Setting the record straight: Myths of the Living Trust

If you’re reading this, chances are you have already thought about setting up a living trust.

First, let's define the benefits of a living trust.

A living trust allows you to retain control over the trust property until death. Then, the trust is turned over to the successor trustee, chosen by you, to distribute the trust property according to your wishes. This helps to avoid probate, resulting in a faster and easier distribution to your beneficiaries without the additional costs that are often associated with probate. It also maintains your privacy since its provisions stay confidential, compared to a last will and testament, which becomes a matter of public record.

You can update a revocable trust at any time during your lifetime. Revocable living trusts are used to protect your property until your beneficiary is mature enough to make wise decisions about their inheritance.

Next, let’s delve into some common myths about a living trust.

Myth #1: Living trusts are only for the wealthy.
While it is true that many wealthy people set up trusts, it doesn't mean that this option is only for the rich. In fact, many people with average incomes find living trusts to be extremely beneficial; especially those with children or dependents.

Myth #2: Living trusts only benefit beneficiaries, not the people making the trusts and not you, the grantor.
In fact, a trust allows for easier handling of your affairs if you become incapacitated, and makes things much less stressful for your loved ones that are left to care for your affairs when you're unable to do so.

Myth #3: You can't access funds once they're in a living trust.
This ignores the "living" part of the living trust. All funds and assets can be made as accessible as you wish, to you or to whomever you choose. You can structure the trust so that everything is accessible to you and you alone until your death.

Myth #4: Creating a living trust is expensive and complicated.
Setting up a trust may cost a bit more up front than a last will and testament, but the cost savings later can make up for these expenses in the long run.

Myth #5: A will can do the same things a trust can do.
A living trust adds flexibility. For one, it allows you to give your hard-earned money and property to those you care about while still protecting it for them. For example, if you have beneficiaries who you feel are not able to handle large sums of money on their own yet. Maybe your potential beneficiary is struggling with debt or an unstable marriage; a living trust may be the perfect instrument for you.

Have a discussion with estate planning attorney Chuck Bendig. Call 614.878.7777

Frequently Asked Questions About Pour-Over Wills

Does a pour-over will avoid probate?

No. Assets passing under a pour-over will generally require probate before they reach the trust. Assets already properly held in a living trust generally avoid probate. Other assets may pass outside probate through valid beneficiary designations or survivorship ownership.

Do I need a pour-over will if I already have a living trust?

A companion pour-over will is generally recommended. It provides instructions for covered probate assets left outside your trust and can name an executor and nominate guardians for minor children.

Can I name guardians in a pour-over will?

Yes. A pour-over will can nominate guardians for minor children. Court appointment and Ohio law still apply; the nomination does not automatically override a surviving parent's rights or every other consideration.

What happens if I have a trust but no pour-over will?

Assets already in the trust continue to follow its terms. Property outside it follows any effective beneficiary designations, ownership arrangements, or other will provisions. Probate property with no effective will provision may pass under Ohio intestacy law instead of your trust instructions.

Does a pour-over will override beneficiary designations?

Generally, no. A valid beneficiary designation on an account or insurance policy usually controls that asset's transfer. Review beneficiary designations alongside your will and trust so the arrangements support your overall plan.

Will a pour-over will reduce my taxes?

Not by itself. A pour-over will directs covered property into a trust. Tax consequences depend on the assets, trust provisions, beneficiaries, and applicable law. It should not be treated as an automatic tax-saving tool.

Can I rely on a pour-over will instead of funding my trust?

That is generally not a good substitute. Assets left to pass through the will may require probate, adding administration before the trust can receive them. Funding appropriate assets during your lifetime helps the trust perform its intended role.

What if I revoke or replace my living trust?

Have your pour-over will reviewed at the same time. Under Ohio Revised Code Section 2107.63, termination or complete revocation of the receiving trust before death invalidates the gift to its trustee under that provision. Your attorney can coordinate replacement documents and backup instructions.

Make Sure Your Will and Trust Work Together

A trust agreement, asset ownership, and beneficiary designations all affect how property passes after death. A pour-over will helps address gaps, but the documents need to work together.

Charles Bendig Law helps Ohio individuals and families with wills, living trusts, and probate matters.

To discuss creating a trust-based estate plan or reviewing an existing one, contact attorney Chuck Bendig or call (614) 878-7777.

I'm Chuck Bendig,

"For 40+ years, I've served Ohio residents. My private practice spans family law, estate planning, and personal injury cases. My commitment is rooted in genuine care for the individuals I serve."

Let's talk.