By Jeffery J. McKenna
Many advertisements warn readers that making a Will may be one of the biggest mistakes they can make. The ad might detail the horrors associated with settling an estate with a Will. The advertiser offers a simple solution: the Revocable Trust. All you have to do, states the ad, is to purchase do-it-yourself Revocable Trust forms and use them instead of a Will. These Trusts are not only being sold through these do-it-yourself forms, but they are also being touted by newsletters and the popular press as an excellent way to structure your estate.
The promoters of the Revocable Trust are suggesting that you transfer all of your assets to the Trust while you are alive. You, or you and your spouse, are the trustees of the Trust and manage the Trust assets for your own benefit. You can change or cancel the arrangement at any time. In sum, while you are alive nothing has really changed except that your assets are technically owned by the Trust, rather than by you as an individual. All of the supposed benefits of the Trust come into fruition when you die. The promoters state that your assets automatically pass to your beneficiaries without the delay or expense of probate. The Trust also claims to ensure privacy and save thousands of dollars in attorneys fees. Finally, most of the ads also mention how the Revocable Trust will save on estate taxes.
When you cut through the sales hype, the reality is that a Trust is not a “magic solution.” That’s not to say that the benefits of a Trust aren’t desirable. They are. It’s just that the Trust isn’t for everybody, as the promoters are claiming. Rather, the Revocable Trust is just one tool to be considered when planning your estate. Often it is the best choice, but sometimes other options are better.
There are some very good reasons for drafting a Trust, however, it is important to get good advice from an estate planning attorney before making your estate planning decisions. In all cases it is risky to pursue estate planning with “do-it-yourself” kits. The estate tax results could be disastrous. Estate planning is among the most important decisions of your life. Pursuing it wisely is yet another gift to your heirs.
Jeffery J. McKenna is a local attorney serving clients in Nevada, Arizona and Utah. He is a shareholder at the law firm of Barney McKenna Olmstead & Peck, PC, with offices in Mesquite and St. George. If you have questions you would like addressed in these articles, you can contact him at 346-1615 or firstname.lastname@example.org.