Dispelling misconceptions around trusts

Many residents in Oklahoma who are involved in estate planning may be interested in learning about trusts. A recent report suggests that there are a number of misconceptions about trusts, and it also argues that the devices are useful in many cases.

One reason why a person might hesitate to establish a trust is the assumption that the device requires a lot of effort to be effective. To many individuals, the necessity of transferring the ownership of assets from the benefactor to the trust can be daunting and might appear complicated. However, some assets are transferable with the relatively simple payable-on-death or transfer-on-death forms. These can be used to transfer the assets to a trust while avoiding probate.

In addition, many people believe that trusts are overly expensive to set up and are only useful for individuals who are exceptionally wealthy. The article concedes that the process of establishing the trust might be expensive, but suggests that those expenses may be offset by the benefits a trust might provide because the cost of probate can be very high in some cases.

Contrary to popular belief, trusts might also be useful for a person who is still alive. These devices are flexible and can provide security for a benefactor and his or her family financially. The instructions guiding the disbursement of funds can be detailed and can provide for a number of circumstances.

The benefits of trusts can be numerous, and an individual who is planning his or her estate might benefit from discussing the devices with an attorney. An attorney could help a client understand the different ways that a trust might bring the client closer to their estate planning goals.

Source: Daily Finance, "3 Myths About Trusts That You Can't Afford to Believe", Dan Caplinger, September 20, 2014

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