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Revocable Living Trusts

What Are The Disadvantages Of A Revocable Living Trust?

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While living trusts can have all the advantages described in the above section, they may not be all they're often said to be. Consider the following:

Set-up costs

A living trust is generally more expensive to set-up than a Will. The expenses of a trust include both legal fees to establish the trust and the costs of transferring title to property to the trust. While there are self-help books and software programs that will tell you how to establish a trust on your own, we do not recommend a do-it-yourself approach in this situation. Mistakes can be expensive to correct while the trust is revocable, and cannot be fixed after your demise.

Ongoing costs

  • If another person is named as trustee, there may be a trustee fee to pay.
  • Any new assets acquired will need to be titled in the name of the trust.
  • At the grantor's death, the trust will need to obtain a separate tax identification number and file a separate tax return.


Conflicts can arise between the beneficiaries and the trustee.

No protection from creditors

Contrary to what trust salespeople sometimes claim:

  • Many courts have ruled that assets transferred to a revocable living trust are generally not shielded from past, present or future creditors.
  • State laws that place a time limit for creditors to make a claim against your assets being passed by a Will generally do not apply to living trusts.

If you claim bankruptcy

Depending on the state in which your property is located, putting your home into a living trust might jeopardize an exemption that allows you to keep a residence (a homestead exemption) even after bankruptcy.


When a Will is probated, the process of distributing your assets in accordance with what you wanted is supervised by a court. There is no such supervision with a trust.

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