Bold pattern in the Revocable Living Trust

Aug 6th, 2022
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How to bold pattern in the Revocable Living Trust

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There are 7 disadvantages to a living trust. Depending. In this episode, Im going to address the question what are the disadvantages of a living trust. Get ready. This is going to entertain you but also educate and inform you. So, my names Doug Andrew and Ive actually helped people optimize their financial assets, minimize taxes, empower their authentic wealth, and also help them with their estate planning for 4 and a half decades. So, even though Im not an attorney, I actually have taught thousands of hours of advanced continuing education to estate planning attorneys. And so, when I talk about living trusts and wills, many times these attorneys who have been to law school to learn how to do this go, Oh, my heavens. I didnt understand that. Or Doug, you seem to be able to simplify this better than most people. So, in this episode, Im going to go through what I feel are the seven big disadvantages of having a living trust. And you may go those are

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People set up a revocable living trust in order to give someone else the power to make financial decisions on their behalf, in the event they become unable to because of injury or illness.
Suze Orman, the popular financial guru, goes so far as to say that everyone needs a revocable living trust. But what everyone really needs is some good advice. Living trusts can be useful in limited circumstances, but most of us should sit down with an independent planner to decide whether a living trust is suitable.
Revocable living trusts have a few key benefits, like avoiding probate, privacy protection and protection in the case of incapacitation. However, revocable living trusts can be expensive, dont have direct tax benefits, and dont protect against creditors.
A living trust can help you manage and pass on a variety of assets. However, there are a few asset types that generally shouldnt go in a living trust, including retirement accounts, health savings accounts, life insurance policies, UTMA or UGMA accounts and vehicles.
The biggest downsides of a revocable trust include the following: Your trust assets arent protected from creditors. You may not qualify for needs-based Medicaid coverage for a nursing home because the assets held in trust are still counted as resources when determining benefits eligibility.
Four Reasons You Dont Need a (Revocable) Trust Probate avoidance is the only goal. While this is an admirable goal, a trust may not be the only way to avoid probate. You have straightforward wishes. Youre motivated by tax savings or Medicaid eligibility. Youre not great at follow-through.
Many with revocable trusts choose to include a spendthrift clause and do so with good reason. A spendthrift clause can provide a strong layer of protection between trust beneficiary creditors and trust beneficiaries themselves.
Arguably, the single greatest advantage of choosing a revocable living trust is the simple fact that it avoids probate court. With a last will and testament, the named beneficiaries must go through a lengthy court hearing before they are able to legally obtain the estate and/or assets specified in the grantors will.

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