People in Greensboro, North Carolina who create a will also often create a living trust and use the will primarily as a tool to catch any property that they didn’t adequately transfer to the trust when they were alive. Even though a living trust is an excellent estate planning tool for many people, there are some common misconceptions about it. Here are some of the more common myths people associate with revocable living trusts.
Myth 1: If I make a living trust I can avoid estate taxes.
While a living trust is an excellent tool for minimizing the time and expenses associated with probate, it is not suitable for estate tax minimization. A living trust will do nothing to limit how much your estate has to pay in estate taxes. If asset protection and estate tax minimization is important to you, you’ll need to consider other estate planning tools.
Myth 2: My living trust will allow me to save money.
Living trusts are great for some people because they reduce the expenses associated with administering a probate estate. However, not every estate has to go through formal probate, and not everyone needs to take the time and money to create a living trust.
Myth 3: My beneficiaries will be able to inherit immediately after I die if I have a living trust.
A living trust usually makes it easier for your heirs to receive their inheritances after you die, but that doesn’t necessarily mean it will take place immediately. There are still procedures and precautions the trustee will have to take before distributing trust property.
You’ll be able to learn a lot more about living trusts if you attend one of our free living trust seminars on June 13 or 18. Contact our office for registration details.