If Revocable Living Trusts Are So Great, Why Doesn"t Everyone Have One?

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Question: When discussing Living Trusts, I have often heard the following: "If trusts are so great, why doesn't everyone have one? I don't know anyone who has one.
Maybe they are not legal in my state.
" Actually, you may be surprised at how many people have living Trusts.
They are more common than many people realize.
Folks don't often discuss their estate plan with others.
Trusts are perfectly legal in every state (with the possible exception of Louisiana).
Answer: There are many reasons why people do not have Living Trusts.
a.
They don't know about them.
Unfortunately, there is no place where estate planning is taught, except, maybe, law school.
Our public schools tend to avoid teaching anything practical about actual living.
We can argue if that's their job, but that is not the issue here.
The issue is that most of us must learn about things like estate planning from family, friends, associates, or professionals.
This is not a dependable source of information, even from professionals.
Professionals may have their own agenda.
I suspect many of my fellow attorneys avoid explaining everything to their clients in order to protect the "mystery" of the law.
It makes them more valuable to you.
They may avoid telling you about Living Trusts because a trust does not protect their own agenda; they want to handle the probate of your estate and collect that fat probate percentage fee.
With a Living Trust, your heirs won't need a lawyer, and they don't like that.
b.
They don't have enough assets to need any type of estate plan.
Sadly, there is a large percentage of the population of our country who own nothing of value.
Most states have a threshold before probate is required.
In California, the probate threshold is $75,000.
In Oregon, it's $50,000 in personal assets or $150,000 in real estate assets.
Every state is different and these laws change with inflation.
You can easily see that the minimum is easily met.
$75,000 won't buy you a tool shed in Los Angeles.
If you own a home almost anywhere, you probably need a Living Trust.
If an estate is smaller than the state probate threshold, no probate is required.
The only reason someone with an estate that small would desire an estate plan would be to give a specific item to a specific person, or to disinherit someone.
Otherwise, no estate plan is needed for these people.
c.
People procrastinate.
People do not like to think about dying.
It's not a pleasant subject.
Even if they know they need a Living Trust, they don't want to deal with it.
Some people even believe that if they plan for their death, they will die.
Sometimes they are just not sure what to do.
Nearly every client has said to me something like, "I've been thinking about doing this for a long time.
I just finally got around to doing it.
" Procrastination is the biggest obstacle to estate planning.
d.
They are afraid they cannot afford a Living Trust.
Many attorneys charge thousands of dollars to prepare a Living Trust, and many people do not have that kind of money in their budget.
A trust need not cost that much, however.
Here's something many attorneys won't tell you.
Much of the language in trust documents is the same in every trust.
Trusts are almost universally prepared on computers that remember all that language.
The preparer's job is to fill in the personal details for each individual.
The preparer does not start from scratch for each trust.
Revocable Living Trusts are not new.
They have been around longer than the United States of America.
Compared to other areas of the law, trust law is fairly stable and doesn't change very often, other than estate tax considerations.
Living Trusts have become more popular in recent years as the probate process has slowed to a crawl and become a quagmire of pain and expense.
They are much more common than most people realize.
And they will benefit nearly everyone.
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