A lifetime trust, also known as a living trust, can be the difference between people controlling their estate and being subject to the expense, confusion, and problems that sometimes affect unplanned estates.
Nevertheless, a whole industry has grown around overselling living trusts when they are not really needed. Now, AARP and Kiplinger have gone in the other direction proclaiming that trusts are expensive and not needed. In the June 2013 Personal Finance issue, the newsletter gives really bad advice to avoid trusts.
Frequently, as a tax attorney, I get a call from clients saying “what can we do with Mom’s assets? She has dementia, and is being influenced by an acquaintance or family member to give them chunks of money.” Unfortunately, it is too late. Unless the family wants to go to court with an expensive and embarrassing lawsuit to prove that their mom is incompetent, there is not much that can be done.
If, however, when the signs of problems first started appearing, a trust would have been formed, and the assets transferred, these issues would have been avoided and Mom would be protected.
The best Mother’s Day gift might be to make sure your Mom (and Dad too!) goes to a tax and estate attorney to review all of the options: Will, Revocable Trust, Durable Power of Attorney.
Happy Mother’s Day!