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Common misconceptions about wills and trusts

Robert D. Schwartz
YourNews contributor

STUART — It is difficult to sort through all of the confusion about estate planning documents and the probate process. There are many frequently perpetuated myths about wills and trusts circulating around. It is important to make sure you have your facts straight. If not, you may accidentally leave your family in a troublesome position.

For instance, many people believe that if they have a Last Will and Testament prepared, their estate will avoid probate. This is incorrect. The primary purpose of the probate court is to make sure that a decedent’s assets are passed to the proper heirs and beneficiaries.

The will serves as a statement to the court of the decedent’s wishes with regard to where that person wants his or her assets to be distributed. In Florida, even with a will, your heirs are required to get a lawyer and go to court in order to receive their proper inheritance. Everyone should still have a will, but additional estate planning, including the use of a revocable living trust, is necessary to avoid the probate process.

It is also typical for people to think that they do not need to do any estate planning because they are not worth enough money. Many people think that if their estate is less than $5,450,000 — the amount of the Federal Estate Tax Exemption amount — then there is no need to do a revocable trust. That could not be further from the truth.

That number is the amount that can pass to beneficiaries free of federal estate tax, but there are still many issues that may come up as a result of one’s passing. Any amount of money, no matter how much or how little, will have to go through some form of probate without proper planning. As most people are aware, probate can be expensive and time-consuming.

Commonly, people are concerned that putting their property into a revocable trust will limit what they can do with the property during their lifetime. A properly drafted revocable trust is completely amendable and revocable during the lifetime of the person who creates it. Anything put into the trust is under your complete control as trustee of the trust. Therefore, you have no limit to what you can do with a property that is put into a revocable trust.

Another issue that is frequently asked about is that of filing a separate tax return for a revocable trust. Many people think that if you have a revocable trust, you have to file a completely separate tax return. A revocable trust is not a separate entity for tax purposes, therefore filing a separate tax return is not necessary.

The proper planning can make things easier and less expensive for your loved ones. Wills and trusts are tools that can be extremely helpful in accomplishing your estate planning goals. Make sure that you ask a professional and do not fall victim to the misconceptions and incorrect information that is constantly circulating around.

Robert Schwartz