Many people hear the word “trust” and automatically assume that it’s not something they need. Unfortunately, there are several common misconceptions floating around about this valuable estate planning tool. Trusts may seem like something that only the very wealthy need as part of their estate plan. In reality, the need for a New Hampshire revocable trust has much more to do with the type of assets you own, the age and life situations of your beneficiaries, and your overall goals for estate planning. An experienced Exeter estate planning lawyer can help you decide whether a trust is the right fit for your needs.
Top Three (Incorrect) Assumptions People Make About Revocable Trusts
What are some of the most common misconceptions people have about revocable trusts? The following is an overview:
- Their estate is not big enough.
In reality, the size of a person’s estate has little to do with whether they could benefit from a revocable trust. One major benefit of a trust is avoiding probate, allowing for a much easier and more streamlined administration of your estate. Assets held in trust at the time of your passing do not have to go through probate. As a result, even if all you own is your home (regardless of whether you have a mortgage!), you would likely benefit from the use of a trust.
Additionally, regardless of the size of your estate, if leaving assets directly to your loved ones would be problematic, a trust may provide significant benefits. This is often the case where beneficiaries are too young to responsibly manage an inheritance. It is often true in situations where leaving money to a loved one could cause more harm than good, such as where a loved one is struggling with an addiction, facing a potential bankruptcy, going through a divorce, or receiving government benefits dependent upon income and asset eligibility.
- A trust will make their estate plan too “complicated.”
An estate that must be probated is typically far more “complicated” than an estate that has been well planned so as to avoid the need for a probate administration. Revocable trusts are a critical part of such planning. Assets held in trust at the time of your passing do not need to go through the probate process. A well-written trust will be easy and efficient for your loved ones to administer.
- A trust is too expensive.
Any estate plan is certainly a financial investment; however, many clients are surprised to learn that the cost of setting up a revocable trust is almost always less expensive than the cost of a probate administration! After you are gone, administering a trust, as opposed to administering a probate, will typically result in significant savings. The investment will also last for a long time. In many cases, a revocable trust may not need any changes for several years – it may even last for the duration of your life. Even where life circumstances give rise to a need for revisions and updates as time goes on, these amendments can be quick and surprisingly affordable.
Setting up a revocable trust is a wonderful gift to your loved ones, allowing for an easy administration of your estate after your passing. An experienced Hampton, New Hampshire estate planning attorney can help walk you through this process. Contact us today for a complimentary consultation by calling us at (603) 434-1770.