Living trusts have some disadvantages. These include:
- Preparation of a living trust oftentimes costs more than a will. However, the difference in costs may not be significant if the will is complex.
- Since living trusts do not come under direct court supervision, there is no trustee oversight. Accordingly, a trustee who does not have the settlor's best interest may be able to take advantage of their position.
- To be effective in avoiding probate, assets have to be transferred to the trust. This involves additional costs and a lot of paperwork, which is not required for less elaborate estate plans.
- Most lenders are hesitant to lend to a trust; thus, if a settlor wants to refinance a real property that is owned through a trust, they may have to transfer the property out of the trust before refinancing, and then put it back into the trust. There are, however, a few lenders who do not require that property be taken out of the trust when it is refinanced.
To know what estate litigation tool is right for you, contact the Law Offices of David A. Shapiro, P.C. at 310-853-1554.
*This blog entry was not written by an Attorney and should not be construed as professional legal advice.