advantages and disadvantages of a living trust

196 North Main St., PO Box 417, Naples NY 14512

1163 Pittsford-Victor Road, Suite 120, Pittsford 14534-3817

ADVANTAGES AND DISADVANTAGESOF A LIVING TRUST

A Guide for Residents of Naples, NY Interested in a Living Trust



CREATING A LIVING TRUST

A living trust is another name for a revocable trust.



The person who creates a living trust is called the grantor.



ADVANTAGES AND DISADVANTAGES OF A

LIVING TRUST



A living trust is an alternative to an irrevocable trust.



There are some advantages and disadvantages which should

be considered before creating a living trust.



ADVANTAGE: A Living Trust Can be Changed or Modified



An irrevocable trust often cannot be altered once it is created, except

to change beneficiaries.



A living trust allows you to change and modify the trust as needed,

so you have more flexibility.



ADVANTAGE: A Living Trust Allows Continued Control



When you create an irrevocable trust, you usually name someone

else as a trustee to manage assets so you can create separation between

you and the trust.



With a living trust, on the other hand, the grantor who

creates the trust can and often does act as the trustee and

continue to maintain virtually full control over trust assets.



ADVANTAGE: A Living Trust Helps Plan for Incapacity



When you create a living trust, you can name a backup trustee

who takes over if incapacity prevents you from being able to

manage trust assets.



This allows you to ensure you’ve designated a person to take over

right away to protect your assets in case something happens to you.



ADVANTAGE: A Living Trust Allows Assets to Transfer

Outside Probate



When you create a living trust, assets in the trust may transfer outside of the probate process.



This can facilitate a faster transfer of assets after death so heirs receive

assets sooner and can begin managing those assets sooner.



ADVANTAGE: You Don’t Have to File a Separate Tax

Return



When you create an irrevocable trust, the trust often has to file a

separate tax return.



This is not generally the case when a living trust is created, so you save on tax compliance

costs and paperwork.



DISADVANTAGE: Living Trusts Provide Limited Asset

Protection



A living trust does not provide the same level of asset protection

as an irrevocable trust.



Your assets in the trust can still count for purposes of determining

if you qualify for Medicaid to cover nursing home care.



A living trust won’t shield assets from being counted for

estate tax purposes.



GETTING HELP WITH TRUST CREATION



A Naples, NY estate planning lawyer can help determine if a living

trust is the best choice or if an irrevocable trust may be preferable.



Click to visit mrobinsonlaw.com.Or call us at (585) 374-5210 to

schedule a consultation.

advantages and disadvantages of a living trust

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