There are many myths about living trusts that often float around; however, don’t be fooled! Here are the three common myths that we, as estate planning attorneys often hear:
“A Living Trust only benefits the beneficiaries named in the trust, and not the grantor”
A lot of times a living trust is created, to ensure that property goes to a person’s heirs after their death; however, a living trust also ensures that a person’s affairs are in order should he/she become incapacitated. With a living trust, a loved one can step in and handle your affairs very easily should you become incapacitated.
“Living Trusts are only for the wealthy”
This is one of the most common myths that people believe. Some people think you have to have a certain size estate in order to have a trust, others do not think they need a trust because they do not have “a ton of assets”. This is untrue! Many people with average incomes set up a trust to protect their assets for their loved ones. A lot of times a person’s largest assets is their home.
“A Living Trust Will Avoid Probate Entirely”
In order for a trust to work properly, the living trust needs to be “funded”, meaning the assets need to be re-titled in the name of the trust. If there are assets that are outside the trust, those will go through the grueling process of probate. This is one of the main reasons you want to hire an experienced estate planning attorney to assist you in setting up your living trust.