“5 Common Myths About Trusts: Clearing Up Misconceptions”
Introduction
Trusts are one of the most misunderstood tools in estate planning, often seen as complex or only for the wealthy. In reality, trusts offer a range of benefits for people of all financial backgrounds. Here, we’ll debunk five common myths about trusts to help you understand their value and potential in estate planning.
Myth 1: Trusts Are Only for the Wealthy
Fact: Trusts are beneficial for anyone who wants to control how their assets are distributed. They can help avoid probate, minimize taxes, and ensure your wishes are carried out as intended, making them valuable for estates of all sizes. Popular use of a trust is to shield assets from Medicaid in event of nursing home facilities/care.
Myth 2: Trusts Are Complicated and Expensive
While trusts do require some initial time and resources to establish, they can actually simplify asset distribution. For many, the initial investment in creating a trust is worth the potential savings in probate costs and time.
Myth 3: Once You Create a Trust, You Can’t Change It
Not all trusts are set in stone. Revocable trusts allow you to adjust terms, add assets, or make changes to beneficiaries as circumstances evolve.
Myth 4: Only Trusts Can Protect Assets from Probate
Trusts are a strong tool for avoiding probate, but other legal strategies, such as joint ownership and payable-on-death accounts, can also help. That said, trusts often offer more comprehensive control and benefits.
Myth 5: Trusts Only Benefit Beneficiaries
Trusts can benefit you during your lifetime as well. For instance, a revocable living trust allows you to manage and benefit from assets while alive, and it can designate someone to manage them if you become incapacitated.
Conclusion
Understanding the role of trusts in estate planning can help you make informed decisions. An experienced attorney can guide you in choosing the right trust that aligns with your needs and goals.
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