Trusts are a powerful tool for estate planning, but many people misunderstand how they work. There are several myths surrounding trusts that can lead to confusion. In this post, we’ll address some of the most common misconceptions about trusts in New York.
Trusts are only for the wealthy
One common myth is that only wealthy people need trusts. In reality, trusts are beneficial for many people. They help with avoiding probate, protecting assets from creditors, and managing property for minors. Trusts are flexible tools for anyone who wants more control over how their assets are distributed.
A will and trust serve the same purpose
While both a will and a trust are essential estate planning tools, they serve different functions. A will outlines how your assets will be distributed after death, while a trust can provide more control over your assets, both during your lifetime and after. A trust can also avoid probate, which can be time-consuming and costly.
Trusts are difficult to set up and manage
Many people think setting up a trust is complicated. However, the process can be straightforward, and once created, a trust requires little maintenance, especially a revocable trust. With proper guidance, you can ensure your trust fits your needs without much hassle.
You lose control over your assets in a trust
It’s a common misconception that once you transfer assets to a trust, you lose control. With a revocable trust, you can continue to manage your assets and even make changes if needed. You remain in control during your lifetime.
Trusts are only for post-death asset distribution
Trusts aren’t just for distributing assets after death. A living trust can help manage assets if you become incapacitated, allowing someone you trust to step in without needing a court-appointed guardian.
Trusts are flexible tools that can benefit individuals from all financial backgrounds. Understanding these misconceptions helps you make better estate planning decisions.