missing from this equation is that probate is a public court process. As a result, anyone can see your Last Will and everything else filed with the court – including your children’s names and ages and what they’ve inherited. Probate also leaves oversight and potentially decision-making in the hands of the judge.  This is as opposed to someone you love and trust. Plus probate expenses can add up over time. This can deplete what you’d otherwise leave behind for your children.

“Living Trusts unnecessarily expose your assets to creditors.”
Having a Living Trust does nothing additional to expose your assets to any other liabilities you may already have or face anyway.

“Living Trusts increase taxes and delays.”
If you have a Revocable Living Trust, nothing changes about your income tax liability or the tax return you file each year. In fact, everything is the same as before. Also, because a Living Trust is private and the court isn’t involved, the successor trustee can immediately step in and handle assets and debts without delay. On the contrary, without a Living Trust, your family has to get court approval first.

“Courts are declaring Living Trusts invalid.”
If a Living Trust is properly drafted and executed with a trusted estate planning attorney, like HML, there is no fear of a court striking down the Trust as invalid.

Conclusion about Living Trusts Pressure
No estate planning tool is all-or-nothing. The type of plan that is right for you and your family depends on many factors including whether you have minor children, own your home, own investment properties, have retirement accounts, have life insurance, owe more than you own, and other factors.

Beware of extreme beliefs or cure-all approaches! Do your research when meeting with an estate planning attorney in Toledo. Book a consultation with HML and see why our online reviews rave about being able to trust us.