May 30, 2019May 13, 2020 by personal-finance

Advantages and Disadvantages of a Living Trust

Advantages:

Avoids probate but not necessarily estate taxes
Administers property in different states with one document
Manages business and personal affairs during your life
Manages assets if you become incapacitated
Depending on state law, may protect separate assets in case of divorce
Can pay medical and other bills and provide for scholarships
Distributes assets faster to beneficiaries
Provides privacy

Disadvantages:

Expensive to draft
Involves costs to update
Expenses can outweigh benefits
Not court-supervised
To protect assets, the trust must be funded with them
The need to update and fund the trust is ongoing

Next: Is a Trust the Right Planning Device for You >>

Lesson Contents

I. Introduction

II. Estate Planning

III. Power of Attorney: Planning for Incapacity

IV. Property Transfer: Documents and Legal Arrangements

V. A Will: Who Needs One?

VI. The Probate Process

VII. Personal Representative: To Carry Out Your Wishes

VIII. Gifting and Tax Strategies

IX. A Trust: Who Needs One?

a. Types of Trusts: Testamentary and Living Trusts

b. Advantages and Disadvantages of a Living Trust

c. Is a Trust the Right Planning Device for You?

X. How to Hire and Work with an Attorney

Case Studies and Resources

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Acknowledgments

Prepare Your Estate Plan belongs to a series called Legally Secure Your Financial Future. The series also includes information to help you organize important household papers and to communicate your health-care wishes.