So for many people, especially the elderly, it's a legal document worth having.
Cost: $100-$200
Living Trust
In a recent column, The Bottom Line noted a living trust distributes assets while avoiding probate. In some circumstances, such as when people own real estate in other states, that's true.
But Agranoff says it's often a costly, heavily marketed product with little value beyond a basic will.
"All the living trust does is add thousands of dollars of expense," he says. "And you still need a will. Another problem is most people think avoiding probate means avoiding probate taxes, or death taxes or estate taxes. It simply isn't so."
Agranoff has posted on his law practice's website warnings about living trusts and the seminars frequently used to sell them.
Agranoff says a living trust does not bypass Probate Court and that any tax savings are also available through a well-prepared will and other estate-planning tools.
"It has no income tax or estate tax savings," he says. "If it did, everybody would tear up their wills and that would be the end of it."
The first $5.25 million of a estate are exempt from federal estate taxes. In Connecticut, an estate is taxed after the first $2 million.
"How many people have those kinds of estates?" says David Marder, of Marder & DeFelice Law Offices in Vernon. "To spend $3,000 to $5,000 [on a living trust] to get a nice little folder to show what it looks like is very expensive."
Cost: $3,000 to $5,000.
Trusts
Unlike a living trust, a testamentary trust is created as part of a will and activated only on the person's death. A testamentary trust allows a person, even in death, to control assets through an appointed trustee.
"You have people come to you and say," says Agranoff, "'Well, look, when I die I don't want my husband to marry a floozy and give her all the money.' I say, 'Well, I'm sorry, ma'am, you can't give a gift with strings. There's no way to rule from the grave except with a trust'."
A testamentary trust is much cheaper, too.
"Do a simple will or even a simple trust, a testamentary trust, not a living trust," says Marder. "Wills with a simple trust will probably be under $1,500. And you spell out the very same things [you would in a living trust]."
Cost: About $1,500.
