F. A word about Living Trusts
There are a lot of companies aggressively
marketing Living Trusts to older persons.
There can be good reasons for having a
living trust, and many attorneys use them
effectively, but the major reason offered
by companies peddling them is to
avoid probate. This can make sense
in a state in which probate procedures
are complex and intrusive.
In Alabama in the ordinary estate probate if needed at all
is usually not expensive, complicated or intrusive. The process is
usually completed in seven months or so. There are some benefits
to probate, as well. For most Alabama estates it may make little sense
to go to the expense of having a living trust drawn up and funded
if the primary reason is to avoid probate. Before you
fall for someones sales talk, consult an attorney familiar
with wills, trusts and probate procedure.
Over-aggressive living trust marketing and outright scams have
become so pervasive that the attorneys general of several states
have established task forces to try to stop this financial abuse.
The most frequent targets are vulnerable seniors. Trust salespersons
overstate the costs and complications of probate and wills, use
the all-too-common distrust of attorneys, and every other button
they can push, to frighten seniors into buying something they don't
need. Seniors and families should be alert to the possibility of
abuse. Many of the living trust peddlers come right into the home
and use high-pressure tactics at the kitchen table to bully and
manipulate seniors into buying "today".
A well-planned trust can be more expensive
than the combined costs of having a will
prepared and probating it at the death
of the testator. Decisions must be made
about whether a trust is appropriate for
you, and if so, what to put in trust.
Then, property must actually be transferred,
which generally requires further preparation
of documents. Also, you will still need
a will to cover things not placed in trust,
or forgotten, or purchased after the trust
is executed and funded. Too often people
execute living trusts but do not fully
fund them, so their goals cannot be accomplished.
A living trust can be very flexible and can offer advantages in
passing property at death as well as management of business affairs
if the grantor becomes incapacitated, but these documents are not
for everyone. If you are considering a living trust, get the advice
of an attorney experienced with them. Be wary of companies selling
one-size-fits-all trusts whose primary benefit is to
the company selling them. Too often they are simply tools to obtain
information about what you have so the company can try to sell you
insurance or investment products (with high commissions, of course).
(See additional information on Living Trusts in the Powers of Attorney
article on this web site.)
Living trusts do not shield property
from estate taxes, and they can cause
problems in qualifying for public assistance
with nursing home expenses. Irrevocable
trusts can be and frequently are used
in estate planning, but these can be complicated.
It is vital to get good advice, since
once executed, they cannot be changed