“Avoid probate with a living trust!” We hear this ringing claim sounded from our local hotels and senior centers, where traveling attorneys and salespeople hold seminars to pitch their product. But before you pay $1000 to $2000 and place all of your assets into trust, you should find out – with considerable deliberation – what a living trust is, and how it really affects your estate.
The objective of a living trust is indeed to avoid “probate.” Probate is the process of proving and registering a will with the Court. In Crawford County, the cost of probating a will in an estate valued at $150,000 would be $134. (Some states, such as California, have much higher probate costs, and in those states, general avoidance of probate is quite justified.) Of course, there are other costs related to estates, including inheritance taxes and administration fees. But these costs are almost entirely unaffected by whether or not the estate proceeds through probate.
Avoiding probate is useful in certain situations, and “revocable inter vivos trusts” (living trusts) are not new. For example, some people use such a trust to allow a corporate trustee to manage their assets. Also, when real estate is owned in another state with a high probate cost, it is used to avoid limited probate in that state. But a living trust is not for everyone. When presented as a “one size fits all” solution to estate planning, it is often unneeded, and in the worst cases, a scam.
That’s right, a scam. Attorney General Tom Corbett has issued the following statement on the Pennsylvania Attorney General’s website: “Unfortunately, when it comes to living trusts, unscrupulous con artists are ready to play on consumers’ fears of the unknown. In some cases, consumers – mostly elderly – are solicited by phone or mail to attend seminars or to set up in-home appointments to discuss living trusts. Living trusts are then marketed through high-pressure sales pitches which prey on the fear that assets will be tied up indefinitely or that estates are prone to heavy taxes and fees if a living trust is not in place.” [See: www.attorneygeneral.gov, “Beware of Living Trust Scams”]
In planning your estate, whether by simple will or trust, consult professionals with whom you have familiarity and confidence. Don’t hesitate to talk to your local accountant or financial advisor, who may provide an objective point of view. Never allow yourself to be rushed into a decision. Seek counsel that will be here today, and here tomorrow.
Letter of the Law
March 20, 2006
Straight Talk on Living Trusts
By Ross C. Prather, Esq
- Letter of the Law
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Using Caution In Lending Motorized Possessions To Others
Watts & Pepicelli, PC
814-336-4000
Past President of the Crawford County Bar Association;
Member of PA Bar Association;
Association of Trial Lawyers of America
Member of Trial Lawyers of Pennsylvania -
The Importance of Gathering Evidence at the scene of an Accident
Watts & Pepicelli, PC
814-336-4000
Past President of the Crawford County Bar Association;
Member of PA Bar Association;
Association of Trial Lawyers of America
Member of Trial Lawyers of Pennsylvania - Straight Talk on Living Trusts Ross C. Prather is a partner in the Law Firm of Prather, Prather and Higgins, LLP and concentrates his practice in Estate Planning and Administration, and Criminal and Civil Litigation. He received a B.A. from the College of Wooster, a J.D. from Drake University, and an M.A.T. from Brown University. He is the former Chief Public Defender of Crawford County, and is currently the Vice President of the Crawford Central School Board.
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Contracting To Build Your Own Home
John Swick
Allegheny College,BA 1986
Duquesne University, MBA 1993
Duquesne University, JD 1994 -
The Importance Of Choosing Full TORT Coverage
Watts & Pepicelli, PC
814-336-4000
Past President of the Crawford County Bar Association;
Member of PA Bar Association;
Association of Trial Lawyers of America
Member of Trial Lawyers of Pennsylvania
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Family Law Mediation and Arbitration
The Pennsylvania State University, 1968
Duquesne University School of Law, 1977
Member – Crawford County, Pennsylvania and American Bar Association -
PROPERTY OWNER'S LIABILITY FOR ICE AND SNOW ON SIDEWALKS
Watts & Pepicelli, PC
814-336-4000
Past President of the Crawford County Bar Association;
Member of PA Bar Association;
Association of Trial Lawyers of America
Member of Trial Lawyers of Pennsylvania
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Using Caution In Lending Motorized Possessions To Others
Watts & Pepicelli, PC
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