Creating an estate plan may seem like a daunting task; frankly, one that you are not particularly up for. This is why you may be tempted to stick to the basics and simply establish a last will and testament. However, it may be in your best interest to take your estate plan one step further with a living trust. Continue reading to learn how the purpose of a living trust might be misunderstood and how an experienced New York City trusts attorney at Zimmet Law Group, P.C. can help determine whether this document should be incorporated into your estate plan.
What is the purpose of a revocable versus irrevocable living trust?
You may have heard the terms “trust” and “trust fund” thrown around without exactly knowing their function. Well, first of all, you must know that there are two different types of trusts; namely a revocable and an irrevocable living trust.
For one, a revocable living trust is one in which you transfer your ownership of assets over to the trust, yet you still maintain the ability to manage and amend it throughout your lifetime. On the other hand, an irrevocable living trust is one in which you transfer your ownership of assets over to the trust yet cannot manage or amend it at any point. However, this comes with the alternative benefit of tax breaks, court and legal fee savings, and more.
Ultimately, the type of living trust you opt for may depend on which benefits you wish to reap.
In what ways can the purpose of a living trust be misunderstood?
Now that you understand the purpose of a living trust, you must decipher whether it can best serve you and your estate plan. While there are many benefits to a living trust, they are often clouded by the common misconceptions that society holds about it. This is all to say that you must not buy into any of the following misunderstandings surrounding a living trust:
- It is a misunderstanding that a living trust is expensive to establish.
- It is a misunderstanding that a living trust comes with hefty trustee fees.
- It is a misunderstanding that a living trust is exclusively designated for high-net-worth individuals.
- It is a misunderstanding that a living trust causes more complex tax implications during your lifetime.
- It is a misunderstanding that a living trust does not completely absolve your estate from going through the probate process.
- It is a misunderstanding that a living trust requires you to completely relinquish your right to your assets during your lifetime.
When establishing your living trust, there is no other than a skilled New York City estate planning attorney to have in your corner. So please contact us at Zimmet Law Group, P.C. today.
