Are There Any Downsides to a Revocable Trust?
While revocable trusts offer many benefits, there are two main drawbacks to consider.
1. Higher Upfront Cost
A trust costs more to set up than a will—often twice as much.
The cost of probate (avoided with a trust) comes from your estate after death, while trust creation is an out-of-pocket expense now.
Despite the initial cost, the long-term benefits outweigh the expense.
2. The Need to Fund the Trust
After setting up a trust, you must actively transfer assets into it.
Funding steps include:
Deeding real estate into the trust.
Naming the trust as beneficiary of bank accounts, life insurance, and possibly retirement accounts.
Assigning business interests (LLCs, etc.) to the trust.
Failing to fund the trust properly can lead to probate issues, defeating its purpose.
Key Takeaway
While cost and effort may seem like drawbacks, the protection, flexibility, and probate avoidance provided by a trust make it a superior estate planning tool.
This video is for informational purposes only. As always please get professional help before making decision on how to protect your assets.
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