Everyone has heard reference to trusts. Some even know the difference between revocable and irrevocable, but with so many kinds of trusts misconceptions are common.
Few people have the in-depth knowledge of these powerful tools and their effectiveness. Myths have abounded in the world since ancient times. However, over time myths have evolved from stories about Zeus and Poseidon to commonly-held-though-inaccurate beliefs about our modern life. Even a serious field like estate planning has not escaped the formation of myths. In this article, we will set out ‘myth busting’ three beliefs about trusts.
It’s true that some advanced estate planning trusts are better suited for people with a high net worth. However, even people of more modest means can benefit from trusts.
For example, let’s consider a revocable living trust. It may not provide all of the wealth transfer, asset protection, and generation-skipping benefits of more complicated trusts. However, it does allow you to plan for potential incapacity. You can also help your heirs avoid probate (or at least reduce its effect). A revocable living trust offers a way to transfer your assets to your heirs more quickly than probate – and more privately.
Not exactly true. For your assets to pass through your living trust, they have to be part of your living trust.
Signing your trust document is not always enough. You may need to transfer ownership of your assets to your living trust. And, while you’re at it, consider using a pour-over Will. This type of Will “pours over” some or all of your assets from your estate to your living trust after your death.
This myth may be the scariest of the three. If you expect your revocable living trust to protect your assets, you (and your heirs) may be in for a big surprise. Revocable living trusts do not provide asset protection during the life of the grantor because they are revocable. Typically, only an irrevocable trusts offer asset protection.
Talk to an experienced Florida estate planning lawyer to clear up misconceptions about trusts. After discussing your needs, your attorney may even suggest a trust that works for you.
At Law Offices of John Mangan, P.A., we help clients choose strategies that meet their needs. Please contact us at 772-324-9050 to schedule an appointment or fill out our Contact Form. We are located in Palm City, Florida, and serve clients in surrounding communities like Stuart, Hobe Sound, Port St. Lucie, and Jupiter, too.