Living Trust

LIVING TRUSTS: Fact and Fiction

(Ed Hopper)
(Branch Operations Manager)
Raymond James (& Associates, Inc.)
http://www.raymondjames.com/edhopper
ed.hopper @ raymondjames.com

Living trusts are powerful estate planning tools that can help many people. Living trusts offer some advantages not available with devices other property planning. Living trusts are a way to manage and control property during life and distribute assets upon death. They are not, however, a panacea. Disciples of the living trust abound today. They tout the benefits of living trusts with the fervor of a television evangelist. Let's separate the facts about living trusts some of the fiction that is recommended.

At first, it is necessary to understand the nature of a life of confidence. Technically, living trusts are "revocable inter vivos" trusts. "If a trust is" revocable, "the person who establishes the trust can change all or part of the trust, provided that person is competent." Inter vivos "is Latin word for "life." At death, the living trust becomes irrevocable. Assets owned by living trusts are generally not included in the registration process at the time of death. The approval is the authority by which the assets of a deceased person are collected and distributed to its beneficiaries.

Fact or fiction, avoiding probate is always desirable? In a strict sense, this is fiction. Probate can be a lengthy and costly process. However, many states have adopted the Uniform Probate Code that modern dramatically simplifies the process. In addition, there are situations in which an accreditation process may be desirable.

Fact or fiction, living trusts, always save money during the administration of the estate? Avoiding Probate, Trusts life can save on legal fees and associated legal costs. However, there are still statements of income and assets and to file legal, administrative and asset transfer work to do. This claim is not a fiction, even if it is a bit exaggerated.

Fact or fiction, living trusts to save on inheritance tax? Fiction. Living trusts are not necessarily saving federal estate tax. Estate tax savings provisions may be incorporated in living trusts. However, these provisions may be included in a will. Therefore, living trusts do not offer tax advantages inherent save.

Fact or fiction, living trusts are private? This is largely done. By avoiding the probate process, you can keep the distribution of your assets private. Moreover, if trust is funded (ie assets have been transferred to the trust before death) the size of the estate may be easy. Note, however, that certain transfers, including real estate, are always public.

Fact or fiction, a living trust can help you in case of incapacity? For information, provided they have the assets to be placed in trust before incapacity or a device exists to place your assets in trust in case of incapacity. Another device, the enduring power of attorney, can be used in some cases, as a cheaper alternative to the living trust when planning for incapacity.

A trust is not appropriate for every individual. You should discuss the benefits of a trust with your estate planning attorney if: 1. you are the parent of minor children 2. you want privacy, 3. you own real estate, 4. your estate exceeds the applicable exclusion amount, and 5. you want to avoid probate.

The living trust is an important tool that offers many advantages. Living trusts are not and have never been a panacea. Remains important to work with an experienced lawyer in estate planning and evaluation of all alternatives before adopting a strategy for succession planning.