Legal Services, Tax Preparation, Dale Thorson, Probate, Living Trusts, CPA

Over the last two decades, the popularity of Living Trusts has sky rocketed. No longer a tool just for the rich, Living Trusts are one of the most common estate planning tools in use today.

This legal arrangement, usually drafted by an estate attorney, creates a separate entity called a Living Trust. A Living Trust is called that simply because it is created while you're alive (as opposed to a "testamentary" trust created after death).

The Living Trust document itself names three different parties. The individual (or couple) that establishes the Trust is named the Grantor (also referred to as the Trustor).

The Trustee is the person named by the Trust as the controller of the Trust's assets (and in many cases, the Trustees are the same people as the Grantors).

On the receiving end, the Beneficiaries are the heirs that will benefit from the Trust once the Grantor's have passed away.

The law favors using a Living Trust, since it not only avoids Probate, but also eliminates the Gift Tax (sometimes called an Inheritance Tax). At death, all trust assets "Step-up in Basis", to equal the current market value of the asset. Therefore, at death the heirs are not forced to deal with financial losses while they are having to deal with the emotional loss.

Heritage Trust has a long history of helping families protect both their assets and their families from the losses of Probate and Joint Ownership. When a Living Trust is implemented and properly funded, you have beaten the Probate system to the punch by effectively transferring your estate, during your lifetime, to your Trust. If you delay in preparing a plan like a Living Trust, the Probate Court will assume the responsibility of transferring title to your assets. It is hard to imagine that engaging courts, attorneys, appraisers, and executors for a 1 to 3 year-long process will be less expensive than a Living Trust. Yet people for some reason still believe that Wills are less expensive!

While the initial cost of preparing a Will is generally less than a Trust, dying with a Will is almost always far more expensive than dying with a properly funded Living Trust. Try asking an attorney to guarantee, in writing, that the cost of Probate will only be $1,695.00 with a Will. He will refuse. The reason he won't do it is simple... he can't! A Living Trust is truly a financial decision that can save you thousands!

A Living Trust is a serious document that affects the rest of your financial life, and tens or hundreds of thousands of dollars are at risk when you consider Probate fees, Estate Taxes, Capital Gains Taxes, and Gift Taxes, not to mention Medicaid and all of its poverty-producing regulations. Make no mistake, this important task takes expert assistance, and expert follow-up help is important. The most important part of what you pay for is the ongoing help and assistance you receive for months and years after your trust is done. You can't get that from a kit or a book. You may leave your assets to anyone you want in any configuration you choose. You can leave uneven amounts to your children or others, disinherit, or provide for disabled children. Just about anything you can imagine, you can do. You can have your children take over when you die and work together in settling the trust, or assign the job to them individually in any order or scenario you desire. You may also amend your Trust at any time without seeking the help of an attorney.

Who Needs A Living Trust?

Almost anyone with an estate of $100,000 or more can benefit from having a living trust. Estates of $100,000 or more are often subjected to probate in their state of residence, which can cost anywhere from 2%-4% of the estate's value in court and legal fees.

The living trust also is useful for individuals subject to estate taxes. Through a living trust, a couple is able to maximize their Unified Credit to its fullest. It even accomplishes protection for individuals wanting to avoid conservatorship.

Advanced living trusts can be structured for complicated family situations. Re-married spouses, with children from a previous marriage, can use an advanced revocable trust to ensure kids receive their proper inheritance.