Advantages of Trusts

REVOCABLE LIVING TRUST

Advantages

a. Control

i. During Incapacity — Control assets during life while the grantor is disabled (if the trust is properly funded, it eliminates the need for a guardian of the estate in case of incapacity because a successor trustee can handle all of the financial transactions for the grantor)

ii. After Death — disposition of your client's assets is governed by your trust and handled by your successor trustee

b. Privacy

i. No need for probate (contents of your will become public upon admitting it to probate)

ii. No need to invite creditors to make claims against the estate (in probate proceedings, notice must be published inviting creditors to come forward with claims against the decedent)

c. Avoid costs and time transferring assets after death: No probate if trust is properly funded

i. Avoid court fees (.002 of the probate estate)
ii. Avoid attorney fees ($3,000 and up)
iii. Avoid trips to the courthouse and time and expense of filing papers
iv. Beneficiaries usually receive assets faster

d. Simplify estate tax planning — When all of a couple's assets are held in a single trust, funding a credit shelter trust (family trust) is much easier

e. Prior Marriage Situations

i. Can help protect children of a previous marriage
ii. Saves assets from being transferred to family of second spouse (when using a credit shelter trust). When a surviving spouse remarries, the assets that were meant for the family of the deceased spouse may inadvertently be transferred to the survivor's second spouse than to his or her family.

f. Asset Protection — Saves assets from surviving spouse's creditors (when using a credit shelter trust) so long as certain rules are followed

g. Can administer property in several states with one document

h. Can take advantage of expertise of institutional trustees to manage assets

i. Peace of mind

j. Powers of attorney are not always honored, whereas trusts must be

Disadvantages

a. No date specific cutoff of creditors' claims (in probate, there is a cutoff after which creditors may not pursue the estate for debts)

b. Upfront costs are more than creating a simple will

c. Trusts must be funded to be the most useful, and that takes time and attention when the trust is first set up

d. There is some maintenance required such as ensuring future purchases, inheritances, etc., are placed in the trust

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King Law Offices, LLC
1667 Capital Avenue, Suite A
Madison, WI 53705

Phone: 608-620-7285
Fax: 608-233-9422
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