• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Parman & Easterday

Oklahoma Estate Planning Attorneys

Call Now: (405) 843-6100 |
(918) 615-2700

Attend an Education Program-Oklahoma City Area Attend An Education Program in the Tulsa Area
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • What Our Clients Say
  • Estate Planning
    • Asset Protection
    • Business Succession Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • IRA and Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Powers of Attorney
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law
    • Emergency Medicaid
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Asset Protection Worksheet
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Edmond Elder Law
        • Oklahoma City Elder Law
        • Overland Park Elder Law
        • Yukon Elder Law
      • Medicaid
      • Nursing Home Resources
    • Estate Planning
      • An Overview of Estate and Gift Taxes
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s FAQs
      • Asset Protection Planning
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Inheritance Planning for Minors
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Nursing Home Asset Protection
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • Probate Checklist
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Probate Resources
      • Midwest City Probate
      • Moore Probate
      • Oklahoma City Probate
      • Overland Park Probate
    • Published Books
    • Pre Consultation Form
  • Communities We Serve
    • Edmond
    • Midwest City
    • Moore
    • Norman
    • Oklahoma City
    • Yukon
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
Home » Estate Planning » Debunking Myths About Trusts

Debunking Myths About Trusts

August 20, 2020 by Larry Parman, Attorney at Law

living trustA lot of people harbor misconceptions about certain aspects of the estate planning process. This is very common when it comes to the way that many folks think about trusts. Let’s look at some of the myths that circulate so you can go forward with a fresh perspective.

Trusts Are Only For Very Wealthy People

Individuals that have estates that are valued at more than $11.58 million are exposed to the federal estate tax. These folks do use trusts to gain tax efficiency.

However, there are numerous different types of trusts. Some of them would not help someone that is concerned about the impact of the estate tax.

You Lose All Control of Assets You Sign Over to a Trust

When people have a little bit of information about anything, there can be some confusion based on a shred of truth.

The most common trust used by most people is a revocable trust.  In that trust, you retain the right to amend, modify, even revoke the trust in its entirety during your lifetime, assuming you are competent to do so.  Therefore, you would not lose any control if you establish a revocable living trust.  All assets owned by the trust would still use your Social Security number so there are no new tax forms to file.

Revocable trusts often include provisions to minimize any federal estate tax you might owe.  So, getting back to the estate tax, upon your death a portion of your revocable trust would become irrevocable to assure maximum use of your federal estate tax exclusion.

If you are in this situation, the assets allocated to this type of trust would not be part of your taxable estate. As the name indicates, you wouldn’t be able to revoke the trust, and in most instances, you would not be able to change the terms in any way.

This does not mean that you would not have control over certain important details when you establish the trust, and this is why they are effective. That’s a subject for another blog post.

Trusts are Complicated to Administer

This is another falsehood. When you hear all the facts, you will see why revocable living trusts are very commonly used, it has a lot to do with the administration process.

When a will is utilized, rather than a trust, it would be admitted to probate by the executor. This is a legal process that takes place under the supervision of a court. Depending on the jurisdiction, it will typically take about eight to eighteen months for probate to run its course.

Without court permission, no inheritances can be distributed during probate, and there are considerable expenses that accumulate. Probate is a public proceeding, so interested parties can access records to find out all the details. Plus, anyone that wants to challenge the validity of the will can come forward during probate.

If you use a revocable living trust instead of a last will as the centerpiece of your estate plan, all of these drawbacks are minimized.  While you are alive and well, you can act as the trustee and the beneficiary, so you would maintain total control of the assets titled in the name of the trust.  For the trust to work to your advantage, it is critical your assets either be titled in the name of the trust or connected to the trust via a proper beneficiary designation.

In a real sense, there would be no difference in your day-to-day life with regard to your ability to use your resources.

You would name a successor trustee in the trust declaration, and your heirs would be the beneficiaries. After your passing, the trustee would distribute trust assets to the beneficiaries, and the probate court would not be involved.

This is one of the benefits that living trusts provide, but there are a number of others.

Trusts are Expensive to Create

Compared to what?  Yes, there are obviously going to be some legal fees involved if you engage an estate planning attorney to help you create a living trust. However, all things considered, the investment will pay dividends, and it may maximize the value of your estate in the long run.

Download Our Estate Planning Worksheet!

Our firm has prepared a very useful worksheet that you can go through to gain a more comprehensive understanding of the estate planning process. It is being offered free of charge, so we urge you to take advantage of this opportunity to build on your knowledge.

To obtain your copy, visit our worksheet access page and follow the simple instructions.

 

 

  • Author
  • Recent Posts
Larry Parman, Attorney at Law
Larry Parman, Attorney at Law
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
Larry Parman, Attorney at Law
Latest posts by Larry Parman, Attorney at Law (see all)
  • Estate Administration 101 - February 2, 2023
  • Why Do You Need an Elder Law Attorney? - January 31, 2023
  • Inheritance Planning for Blended Families - January 26, 2023

Filed Under: Estate Planning Tagged With: irrevocable trusts, revocable living trusts

Other Articles You May Find Useful

Estate Administration 101
wills and trusts
4 Things Trusts Do That Wills Can’t Do
advance estate planning property liquidation
Downsizing Can Be Part of Your Estate Plan
Now That Mid-Terms Are Over, Let’s Talk Taxes
ancillary probate
Prevent the Nightmare of Ancillary Probate
Common Mistakes in Estate Planning – Part V

Primary Sidebar

Parman & Easterday, LLP

DOWNLOAD OUR FREE ESTATE PLANNING CHECKLIST

SUBSCRIBE TO OUR BLOG

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Where We Are

OKLAHOMA CITY, OK
13913 Quail Pointe Drive, Suite B
Oklahoma City, OK 73134
Phone: (405) 843-6100
Fax: (405) 917-7018

MAP

parman_sidbr_map

Where We Are

TULSA, OK
Memorial Place 7633 E. 63rd Place
Tulsa, OK 74133
Phone: (918) 615-2700

MAP

parman_sidbr_map

Office Hours

Monday9:00 AM - 5:30 PM
Tuesday9:00 AM - 5:30 PM
Wednesday9:00 AM - 5:30 PM
Thursday9:00 AM - 5:30 PM
Friday9:00 AM - 12:00 PM

Footer

footer-logo

The information on this Oklahoma Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Oklahoma City Estate Planning Attorneys at Parman & Easterday offer estate planning services in the Oklahoma City, Oklahoma and surrounding areas. Contact us for help today.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys


© 2023 American Academy of Estate Planning Attorneys, Inc.
  • Facebook
  • LinkedIn
  • Twitter
  • YouTube