Pros
A living trust can help your estate avoid probate. This is a big advantage especially if your estate is large. Unlike a normal will, a living trust does not have to be probated. Upon your death, the assets in the living trust are held or transferred by your trustee according to the terms of the trust.
A living trust can keep your affairs private. When a will is probated it becomes part of the public record. Anyone can read it. Living trusts generally remain private ensuring the privacy of the living trust and lessens the likelihood of litigation.
A living trust offers flexibility. You can easily change a living trust during your life as circumstances warrant. Changing a will requires more formality and following certain procedures to make a change.
A living trust can be used to avoid guardianship proceedings. If you become disabled, your trustee can manage your assets and financial affairs for you while you are disabled. Without a living trust, your loved ones would have to initiate guardianship proceedings in court and get a judge to give them the ability to act for you.
Cons
A living trust is useless unless your assets are formally transferred to the trust. So, all the advantages above disappear if you have not funded the trust. Getting your assets transferred to the living trust takes time and usually there is at least some expense.
In addition to the costs of funding the living trust, there is also the initial cost to have an attorney prepare it. Generally it will cost more to have an attorney prepare a living trust than it would to have the attorney prepare a simple will.
Visit Free Living Trust Information for all your information needs on Living Trust.
Friday, February 19, 2010
Saturday, February 13, 2010
Tips for Seniors on Avoiding Living Trust Scams
Many seniors worry about what will happen to their property and assets after they pass away. Setting up wills and trusts can seem like a daunting task, and while some unscrupulous companies and individuals may try to take advantage of unwary seniors, there are plenty of resources when it comes time to set up a will or trust.
Try to stick to the facts and be wary of the exaggerated and often outrageous claims that living trust companies make about their products. Claims to look out for include:
• False Claims About the Probate Process.
Many companies try to convince seniors that the probate process is always long and costly and that everyone's estate will be subject to probate. These companies are usually exaggerating the costs and hassles of probate and you may be able to avoid probate in other ways.
• False Claims About Tax Benefits.
Many companies advertise the tax benefits of living trusts. The truth is that a simple living trust (as opposed to a more expensive and complicated tax-saving living trust) has no effect on taxes.
• False Claims That Living Trusts Will Shelter You From Creditors.
A living trust will not automatically protect your assets and property from creditors.
• False Claims About the Cost of Setting Up A Living Trust.
Living trusts can be expensive. Lawyers often charge five or six times the cost of a will. Depending on the size of your estate, the costs of a living trust may be much higher than the cost of probate.
• False Claims About How Much Time it Takes to Set Up A Living Trust.
It can take a lot of time to set up a trust properly. Most important, writing up the document is not enough. The trust will not be valid until property is transferred from your name to the trust. This is called “funding the trust.”
• False Claims That You Don’t Need a Will If You Have A Living Trust.
Even if you decide to buy a living trust, it is still a good idea to have a will as a back-up.
Visit Free Living Trust Information for all your information needs on Living Trust.
Try to stick to the facts and be wary of the exaggerated and often outrageous claims that living trust companies make about their products. Claims to look out for include:
• False Claims About the Probate Process.
Many companies try to convince seniors that the probate process is always long and costly and that everyone's estate will be subject to probate. These companies are usually exaggerating the costs and hassles of probate and you may be able to avoid probate in other ways.
• False Claims About Tax Benefits.
Many companies advertise the tax benefits of living trusts. The truth is that a simple living trust (as opposed to a more expensive and complicated tax-saving living trust) has no effect on taxes.
• False Claims That Living Trusts Will Shelter You From Creditors.
A living trust will not automatically protect your assets and property from creditors.
• False Claims About the Cost of Setting Up A Living Trust.
Living trusts can be expensive. Lawyers often charge five or six times the cost of a will. Depending on the size of your estate, the costs of a living trust may be much higher than the cost of probate.
• False Claims About How Much Time it Takes to Set Up A Living Trust.
It can take a lot of time to set up a trust properly. Most important, writing up the document is not enough. The trust will not be valid until property is transferred from your name to the trust. This is called “funding the trust.”
• False Claims That You Don’t Need a Will If You Have A Living Trust.
Even if you decide to buy a living trust, it is still a good idea to have a will as a back-up.
Visit Free Living Trust Information for all your information needs on Living Trust.
Sunday, February 7, 2010
Living Trust and Will Differences
Living trusts and wills are two separate things, and one does not replace the other. Both are important documents to have to ensure that your wishes are carried out in the event of your incapacitation or death. Living trusts are sometimes included with wills and power of attorney documents. Trusts are essentially boxes for holding assets during and/or after your lifetime, while a will directs where your assets and belongings will be distributed after your passing.
Important Differences:
* The Effective date: A living trust takes effect while you are alive. A will takes effect after you pass.
* Providing Direction before Death: Living trusts can make management of an estate during an incapacitation easier than power of attorneys alone. If an asset is in a trust, financial institutions such as banks must recognize your successor trustees during an incapacitation. Institutions are not required to accept powers of attorneys.
* Privacy: Wills are made public during the probate process. Living trusts are private documents and in many states are not recorded.
* Probate: Assets with listed beneficiaries (life insurance, IRA's, beneficiary deeds, etc) and assets in a living trust avoid probate. Probate is a court process to validate a will and ensure its instructions are followed during the transition of an estate. Probate's cost and length differ in each state.
* Provisions for Care of Children: Wills name guardians for children while living trusts do not, however, trusts can appoint someone different than the guardian to manage a beneficiary's assets until they are older and fiscally responsible.
* Contesting: If someone contests the estate, living trusts are often better equipped to handle the contest.
* Taxes: Living trusts can minimize estate taxes for married couples by doubling estate tax exemptions. A will by itself can not double exemptions.
Visit Free Living Trust Information for all your information needs on Living Trust.
Important Differences:
* The Effective date: A living trust takes effect while you are alive. A will takes effect after you pass.
* Providing Direction before Death: Living trusts can make management of an estate during an incapacitation easier than power of attorneys alone. If an asset is in a trust, financial institutions such as banks must recognize your successor trustees during an incapacitation. Institutions are not required to accept powers of attorneys.
* Privacy: Wills are made public during the probate process. Living trusts are private documents and in many states are not recorded.
* Probate: Assets with listed beneficiaries (life insurance, IRA's, beneficiary deeds, etc) and assets in a living trust avoid probate. Probate is a court process to validate a will and ensure its instructions are followed during the transition of an estate. Probate's cost and length differ in each state.
* Provisions for Care of Children: Wills name guardians for children while living trusts do not, however, trusts can appoint someone different than the guardian to manage a beneficiary's assets until they are older and fiscally responsible.
* Contesting: If someone contests the estate, living trusts are often better equipped to handle the contest.
* Taxes: Living trusts can minimize estate taxes for married couples by doubling estate tax exemptions. A will by itself can not double exemptions.
Visit Free Living Trust Information for all your information needs on Living Trust.
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