The decision to get a living trust stems from the desire to protect your assets and ensure your beneficiaries are well provided for when you are no longer able to provide for them. When looking for an estate planning attorney or trust company, you need to be careful not to be swayed by certain false claims these individuals may make.
- Exaggerated claims about probate costs. Some companies or attorneys inflate probate costs and exaggerate how much “hassle” you will have to go through during probate. They will also lead you to believe that a trust is the only way you can avoid probate–which isn’t true.
- False information about tax benefits. Be leery of companies advertising supposed tax benefits of living trust. Living trusts have no effect on your taxes.
- Living trusts shield you from creditors. A living trust cannot protect your property and assets from creditors unless it is irrevocable – in which case not even you would have access to your own assets or property.
- Claiming living trusts are much cheaper to set up. Living trusts are actually expensive and can cost five to six times more than the cost of a will. A living trust can even cost more than probate depending on the size of your estate.
- Claims they can “quickly”set up your living trust. Living trusts take a lot of time to set up properly. It involves more than creating a document; it requires a complete transfer of property from your name to the trust to be valid, known as “funding the trust”.
- Claims that a living trust eliminates the need for a will. A living trust is not a replacement for a will. You need a will to appoint guardianship or conservatorship for minor children, and a will can provide provisions for asset distributions that are included in the trust.