Many people misunderstand how trusts work. And there are three common myths about trusts that should be dispelled.
The three myths, according to a story on dailyfinance.com, are:
- Trusts only make sense for the rich.
People also think trusts are so expensive they only make sense for the rich. The truth is that while trusts can be more expensive than only having a will, the upfront costs help produce valuable savings later by avoiding costly probate. Also, if a family member is willing to be the administrator, the administrative costs can be kept down.
- Trusts involve too much effort.
Moving assets into trusts doesn’t have to be complicated. In many cases, simple methods may be used such as naming the trust as a payable-on-death or transfer-on-death beneficiary to fund the trust without having to take immediate action. These also avoid probate.
- There is no need for a trust before death.
A trust put in place before death can handle management of your affairs while you are alive if, for example, you are incapacitated.
If you have questions about trusts, feel free to call us for a consultation at (626) 696-3145.
