Liability of a Living Trust

A living trust is where property and assets are managed to avoid probate. While having a trust saves court costs, there are some disadvantages to having one, including the initial cost, the lack of a probate review and refinancing the property.

Initial Cost

It costs more to set up a living trust than a will initially. While it does save money in the long run, all costs must be paid in advance. Some people, trying to save money, set up their own trusts, but this is not advisable because of the amount of paperwork and the legality of the trust.

Probate

A last will and testament will go through probate court to be reviewed by a judge. If the property is in a trust, it will not be reviewed. This may save money in court costs, but the deceased's wishes may not be carried out as he would have wanted. If there is a lot of property and assets, the probability of something going wrong with the distribution increases. It is always recommended the property and assets go through probate.

Refinancing

While it is not impossible to refinance property in a trust, it is can be difficult and may require a lot of time and paperwork. If refinancing is necessary, the property would have to be taken out of the trust. Once the refinancing was finalized, then the property would be able to go back into the trust.

References

• Legal Help Mate: Advantages of a Living Trust as Estate Planning Solution
• Free Living Trust Information:Disadvantages of a Living Trust