What Are Misconceptions About Living Trusts?
When considering an estate plan, the first tool that individuals may gravitate towards is a last will and testament. However, the possibility of establishing a living trust must not be written off right away, as there are many benefits that you and your beneficiaries may reap from this. Follow along to find out the most common misconceptions about living trusts and how one of the proficient Butler County trust attorneys at Heritage Elder Law & Estate Planning, LLC can help you better understand the function of this tool.
What is the function of a living trust?
Before all else, you must understand the primary function of a living trust. Put simply, this estate planning tool allows you (i.e., the grantor) to transfer assets into a trust, all while a trusted individual (i.e., the trustee) manages these assets and distributes them to your loved ones (i.e., the beneficiaries) accordingly upon your passing.
With this, there are two different types, namely a revocable living trust and an irrevocable living trust. For one, you may modify a revocable living trust throughout your lifetime, making it the more flexible of the two. On the other hand, you may not easily alter an irrevocable living trust, yet you may reap certain estate tax benefits and otherwise.
Regardless of whether it be revocable or irrevocable, a living trust differs from a last will and testament in that it avoids the probate process entirely.
What are the most common misconceptions about living trusts?
You must not make any sweeping assumptions when it comes to establishing planning documents, such as living trusts. Rather, you must listen to the sound advice of an estate planning attorney who may know the best tools to place in your toolbox, so to speak. Without further ado, the most common misconceptions, that we discourage you from feeding into, include the following:
- Living trusts are specifically designated for high-net-worth individuals: rather, there is no minimum for the amount of assets you are required to place in your trust.
- Living trusts force individuals to relinquish control over their assets: rather, you may maintain full control in your revocable trust, while you may be your own trustee in your irrevocable trust.
- Living trusts come with complicated tax implications: rather, you may file your normal tax return, and then your trustee may file a separate tax identification number and tax return upon your passing.
- Living trusts come with significant trustee fees: rather, your trustee may be willing to take on this role without charging any fees, especially if this individual is your family member.
When it comes to your living trust, there is no other than one of the talented Butler County estate planning and probate attorneys to have in your corner. So please get in touch with us at Heritage Elder Law & Estate Planning, LLC today.
