Letter Re: Revocable Trusts

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Hugh,

I am an attorney. I believe in trusts and have prepared many. A trust will not prevent estate taxes, but it can help keep them low. However, remember that you have to be rich to worry about taxes anyway. A well-drafted Will can do the same tax planning that a trust can do. The benefits of a trust are:

  1. Privacy. (You might need to give it to the title insurance company or the investment company, but it won’t be available to anyone who is just being nosy, as a Will filed at the Courthouse would be.)
  2. No probate. (There’s that privacy issue again and with an extra layer, BUT you have to have made the effort to transfer ownership to the trust or you will have to have a probate just to create the trust. Well, you’ll be dead, but your family will have to go to Court.)

If you are wealthy enough to have tax issues and you elect a do-it-yourself trust, you were penny wise and pound foolish. Consult a good estate planning attorney and CPA. I’m not sure an Internet trust will do what you need. There are as many issues that need to be addressed in estate planning as there are members of your family. I have seen some trusts done even by attorneys that were “scary”. Don’t leave a mess for your family; know what you are doing or don’t do it. Also, a trust can have any name– the Paper Lantern Trust, the Yellow Brick Road trust, etc. It doesn’t have to be the Bob and Betty Brown trust. I highly recommend trusts (I have one), but please… do your homework and don’t just grab the first thing you find. – NW Lawyer

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