Bethesda Estate Planning Attorney Discusses 5 Misconceptions About Trusts

When it comes to estate planning in Maryland, there are many misconceptions.  Over the years, I have noticed some common themes in the way some people think about Trusts. In this post, I will discuss 5 common misconceptions I regularly encounter when helping people in Bethesda and Upper Marlboro get their financial affairs in order.

Misconception #1: Revocable Living Trusts are only for large estates. No.  Revocable Living Trusts are for anyone who wants to avoid costly conservatorship and probate proceedings.  In appropriate cases, people with small estates can benefit from a Revocable Living Trust.  People with larger estates can benefit even more.

Misconception #2: A Revocable Living Trust is a public document. No.  Your Revocable Living Trust can remain private because it does not have to be recorded or published in any way.  The only people who will know about your Trust are the people you choose to tell.  However, some professionals may need to review your Trust to confirm that your trustee is authorized to take a particular action.  This review is for the protection of all beneficiaries of the Trust.

Misconception #3: A Revocable Living Trust cannot be changed. Wrong.  You can change and even revoke your Revocable Living Trust any time you wish.  The decision is entirely up to you.

Misconception #4: A Revocable Living Trust must have a separate tax return. No.  As long as you are a trustee or co-trustee of your Revocable Living Trust, it does not need a tax return of its own.  Your personal tax return, which uses your social security number, is sufficient for the IRS.

Misconception #5: When you set up a Revocable Living Trust, you lose control of your assets. No. When you set up your Revocable Living Trust, you simply name yourself and/or your spouse as Trust managers, called “trustees.”  In this way, you never give up control.

 

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Kinsey Law Group, P.C. was formed to focus on the needs of families.  We are dedicated to assisting you in the areas of Estate Planning and Assisted Reproduction/Surrogacy.  If you have questions or concerns, you’re invited to call 301-968-1630 or send an e-mail any time, without cost or obligation.

Locations: Montgomery County (Bethesda, Maryland); Prince George’s County (Largo, Maryland) and Washington, D.C.

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