Common Myths About Trusts
A living trust is a legal document through which your assets are put in trust during your lifetime and then transferred to your beneficiaries when you die. Having a living trust allows you to avoid probate and maintain your property. Even though trusts have been around for a while, there are still many misconceptions about them floating around.
Here are some of the most common myths about trusts.
Living Trusts Are Just for Wealthy People
While this may have been true a long time ago, it isn’t the case today. It’s true that many wealthy people have trusts in place, but that doesn’t mean they’re the only ones. More and more people with modest incomes are recognizing the advantages of living trusts and choosing to make them a part of their estate plans.
I Don’t Need a Trust If I Have a Will
If you already have a will in place, you’re off to a great start in estate planning. However, a will alone might not be enough to meet your needs. Wills can be contested and provide fewer guarantees that your wishes will be carried out. Having just a will also won’t help you avoid probate.
It’s Best to Appoint a Family Member or Friend as a Trustee
Appointing a family member or close friend as your trustee may sound like a good idea at first. After all, you know this person very well and trust them to take care of your final wishes. However, naming a family member or friend as your trustee actually isn’t recommended. It may cause fights and arguments down the road, and you don’t want to put everyone through that kind of stress. If you appoint an independent third party, like an attorney as your trustee, they will be unbiased and can take the pressure off everyone.
Trusts Can Only Benefit Family Members
Although many trusts are set up for family members, they can also be set up for business organizations, charities and even pets. For example, if you have a cat or dog, you may choose to set up a trust for it to pay for its care after you die. This can give you peace of mind that your pet will be taken care of after you’re gone.
Trusts Are Too Expensive
While trusts are more expensive to set up than wills, they may help save money in the long run. Trusts don’t have to go through probate like wills do, so your family members can save money on those fees.
If you’re considering setting up a trust, it’s important to consult with a trust lawyer in Schaumburg, IL. They have helped many individuals set up trusts in the past and here to assist you. Contact a law firm today for a free consultation.
Thanks to Bott & Associates, Ltd. for their insight into estate planning and myths about trusts.