Why Your Living Trust Alone is Not a Complete Estate Plan

One feature of the Internet is that a world of information is just a few keystrokes away. Unfortunately, this ease of access to information is also a potential hazard, especially when you rely on incomplete information. Creating an estate plan requires you to have multiple elements, each of which serves a specific purpose. Some who research estate plans on the Internet come to believe that they can, for example, create a complete estate plan simply by creating their own revocable living trust. Here’s a few reasons why that’s wrong.

Living Trusts

A properly drafted comprehensive revocable living trust is an excellent estate planning tool which is suitable for many who seek to create an effective estate plan. Done correctly, it can allow you to keep your affairs private and save your estate time and money by avoiding the conservatorship and probate process.

Taxes

While revocable living trusts are very useful, unless special tax provisions are included in the trust document and tax planning strategies are included in the planning process, they will not likely minimize your tax burden. Whether you are concerned about paying income taxes on specific assets or creating tools that will help your estate minimize estate tax payments, it is important to consult with an experienced and qualified estate planning attorney to ensure that proper planning is included.

Asset Protection

Some people creating estate plans want to protect their assets from potential lawsuits or other creditors. In general, living trusts alone are not usually effective in helping you shield your assets. Though other trusts and planning strategies might help you protect your property, living trusts should not be the primary focus when that goal is the primary concern.

The Internet can be a useful tool to begin one’s self education about planning option.  However, the way to get a plan that is best suited to your personal situation is to work with an experienced and qualified estate planning attorney.

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Timothy P. Murphy

Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes.

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