Should You Trust Or Not Trust

Living Trusts have become very popular and are being heavily promoted to seniors. That is the question.

Should you Trust or not Trust? Read on to learn some simple guidelines that will help you know whether a Living Trust may be right for you and how to go about getting one if needed. As a result, any assets' owned' by the Trust at your death avoid Probate and can pass to your heirs simply and easily. A Living Trust is considered a separate legal entity much like a corporation. It also provides for the management of your assets if you become incapacitated. Even though the Trust is considered a separate legal entity, you retain complete control over everything you own. Living Trusts can be complex documents that allow you to precisely detail your wishes or they can be a straightforward means of handling your estate.

In fact, a Living Trust can allow you to control assets from the grave. It won' t' hide' your assets from Medicaid should you need to go into a nursing home. A Living Trust will not protect your assets from lawsuits or creditors. It won' t automatically eliminate all estate taxes, though it can help eliminate some and reduce others. Living Trusts are being heavily promoted through seminars. And a Living Trust only controls those assets that are' owned' by it, so unless you re- title your home in the name of the Trust, the Trust will, for instance not protect it from having to go through Probate.

If you attend one, you may come away feeling that everyone needs a Trust. Although many people will benefit from one, they are not for everyone. That's not true. Take' Lily' , an 82- year old widow from LeHigh Acres, Florida who recently called me. That is completely untrue. She was being pressured to get a Trust after attending one of these seminars. "If you don' t get one, you will have to pay thousands of dollars in taxes when you die, " the salesperson told her.

In fact Lily didn' t need a Trust at all. She had already named beneficiaries on her bank accounts and IRA, so these assets would avoid Probate when they passed to her heirs. Lily's assets consisted of a few small bank accounts, an IRA at a brokerage firm and a modestly priced condominium. The only asset that would be subject to Probate was her condo. Sometimes there can be a gift- tax issue when transferring ownership of an asset to a child. Lily has a good relationship with her kids, so she can title the condo in their names.

I almost never recommend adding a child's name to your home, but in this case it makes sense and she shouldn' t incur any tax liability. There are a number of off- the- shelf computer programs that provide all sorts of legal documents, powers of attorney, such as wills, contracts, and Living Trusts. Another option for Lily was to set up a Living Trust on her own. Trusts created using this software may not have all the special features of those costing$ 2, 000, but most people don' t need them anyway. They used an inexpensive software program to put together their Trust. Anne and her husband in South Carolina set up a Living Trust this way.

It's critical that you have an attorney review it when you' re finished. Even if it is to handle the transfer of your real estate at death, the time you take now will make things much easier for the loved ones you leave behind. Their local attorney reviewed it, made sure everything was as it should be and only charged them$ 10 If you are able to do this, then there isn' t any reason not to have a Living Trust. There are, several situations where, however it pays to go ahead and have a professional draw up a Trust for you. Professional help should be sought if you want to have incentives to financially motivate your heirs or if you want them to receive their inheritance over time instead of all at once. These include your estate being worth more than$ 5 million, having children that are handicapped or disabled, or having children from a previous marriage.