One State’s Brochure Against Living Trusts: How ‘Bout Them Apples?

October 11, 2011
300px Apples8 One State’s Brochure Against Living Trusts: How Bout Them Apples?

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A colleague recently sent me a link to this pamphlet,  “Living Trusts:  Get the Facts!” from the Estates and Trusts Section of the Maryland State Bar and the Register of Wills Association of Maryland, circa 2004.  I did not even have to click on the link, because I was already well acquainted with it.

I will comment here on the advice provided in said document because I believe that we all must be careful about what we read, even if it comes from an accurate or trustworthy source.  Take the following for what it’s worth, as I am fully aware of two strikes against me (I use this baseball reference despite still reeling from the bitter Phillies’ elimination last week):

  1. It can be found on a Maryland State Government website, whereas I am but one individual trying to eke out a living.
  2. It is the product of a group of Maryland estate attorneys, whereas I am but one individual who dares to use this forum to possibly counter the group’s collective wisdom.

However, see if you agree that the piece’s conclusion appears to be based on a logical fallacy or two:

Summary of the Brochure

The brochure is based around correcting six common claims made about living trusts, and why, in most cases, the use of a living trust is inappropriate.  Let’s summarize these claims and the brochure’s counterclaims in bold below, and then I will write a brief, non-bolded evaluation after each.

  • Claim:  Living Trusts reduce taxes.
    • Counterclaim:  No they don’t! 
    • The counterclaim is true.
  • Claim:  Probate Must Be Avoided.
    • Counterclaim:  Probate isn’t so bad in Maryland. 
    • The counterclaim is true.
  • Claim:  Only Living Trusts can be used to manage affairs and avoid guardianship.
    • Counterclaim:  Other tools can do this too. 
    • The counterclaim is true.
  • Claim:  Living Trusts save time and money.
    • Counterclaim:  Living Trusts often cost substantially more than a will.
    • The counterclaim is true.
  • Claim:  Living Trusts can be used to avoid creditors.
    • Counterclaim:  Wrong!
    • The counterclaim is true.
  • Claim:  Living Trusts ensure privacy.
    • Counterclaim:  Not necessarily, Jose!
    • The counterclaim is true.
  • Conclusion:  Use living trusts sparingly, if at all.

Yes, I agree with all six counterclaims listed above.  So what’s the problem?

An Analogy Using Apples

Let’s respond with the following analogy.  Say I put out a brochure with the following claims about apples:

  • Claim:  Apple seeds are planted in the ground and the ground is dirty.
  • Claim:  Apple orchards have a lot of bees, and bees sting.
  • Claim:  Apples are transported in refrigerated trucks, but on occasion the refrigerators break down.
  • Claim:  During growth and transport, bugs and worms can be found in apples.
  • Claim:  Isaac Newton was once hit on the head with an apple.
  • Claim:  When apples go bad, they taste terrible; there is no guarantee that an apple won’t go bad.
  • Conclusion:  Apples should be eaten sparingly, if at all.

While my claims about apples are true, the picture drawn above is perhaps incomplete.  None discuss any of the benefits that apples provide, and each touch upon fairly remote circumstances as the main rationale for avoiding them.

There’s More to Apples (and Living Trusts)

Similarly, “Living Trusts:  Get the Facts!” also seems to “cherry pick” its points to make its conclusions.  While it contains good information to contradict the claims of the many hucksters who try to sell living trusts, it avoids discussing very many benefits of the tool, including this non-exhaustive list:

  • While probate may be simple in Maryland, it still involves a period of delay between a person’s death and the transfer of assets to beneficiaries.  Assets can be transferred more quickly with living trusts.
  • During incapacity, an existing living trust can provide continuity and protection in one’s financial matters, as well as proof to financial or healthcare institutions of the trust creator’s approval of its use.
  • Living trusts cost more to set up than wills at the outset.  However, in many situations, they can also result in reduced estate administration fees that greatly exceed the present difference in cost between setting up a will and a living trust.
  • Many financial institutions accept a summary of the living trust rather than the full document.  Therefore, privacy can certainly occur.
  • Living trusts can provide excellent protection of assets against the claims of creditors and “predators”.

Boiled down, the brochure’s main argument appears to be that “some have made certain incorrect claims about living trusts, so living trusts should mainly be avoided.”  Unfortunately, the failure of the pamphlet to address any advantages seems to create a “red herring”, or “Chewbacca Defense”, against living trusts.

Conclusion

It is not my goal to state here that living trusts are appropriate for everyone.  Indeed, I have instead recommended wills to clients in more than one case.

However, the authors of the brochure seemed to have a bias against living trusts that they wished to pass onto the reader.  Perhaps this partiality is not appropriate for a public, governmental website intent on providing helpful information to the community.  Instead, maybe the Maryland Register of Wills should upgrade the piece to bear more informative “fruit”.

 One State’s Brochure Against Living Trusts: How Bout Them Apples?
 One State’s Brochure Against Living Trusts: How Bout Them Apples?

Scott

Scott R. Zucker, Esq. is the owner of The Zucker Law Firm PLLC, located just outside the Capital Beltway in Annandale, within five miles of the City of Fairfax, the county seat of beautiful Fairfax County, Virginia. The firm focuses mainly on estate planning services for Virginia, Maryland and Pennsylvania clientele, and seeks to do so in an affordable and approachable way. People interested in learning more can contact Scott by phone or email.

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