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Steven Booker Law

The Advantages and Disadvantages of Trusts

Advantages of Trusts

  • First - Saves time and money

As opposed to a Will, a Living Trust does not have to be probated, which can be a very time-consuming and costly process.

By avoiding the probate process, the Trustee is able to immediately take action in caring for the affairs of the deceased such as paying for funeral costs and passing out assets to the beneficiaries.

Your beneficiaries won’t have to wait around on the state to tell them when they can get their inheritance.

  • Second - It ensures privacy.

Because if you probate a Will, it becomes a public document and anyone can get access to it after your death. They simply have to go to the county records.

But a Living Trust, on the other hand, is completely private.

No one will be able to know the details of the Trust without the Trustee handing over that information.

  • Third - It protects against possible challenges.

A Living Trust is harder to challenge than a simple Will.

With a Living Trust, the person who is challenging it has to prove that the creator of the Trust was coerced into signing it and also forced to go through the entire process of transferring the title or deed of each asset into the Trust’s name.

 

Disadvantages of Trusts

  • First - Cost

‚ÄčTrusts are more complicated than simple Wills and therefore, they are more expensive. But keep in mind, while you are spending money upfront, you will be saving money on the back end by avoiding probate.

  • Second - Inconvenience

Since a Living Trust is created and funded before you die, you as an individual don’t technically own anything anymore.

Instead, the Trust owns it.

Therefore, if you decide to sell a piece of real estate or a vehicle that is owned by the Trust, you have to take it out of the Trust before you can sell it.

  • And finally, which kind of goes hand-in-hand with inconvenience, is the funding of the Trust which is the transferring of everything you own into the Trust.

Once the Trust is created, you have to go back through everything that you want in it and re-title or re-deed those assets so that the Trust is named as the owner.

If you fail to do this, the Trust won’t work to its full extent.

You’ve paid for and set up the protection, yet you’ve failed to put anything under the protection that you bought.

 

It’s important to preserve and protect your estate and your beneficiaries.

Given the right circumstances, a Trust is the best way to do that. So don’t wait until it’s too late.

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