• 24
  • May
    2010

Creating and selling living trusts is a growing area of consumer fraud. More and more unscrupulous people, calling themselves "investment advisors," sell what they claim are living trusts by using false or misleading statements.

People can end up paying thousands of dollars for "living trust kits" that are worthless.

To avoid being misled, what should you know?

  • Living trusts may not be the best way to avoid probate. They might be the best way, but there are other ways that you should discuss with an experienced estate planning attorney.
  • Living trusts don't automatically avoid probate. The living trust must be properly funded. If this is not done, the mere drafting of a living trust will not avoid probate.
  • You don't lose control of your assets in a living trust. Not until the owner's death or disability.
  • Living trusts do not help you qualify for public assistance. You can't put all your assets in a living trust, qualify for nursing home assistance, and let your heirs keep all your assets. If you could, everyone would have a living trust. Beware of this false sales pitch.
  • Living trusts don't change your investment options. No investments are off-limits to living trusts, and there are no investments available only to living trusts. If someone tells you differently, be very skeptical.
  • Living trusts are not hard to set up nor to operate. If someone tries to sell you on the idea that you will need their help to operate the "complicated" living trust, they are, at the very least, not setting it up properly.
  • Living trusts may be more expensive than wills. They do take longer to prepare and complete. Make sure you have your living trust set up by a qualified attorney. A living trust that is not done right will be even more expensive in the long run.

Source: Florida Today "Get the truth about living trusts" 3/10/08