One of the main drawbacks of using a trust is the cost required to establish it. In most cases this requires legal assistance. While some people may believe that they don't need a will if they have a trust, sometimes this isn't the case. While these costs may be significantly lower than those associated with probate, it is important to recognize them and consider whether the value of your estate justifies the expense.
In general, the disadvantages of a trust are significantly offset by the numerous advantages that are created by having a living trust. The biggest advantage of a living trust is that, unlike a last will and will, a trust allows you to avoid probate court. There are three main reasons why this is important. Switching assets to a revocable trust will not save income or estate taxes.
Creating a living trust is not difficult or expensive, but it requires some paperwork. The first step is to create and print a trust document, which you must sign before a notary public. It's no more difficult than making a will. In most states, transfers of real estate to revocable living trusts are exempt from transfer taxes that are usually imposed on transfers of real estate.
However, in some states, transferring real estate to your living trust could result in a tax. See Real Estate in Transferring Titled Property to Trust. Most of the advantages of a living trust significantly outweigh any disadvantages, but you should still consider them when looking at your estate planning options. For many families, the disadvantages of a trust are far outweighed by advantages, making it one of the best, simplest and most commonly used methods of avoiding financial disasters and transferring assets to loved ones after their death.
To make the right estate planning decision for your family, Texas trust lawyers strongly recommend you to consider not only the trust benefits listed above, but also some common disadvantages associated with trusts. However, as attractive as trusts may be to some, they are not the right choice for everyone and there may be disadvantages. Reduce or avoid claims against your estate: Courts can effectively rewrite your will under the Family Protection Act 1955 if they consider that your family members have been disadvantaged by its provisions. The main disadvantages associated with trusts are their perception of irrevocability, loss of control over assets placed in trust, and their costs.
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