Can A Trust Make Your Estate Plan More Complicated?
The content pages about trusts on the websites of estate planning law firms make it sound like a trust is a magical solution to all your estate planning worries. They give the impression that a trust makes your property invisible to creditors and just accessible enough, but not too accessible, to the intended beneficiaries. It is true that trusts can be useful. If you are so wealthy that your estate would be subject to federal estate taxes if all your property went through probate, a trust can keep enough assets out of probate to make your estate exempt from these taxes. If you are so financially vulnerable that you will probably need to apply for Medicaid if you require nursing home care, but you own your home, placing your home in a trust will enable your family to inherit it instead of the probate court selling it to reimburse Medicaid. In other words, a trust can make the difference between a painless probate and a contentious one, or between your heirs receiving the inheritance you left for them and your property getting gobbled up by creditor claims before your family can inherit it, but trusts are not for everyone. If it is a good idea for you to transfer some of your property to a trust, there are also assets that you should not transfer. To find out more about the benefits and limits of trusts, contact a Tampa estate planning lawyer.
Don’t Put Assets in a Trust If They Will Naturally Keep Themselves Out of Probate
The superpower of a trust is its ability to turn probate assets into non-probate assets. For example, real estate properties and the money in bank accounts would ordinarily go through probate. You can avoid this by placing them in a trust.
By contrast, some assets naturally stay out of probate. These include the payouts from death benefits on insurance policies, including but not limited to life insurance policies. Likewise, you can turn a bank account into a non-probate asset by listing a family member as a payable on death (POD) beneficiary. Naming a trust as a POD beneficiary of a bank account or as an insurance beneficiary makes it more complicated for your family to receive the money.
It’s Bad When Trusts Go Rogue, Especially When They Are Irrevocable
A trust is a legal entity separate from you, and when it operates in ways other than what you intended, it is difficult for you to rein it back in. If the trustee acts in a manner contrary to the trust instrument, the beneficiaries of the trust can petition the civil court to remove the trustee from his or her role, but the grantor cannot. Even worse, it is possible for trusts to disappear without a trace if no one can locate the trust instrument or the trustee.
Contact David Toback About Trusts as Entities
A Central Florida estate planning lawyer can help you understand the laws underlying trusts. Contact David Toback in Tampa, Florida to set up a consultation.
Source:
msn.com/en-us/money/news/the-worst-assets-to-leave-in-a-living-trust-if-you-want-your-kids-to-avoid-probate/ar-AA1Nqn3s?ocid=msedgntp&pc=ACTS&cvid=69163b7698694c9fa86c9b669de94920&ei=23
