Revocable Living Trust Myths
Phelps LaClair, serving Chandler, Mesa and Gilbert AZ, is a second generation estate planning firm. In consulting with thousands of clients over the years, we have learned there are many misconceptions about wills and trusts. Here are 3 of the most common Revocable Living Trust myths.
What is a revocable living trust?
A revocable living trust is a popular estate planning vehicle that offers many advantages in protecting your estate and your beneficiaries. More than just a will substitute, it allows your heirs to avoid the costs and delays of probate and allows you to name a Successor Trustee to manage your affairs when you die. A will might be easier to write, but there are great benefits that a revocable living trust has over a will, including maintaining your privacy through avoiding probate, and planning for disability. A properly designed revocable living trust can also protect your heirs’ inheritances from life crises such as divorce, creditors, and lawsuits. But, there are myths about revocable living trusts that need to be addressed.
Myth #1: Revocable living trusts are only for rich people
Even if you have a modest estate, a revocable living trust will be beneficial to your loved ones. The costs for probate can swallow up a higher percentage of a small estate, so it is a wise decision to avoid probate entirely. And when the time comes, a revocable living trust will give your heirs immediate access to your property, rather than waiting for the court to decide who gets what. When you have minor children, naming the trust as the beneficiary of your retirement account and your life insurance allows your children to avoid a court-appointed guardianship. This is also true when you include a disability plan as part of your revocable living trust. Even with a small estate, everyone who owns assets such as a house and vehicles, can protect them with a revocable living trust.
Myth #2: A revocable living trust is complicated and expensive
Actually, for the majority of people today, a revocable living trust is a solid foundation for an estate plan. Our 40 years of experience have shown us what works and what doesn’t for our clients, and though there are different kinds of revocable living trusts, finding the right one for you doesn’t need to be complicated. We help you understand the best plan for your financial needs and help you walk through the process from start to finish. And though creating a well-drafted living trust may cost more than a simple will, a trust is more flexible, offers better protection of assets and beneficiaries, and will save your heirs money by avoiding probate. The real expense could come into play after you’ve passed away, through choosing a will that creates unnecessary headaches for your family through court delays and costs of probate.
Myth #3 All living trusts are the same
Your present financial needs, as well as future goals and family relationships, are all factors to consider when choosing from among the different kinds of revocable living trusts. We will be happy to work with you to create an estate plan that is best for you and your family, using the right revocable living trust. Don’t be put off by the revocable living trust myths that you may have heard. Phelps LaClair is here to help you navigate through the range of options and bring you out into the clearing. Come in for a visit so we can get you started on the road to peace of mind concerning your estate plan. Your first consultation is absolutely free!
Images used under creative commons license (Commerical Use) 04/11/19 Photo by Matthew Henry from Burst