A free revocable living trust template is an important legal tool that is commonly used for the purpose of estate planning. Know about the top 6 Common Misconceptions regarding Revocable Living Trusts.

1. Revocable Living Trusts Only Benefit the Wealthy

One of the most common misconceptions is that a revocable living trust is only beneficial for the wealthy. This is not entirely accurate! While these trusts are indeed valuable estate planning tools for individuals with significant assets, they also offer advantages for people with more modest estates. They help to avoid probate, protect privacy, and ease the management of assets in case of incapacitation.

2. No Will is Needed After Establishing a Trust

A dominant belief is that once a trust is set up, the need for a will evaporates. This is a misconception. While a trust is a key part of an estate plan, there are assets that you might not transfer to a trust (like personal effects). For these, a will or some similar legal documents online will direct those assets to the trust after your passing.

3. it is Complex and Time-Consuming to Establish a Trust

it is often assumed that setting up a trust is a complex and burdensome process. However, it is not! An experienced estate planning attorney can help you navigate this process with relative ease. The time invested initially would pay off by preventing future complexity and complications for your heirs.

4. Trusts are Untouchable

Another misconception is that once assets are placed into a trust, they are untouchable. In case of a revocable living trust, this is simply untrue. The grantor or owner of the trust retains control and may alter the trust or withdraw assets during their lifetime.

5. Medicare Seizes Assets in a Revocable Living Trust

Fear not, because this is a myth. A revocable living trust in Ohio does not safeguard assets from Medicare requirements. If the costs of long-term care become a factor, certain types of irrevocable trusts can offer some protection, but revocable trusts do not come into play here.

6. Trusts Equal Tax Savings

Not always! A living trust does not provide a tax shelter. It is a common misconception that by simply moving assets into a trust, you can avoid paying taxes. The reality is, during the grantor's life, all items of income, deduction, and credit are reported on the grantor's individual income tax return.

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Carl writes often about legal drafting and help.