What is a Trust?
go here A trust is almost like a contract made between the “settlor”, the person or persons who declare the trust, and the “trustee”, the person or persons who will administer the trust. With Living Trusts, the most common type of trust, the settlor and initial trustee are usually the same person.
Types of Trusts
http://lstyle.sk/nase-sluzby/esteticka-dermatologia/odstranovanie-pigmentovych-skvrn/ The most common trust is the revocable trust, also called a Living Trust. There are many other types of trusts, for example Special Needs Trusts and Income-Only Trusts, also called Miller Trusts.
http://antiquewarehousemall.com/2013/12/vintage-seabird-wall-sculpture Living Trusts are more often than not established in order to avoid probate. This is unfortunate because most people can avoid the requirement of probate of their estates in far less complicated and expensive ways. For some clients, a Living Trust is reasonably indicated due to the family situation or other factors. However, in the absence of certain “triggering” circumstances, many estate planning clients can be well served by simpler, less expensive estate plans.
Many people are the victim of scare tactics when it comes to Living Trusts. Commercial “trust mills” attempt to convince the unwary seminar attendee that probate and attorneys should be avoided, in favor of low cost, one-size-fits-all Living Trusts. For many of us, Living Trusts may be indicated, but it is our individual circumstances that determine the necessity. For example, if we own real estate in more than one state, that may well signal the need for a Living Trust; otherwise, separate probates in each state could result. However, most people can avoid probate of their estate by simple and inexpensive arrangements made during lifetime, such as designating beneficiaries of financial accounts and real estate, the latter by means of a beneficiary deed in Arizona.
Going into 2011, it is important to know that Living Trusts can perform an important tax-saving function. The US Congress is likely to enact legislation regarding estate tax, or “the death tax” as it is sometimes referred to.
If you are married, a Living Trust can provide protection for your estate from estate tax. It takes a trust to maximize the exemptions for married couples. The issue is basically that when the first spouse dies (the “predeceased spouse”) all transfers to the surviving spouse are free and non-taxable, and that can be a problem. You want the predeceased spouse’s estate to take full advantage of the personal exemption in order not to lose it. In a nutshell, that is a big part of what Living Trusts with estate tax provisions can accomplish for a married couple.
In addition to the Living Trust, there are a wide variety of other types of trusts that can be used to give effect to even the most complicated estate plan. Trusts are an important tool for the estate planner because trusts are very flexible legal instruments and can be drafted to achieve a wide array of outcomes.
Do you need a trust?
The following factors are just a few that may indicate a trust of some sort is something you should consider:
- Unconventional family situation. Do the spouses have separate sets of children? Is the spouses’ partnership other than legal marriage?
- Real estate in more than one state. Do you own real property – real estate – in more than one state? If so, your estate could possibly be subject to probate in more than one state.
- Large personal estate. Is your separate or community estate of sufficient size that federal estate tax may be a factor?
- Children or grandchildren with disabilities. Do any of your family members receive governmental benefits that could be affected – or eliminated – because of an inheritance?
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