Advantages and Disadvantages of a Living Trust

Personal Finance September 29, 2015 Print Friendly and PDF

Advantages:

  • Avoids probate but not necessarily estate taxes
  • Administers property in different states with one document
  • Manages business and personal affairs during your life
  • Manages assets if you become incapacitated
  • Depending on state law, may protect separate assets in case of divorce
  • Can pay medical and other bills and provide for scholarships
  • Distributes assets faster to beneficiaries
  • Provides privacy

Disadvantages:

  • Expensive to draft
  • Involves costs to update
  • Expenses can outweigh benefits
  • Not court-supervised
  • To protect assets, the trust must be funded with them
  • The need to update and fund the trust is ongoing

 

 

 

 

 

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This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.