December 13, 2021
Pros and Cons of a Living Trust
Strategizing an estate plan and including tools to streamline the probate after your demise is a good direction to work in. One such tool included in estate planning is a living trust. Now whether you need to use a living trust entirely depends on your requirements and priorities. But knowing about the advantages and disadvantages of actively including one in your estate plan could be beneficial to make an informed decision.
Here are some pros and cons of a living trust-
Pros of a Living Trust-
- Avoid probate procedures: Probate procedures can be lengthy and costly. Your family would be already going through a lot during such times and doesn’t need additional stress. A living trust can help you avoid the probate court entirely.
- Flexible to changes: An individual comes across many significant changes during their lifetime. By creating a revocable living trust, you can make alterations to its conditions whenever you want.
- Not a public property: A will goes into the public records and can be accessed by anyone. Living trusts are private even after your death.
- Cannot be challenged: The part where the last testament fails is being challenged when a family member is not happy with the distribution. Challenging a will is a lengthy, time-consuming, and costly procedure. However, a living trust is inert to challenges.
- Beneficial in case of incompetency: If you become incompetent or disabled, the trust automatically names someone your trustee to manage the assets. With living trusts, a durable power of attorney is not required.
- Tax reduction: Although a living trust cannot reduce the federal asset taxes on its own, you can include shelter trusts that convert living trust into tools for estates that exceed the exclusion amount.
Cons of a Living Trust-
- Cost: Creating a living trust can be expensive. There may be added fees for re-titling and updating. Moreover, if you name an institution your trustee, you may have to pay them separately.
- Management: You need to constantly update the living trust with your life. You will have to devote time to add and subtract assets from your living trust throughout your life.
About Castle Wealth Group
Contact Castle Wealth Group for all your estate planning needs. We build a perfect strategy for your retirement, including income planning, investment planning, tax planning, health care planning, and legacy planning. Visit our website or call us at 844.885.4200 or email us for your financial advice.