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Misconceptions about including trusts in your estate plan

On Behalf of | Jun 28, 2024 | Estate Planning - Trusts

Many people consider including trusts to manage their assets when planning their estates. However, several misconceptions about trusts can lead to confusion and poor decision-making. Understanding these misconceptions is crucial to creating a sound estate plan.

Trusts are only for the wealthy

One common misconception is that trusts are only for the wealthy. It’s true that many wealthy individuals use trusts, but they can benefit anyone. Benefits of trusts for non-wealthy individuals include:

  • Privacy
  • Avoiding probate
  • A structured way to manage assets for beneficiaries

Trusts are too complicated and expensive

Many people believe that setting up a trust is expensive and difficult. Trusts can involve some initial setup costs and need careful planning, but in the long run, they can save time and money. The long-term benefits often outweigh the initial effort and expense.

You lose control over your assets

Another misconception is that you lose control over your assets when you put them into a trust. As the person initiating the trust, you are the grantor. Grantors set the trust terms to determine how and when beneficiaries receive assets. Another way to control your assets is to appoint a trusted person to carry out your wishes.

Trusts are only for avoiding taxes

In addition to helping with taxes, trusts offer more benefits, including:

  • Protecting assets from creditors
  • Providing for beneficiaries with special needs
  • Providing for minor children until they reach adulthood

Understanding the benefits of trusts

It’s easy to believe the common misconceptions of trusts. However, now you can better understand the benefits of including trusts in your estate plan. They are versatile tools used to give you control over managing your assets. Being informed on the reasons to include trusts can help you better manage your estate.