Florida Probate Litigation Lawyer Blog
Many people, especially the large elderly population in South Florida, are targeted by various entities offering assistance and guidance in estate and financial planning. The sale of living trusts is a profitable business, and salespeople will target elderly individuals in need of financial planning. These salespeople will hold seminars, provide free food, and lecture attendees on the benefits of living trusts. However, there is an abundance of important information about living trusts that these salespeople will not tell you. It is important to be aware of your options, because living trusts are not the right financial or estate planning tool for everyone.
A living trust, like a will, is a legal document that allows you to direct what happens to your property after your death. Living trusts are revocable. This means the creator of the trust can change or cancel provisions of the trust. There are three key players with regard to living trusts: (1) the creator of the trust (the grantor); (2) the person or entity that manages the assets in the trust (the trustee); and (3) the person or persons who receive the distributions or property from the trust (the beneficiary). Often, a person will create a living trust and make himself or herself the trustee and the beneficiary for as long as he or she is alive. Living trusts are especially beneficial to people who designate beneficiaries with special needs, people who own property in more than one state, and people who are worried that they may become disabled and subject to undue influence. People will also utilize living trusts because they are not subject to probate, or the court proceeding which administers the assets of the deceased person, which can be extensive and costly to the estate.
There may be better estate planning tools available for individuals. However, because their ultimate goal is to make money, the aggressive salespeople in the business of selling living trusts will tell people that living trusts are the best option for everyone. Here is a list of crucial information these salespeople will likely not tell you about creating a living trust:
- There are other ways to avoid probate than a living trust that may be easier and more cost-effective.
- Your assets are not more protected in a living trust as opposed to a will, because creditors may still reach distributions and the trust may be contested.
- Durable power of attorney allows someone to make your financial decisions in the event that you become incapacitated or disabled. This could also be a cheaper alternative to creating a living trust.
- There are ways in which living trusts can adversely affect eligibility for Medicaid which are crucial to be aware of in planning retirement.
- Wills and living trusts are often equally effective in decreasing federal and state estate taxes.
- Living trusts are often more expensive to create and manage than a will.
If you are not sure whether you fall into the category of people for which a living trust is more beneficial than a will, you should speak to an experienced lawyer. If you have been the target of these salespeople, be aware of your options and make sure you have not shared any financial or confidential information with an untrustworthy person.
Living trusts are a viable and advantageous alternative for many people; however for the reasons listed above, they should not be entered into without the advice and guidance of an experienced estate planning attorney. The knowledgeable attorneys at Chepenik Trushin LLP are ready, willing, and able to assist you with all of your estate planning needs. Please do not hesitate to contact us for an initial consultation.
