Living trust vs a will
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Living trust vs a will
My wife and i have a will,
power of attorney, healthcare
power of attorney and living
will. Should we consider a
trust? I read with it you can
avoid probate but it can be
costly and every asset must be
entered into it…updated as
well? What is the advantages vs
disadvantages?
Asked on May 16, 2017 under Estate Planning, North Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
A living trust, or more properly an intervivos trust, can avoid probate, but there are two costs to it: monetarily, setting up a proper trust to accomplish your goals is very technical, so expected to spend a few thousand dollars on legal fees to get it done correctly. The real cost, however, is non-monetary: you have to transfer your assets to the trust, and the assets are no longer yours. The assets will be managed, invested, controlled, distributed, etc. by the trustee(s) in accordance with the trust instructions. No matter who the trustree(s) and how good the instructions, you give up control and flexibility/freedom by putting your assets into a trust. Since estate taxes are not actually a big factor for most estates--only estates worth more than around $5.49mm for an individual, or $10.98mm for a couple, will face any federal estate taxes, for example--it is unclear whether, simply to avoid the probate process (since tax avoidance is therefore generally not a factor), the complexity, cost, complications, etc. of a trust is worth it.
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