What Are the Advantages & Disadvantages of a Living Trust?

A living trust is an estate-planning legal document that places all of your assets in a trust. These assets are administered by the trust for you during your lifetime. Upon your death, they are transferred from the trust to your beneficiaries.

More Complicated than a Will

Setting up a living trust is more complicated and costly than using a will to disperse your assets. It requires transferring ownership of your assets to the trust.

Protects You Even When Incapacitated

A living trust ensures your wishes are carried out should you become disabled. In contrast, a will is only implemented upon death.

No Court Supervision

When you die, your assets can be distributed by the trustee you designate without court intervention or supervision. This saves time and money for your beneficiaries.

No Tax Effect

A living trust offers neither an advantage nor disadvantage when it comes to estate taxes. All options that are available in a living trust for estate tax reduction are also possible to implement with a will.

Living Trusts and Medicaid

Putting your assets in a living trust does not shield them from being used for long-term medical care before Medicaid would kick in.

References

• Do I need a Living Trust?
• Lving Trust FAQs
• Durable Powers of Attorney and Revocable Living Trusts

Resources

• Living Trust Offers: How to Make Sure They're Trust-worthy