Estate planning is confusing enough without the myths provided over Facebook. This can be especially true when it comes to trusts. Indeed, the word, trust, can often cause one’s eyes to glaze over, even an attorney. But, of course to create one, one will definitely want to contact an attorney, and hopefully, dispelling these myths will make the process easier.
One needs create a trust to avoid probate
No one wants to go through the probate process. But, creating a trust is not the only way to avoid probate court and the costs and delays associated with that process. First, remember that jointly owned property does not go through probate. Joint accounts, like bank accounts, simply pass to the joint account holder.
Second, many financial instruments, like annuities, life insurance, 401(k)s, IRAs, etc. name beneficiaries, which also avoids the probate process. Of course, this probate avoidance only applies if that beneficiary is still alive when they inherit those accounts.
Finally, some accounts allow owners to simply name a beneficiary that is “payable on death,” including brokerage accounts. These are all steps on can take in the estate planning process that do not require a trust to avoid probate.
Trust automatically avoid estate taxes
A trust alone may not necessarily avoid estate taxes, and if one is concerned about estate taxes, that means they should be crafting their estate plan with an attorney. A trust definitely can avoid estate taxes, but they must be strategically crafted to accomplish that goal.
For those residents in Vero Beach, Fort Lauderdale, and Orlando, Florida, estate planning is essential. Since everyone will eventually pass, everyone needs to plan for that passing.