Why do you need a living trust?
A Living Trust is a contract between you and your heirs in which you specify what you want done with your assets after your death. You can change the terms of this contract at any time while you are living and you maintain complete control over your assets. During your lifetime, everything remains almost the same as it is now. You can sell, buy and manage all the trust assets. You appoint a trustee (usually your spouse or your children) to manage your property after you die.
You need a Living Trust If You Answer “Yes” to any of the Following
1. You have an estate that exceeds $20,000
2. You own real property
3. You have minor children
4. You have children from a previous marriage
5. You want to make sure your children are provided for in the event your spouse remarries
6. You want to provide for your kids’ college education
7. You want to take advantage of estate tax deductions
8. You want to make sure you are not giving the government, the courts and attorneys any money from your estate than you have to
9. You want to make it difficult for someone to contest your estate
10. You want to ensure that your heirs do not have to wait months or even years to enjoy their inheritance
The Benefits of a Living Trust
* Avoid Probate – a Will does not keep your estate out of Probate Court. Probate is a costly, time consuming and public process that is required to administer an estate is the decedent did not have a trust. Simply having your assets held in joint tenancy is not enough to ensure your children or other beneficiaries inherit your assets.
* Avoid Taxes – though out your life the government has taxed your income, your property, your purchases and your savings. Why should they tax you again when you die? For many people, a living trust can eliminate all death taxes. Estate tax is close to 50 cents on every dollar. That means close to half of your assets above the applicable exclusion amount (discussed in separate post) are given to the government when you die if you do not have a living trust with the proper tax provisions.
