Disadvantages of a Living Trust
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Because living trusts are not under direct court supervision, a trustee who does not act in your best interests or in a prudent fashion accountable to you or your beneficiaries may, in some cases, be able to take advantage of the situation to a greater extent than would be possible had the trustee been under direct court supervision which provides such safeguards as court accountings and, in some situations, a bond.
In some cases, the cost of preparing a living trust and other estate planning documents will be higher than the cost of simply preparing a will. However, in more complex estate plans the difference in cost may not be significant.
Once created, the trust must be “funded.” The funding of a trust is simply the transfer of assets from your own name to whomever is acting as trustee of your living trust - you or some other person. Deeds to real property must, therefore, be prepared and recorded, bank accounts transferred and stock and bond accounts or certificates transferred as well. These are not necessarily expensive tasks but they are important ones and require some paperwork to complete in order to make your trust effective. People in certain businesses (for example, real estate development) sometimes find that having a living trust creates excessive problems in the operation of the business when it is necessary to deal with a third party, such as a title company.
Do I need a will if I have a trust?
If you have a living trust you should also have a back-up or pour-over will. Your will affects any assets which, for one reason or another, were held in your name alone at your death and not in your living trust or in some other form of ownership.
With the living trust, your will usually contains as its primary provision for the distribution of your estate, a “pour over” provision which simply directs that any assets held in your name be transferred at your death to your living trust. Of course, a probate is not avoided with respect to those assets which are transferred to your living trust by your will.
Your will may also nominate the guardians of the person and estate of your minor children, to care and provide for them.
Charlotte L. Ruse is a Kern County registered and bonded Legal Document Assistant (LDA), serving Kern County for 12 years by providing affordable self-help legal document preparation and Notary Public services. Kern County LDA #95 EXP. 10-1-17. I am not an attorney. I can only provide self-help services at your specific direction.