Are Living Trusts The Right Tool For Everyone?

Posted on May 8, 2014 at 12:45 AM
A great deal of interest has been focused in recent years on revocable living trusts as the solution to all estate planning goals. Numerous books (including do-it-yourself form books) geared to the general public have been written on living trusts–especially in relation to avoiding probate. Ads in newspapers and magazines seek to attract potential clients to free seminars about living trusts that are put on by attorneys as well as non-attorneys. Living trusts are often promoted with extravagant claims about the benefits of living trusts and the horrors of probate. Many living trust promoters have a vested financial interest in selling their “product” (often at a cost of thousands of dollars), while most attorneys are portrayed or viewed as having a vested interest in preserving a system of wills and “costly and time-consuming” court administered probate proceedings so as to maximize their fees. How can a person who is not a lawyer and has no experience with wills, probate, and living trusts sort out fact from fiction and make an informed choice about whether the use of trusts is right for him or her in his or her own specific circumstances?

Are living trusts a useful tool? Yes. But so are riding mowers. Just as a riding mower is the right tool for keeping many lawns in good shape, a living trust may be the tool that is appropriate, or even necessary, to satisfy your needs and desires in your particular situation. On the other hand, a living trust may be clearly inappropriate or unnecessary in your particular situation. Or, you may be (as many persons are) in a gray area, where the advantages and disadvantages of a living trust seem to be almost equal. If you determine that a living trust may be beneficial to you, but the advantages do not clearly outweigh the disadvantages, the decision to use a living trust or to simply use a will (possibly one that includes trust provisions), is a matter of personal preference on your part. I view my job as not to steer persons toward or away from using one estate planning tool as opposed to any other tool, but to help individuals develop an estate plan that meets their needs in a way that is likely to minimize the total expense, effort, and time involved in both creating plans, and ultimately carrying them out in an efficient and cost effective manner.

Categories: Trusts, Probate And Avoiding Probate, Estate Planning