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Living Trusts |
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Living Trusts |
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Revocable
Living Trust
ControlWith a Revocable Living Trust, you retain control of your assets. You deal with your assets the same as you do currently. You may take assets out of your trust, amend your trust, or even terminate you trust. You are the Settlor (owner), Trustee (controller), and Beneficiary. If incompetent, the other spouse continues on as the Trustee. Your Successor Trustee, whom you name in the beginning, takes over for you when both die or become incompetent.Avoiding ProbateIf your assets add up to more than $500 to $50,000 (depending on where you live) then your heirs will probably not go through Probate. Probate is the court process, which changes legal ownership of your assets to your heirs at your death. Probate is required whether you have a will or not. Probate is required for people, not Trusts.The Probate process is time consuming and costly. It is also very public. Probate can take anywhere from 6 months to 3 years or more.Average Probate fees range from 3% to 10% of the total value of all your assets. The exact cost depends on the lawyer.Since
the Revocable Living Trust is a separate entity, it holds title to your
assets. Therefore, when you die, the Trustee simply distributes the assets to
the people you name in your Trust.
Avoiding Conservators and Guardians
Conservators
and Guardians are people whom the court appoints to protect you and your
property. With a Revocable Living Trust, you designate who you want to
protect you and your property. The Revocable Living Trust details what powers
and duties they will have.
Reduce or Eliminate Estate TaxesThe beginning marginal tax bracket for federal estate taxes starts at 18% and goes up to 55%. This means that our old Uncle Sam could take half of each additional dollar of growth in your estate.Under
current federal estate tax law, each one us can pass to our heirs up to $675,000
through the Unified Tax Credit, without paying any federal estate tax. But for
married couples with estate worth between $675,000 and $1,350,000, a Revocable
Living Trust can eliminate estate taxes.
For
estates over $1,350,000, other estate planning tools and techniques are required
in order to eliminate or at least reduce federal estate taxes.
The Unified Tax Credit will increase each calendar year until the year 2007 when it will cap at $1,000,000 each!PrivacyYour Revocable Living Trust is a private document. Who gets what and when is your business and not the public's. Unfortunately, with a will, the transfer of assets to your heirs is public information.Asset ProtectionThe Revocable Living Trust does not in itself, give immediate asset protection to the Settlors. The law in this area of asset protection is delicate and changes from time to time, so make sure your advisor understands the issues in this area of planning. |
Copyright © 2001 Safe Estate Plans, LLC.
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