When putting together an estate plan that makes use of at least one living trust, it is important to understand the difference between an irrevocable living trust and a revocable living trust. The most basic and self-evident difference between the two is that an irrevocable trust cannot be revoked. There are, however, significant differences between the legal and tax consequences of the two devices of which one should be aware. What are the differences in revocability? To say that the … [Read more...] about Two Questions on the Differences Between Irrevocable and Revocable Living Trusts
Trusts
Why a DIY Trust Can Be a Very Bad Mistake
No matter what kind of trust you are creating, the temptation exists to create these seemingly simple documents by yourself without consulting your attorney. The truth is that a trust is simply a way to accomplish your goals. While you may believe a specific kind of trust is best suited to your desires, that isn’t always the case. Even though do-it-yourself trust document services will sell you any document you want that will allow you to fill in the blanks, that doesn’t mean the document will … [Read more...] about Why a DIY Trust Can Be a Very Bad Mistake
The Essentials of a Living Trust
Many estate plans make use of a device that is known as the “living trust” or the “inter vivos trust” as a means of avoiding the time and expense of probate and for reducing estate tax liability. This type of trust is created during one’s lifetime and not in the face of imminent death – in fact, “inter vivos” is Latin for “between the living” – which is why the trust is also very useful for establishing a long-term property management plan. In order to create a living trust, however, certain … [Read more...] about The Essentials of a Living Trust
Four Questions Regarding Grantor Retained Annuity Trusts
1. What is a grantor retained annuity trust (“GRAT”)? A GRAT is an estate planning technique that allows someone to make large financial gifts to family members, retain an income stream from the trust, and avoid the U.S. gift tax. 2. How does a GRAT work? To begin with, the creator/grantor of the trust makes an irrevocable gift to a trust and, at the same time, keeps an annuity interest that provides the grantor with an income stream for either a set number of years or for life, whichever … [Read more...] about Four Questions Regarding Grantor Retained Annuity Trusts
Living Trusts: The Basics
Over the coming weeks we’re going to look at various types of trusts and why they are important in estate planning. To begin with, let’s take a look at living trusts. Living trusts are one of the most commonly employed trusts for estate planning purposes, serving a variety of needs. Here’s what you need to know. Probate Avoidance One of the primary benefits of a living trust is that the property the trust owns does not have to go through probate. You can think of the trust like a corporation. … [Read more...] about Living Trusts: The Basics
3 Questions About Changing Testamentary Trust Terms
Question 1: How do I change the terms of the testamentary trust? When you create a testamentary trust, you write a will or living trust in which you detail the terms under which the testamentary trust will operate after your death. Because they will does not become effective until you die, the testamentary trust does not get created until after you die. So, the only way to change the terms of a testamentary trust is to amend the terms of your last will and testament or your living … [Read more...] about 3 Questions About Changing Testamentary Trust Terms
A Charitable Trust – Not Just For The Wealthy
For many people, the chance to use your wealth to support a worthy cause or charity is one of the great joys of developing an estate plan. While you can choose to give gifts now or donate them through your estate, you may want to consider establishing a charitable trust. Charitable trusts give you a wide range of options when choosing how to leave your gift, and they are not only for the wealthy. If you haven't thought about a charitable trust before, here are several issues you may want to … [Read more...] about A Charitable Trust – Not Just For The Wealthy
How Parents Can Choose a Guardian
Whenever parents contemplate their child's future, it's natural to think about how the child would fare if you should die. This is never a pleasant thought, but there is some way to help alleviate the worry. By creating an estate plan in which you choose a guardian to take over caring for your child if you should die, you can rest assured that your child will be cared for by someone of whom you approve. There are two types of guardianships that need consideration. Guardians of the estate are … [Read more...] about How Parents Can Choose a Guardian
Funeral Trusts Can Be a Useful and Flexible Planning Tool
Are you looking for a way to ensure that your wishes will be honored with regard to your funeral, making sure your family is not burdened with paying for your funeral, and sheltering money for Medi-Cal planning purposes? Consider creating a funeral trust which can accomplish all three goals, if drafted properly. A funeral trust is a specialized trust that is aimed at paying your final expenses. As with any trust, you must name a beneficiary. In this case, the funeral home that handles your … [Read more...] about Funeral Trusts Can Be a Useful and Flexible Planning Tool
