How could a living trust be helpful if I become incapacitated?

How could a living trust be helpful if I become incapacitated? If you are the trustee of your own living trust and you become incapacitated, your chosen successor trustee would manage the trust’s assets for you. If your assets were not in a living trust, however, someone else would have to manage them. How this would be accomplished might depend on whether your assets were separate or community property, and whether you have a durable financial power of attorney. (Even if you have executed a living trust, it is still recommended that you execute a durable financial power of attorney. See #12.) If you are married or in a registered… Read More

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Should everyone have a living trust?

Should everyone have a living trust? No. Whether or not to create a trust is a personal decision. Young married couples without significant assets and without children, who intend to leave their assets to each other when the first one of them dies do not necessarily need a living trust. However, if the couple should die in a common accident, or shortly after each other, without a trust their estate(s) may be subject to a probate. (See discussion below.) Other persons who do not have significant assets (less than $150,000) and have very simple estate plans also do not need a living trust. Finally, anyone who believes that court supervision… Read More

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What can a living trust do for me?

What can a living trust do for me? It can help ensure that your assets will be managed according to your wishes — even if you become unable to manage them yourself. In setting up your living trust, you may serve as its trustee initially or you may choose someone else to do so. You can name a trustee to take over the trust’s management for your benefit if you ever become unable or unwilling to manage it yourself. And at your death, the trustee — similar to the executor of a will — would then gather your assets, pay any debts, claims and taxes, and distribute your assets according… Read More

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How much does a living trust cost?

How much does a living trust cost? It depends on your individual circumstances and the complexity of documentation and planning required to achieve your goals and objectives. The costs may vary from lawyer to lawyer. Generally, the costs will include the lawyer’s charges for discussing your estate plan with you and for preparing a living trust agreement, your will, power of attorney or other necessary legal documents; supervision over their execution; and services or instructions for funding your living trust. It is crucial to keep in mind that a living trust is a very important part of your estate plan. Avoid being lured by promotions for extremely low-cost living trusts… Read More

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my living trust

Will a living trust help reduce the estate taxes? No. While a living trust may contain provisions that can postpone, reduce or even eliminate estate taxes, similar provisions could be placed in a will to accomplish the same tax planning. Will I have to file an income tax return for my living trust? No, not during your lifetime. The taxpayer identification number for accounts held in the trust is your Social Security number, and all income and deductions related to the trust’s assets are reportable on your individual income tax returns. After your death, the income taxation of the living trust is similar to a probate. What other estate planning… Read More

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What is a living trust?

What is a living trust? It is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die. Most people name themselves as the trustee in charge of managing their trust’s assets. This way, even though your assets have been put into the trust, you can remain in control of your assets during your lifetime. You can also name a successor trustee (a person or an institution) who will manage the trust’s assets if you ever… Read More

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If I have a living trust, do I still need a will?

If I have a living trust, do I still need a will? Yes. Your will affects any assets that are titled in your name at your death and are not in your living trust or some other form of ownership with a right of survivorship. If you have a living trust, your will would typically contain a pour over provision. Such a provision simply states that all such assets should be transferred to the trustee of your living trust after your death. (This does not mean, however, that your beneficiaries can avoid going through probate for these assets.) Your will can nominate guardians for your minor children as well. Any… Read More

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How are my assets put into the living trust?

How are my assets put into the living trust? Once your trust has been signed, an important task remains. To avoid court-supervised conservatorship proceedings if you should become incapacitated, or the probate process at your death, your assets must be transferred to the trustee of your living trust. This is known as funding the trust. Deeds to your real estate must be prepared and recorded. Bank accounts and stock and bond accounts or certificates must be transferred as well. These tasks are not necessarily expensive, but they are important and do require some paperwork. A living trust can hold both separate and community property. This makes it convenient for spouses… Read More

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What are the disadvantages of a living trust

What are the disadvantages of a living trust? Because living trusts are not under direct court supervision, a trustee who does not act in your best interests may, in some cases, be able to take advantage of you. (In a probate, direct court supervision of an executor reduces this risk.) In addition, the cost of preparing a living trust could, in some cases, be higher than the cost of preparing a will. However, it depends on the particular estate plan. The difference in cost may not be significant if the estate plan is complex. Also, keep in mind that a living trust can create additional paperwork in some cases. For… Read More

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 Who should be the trustee of my living trust?

 Who should be the trustee of my living trust? Many people serve as trustees of their own living trusts until they become incompetent or die. Others decide they need assistance simply because they are too busy or too inexperienced or do not want to manage their day-to-day financial affairs. Choosing the right trustee to act on your behalf is very important. Your trustee will have considerable authority and responsibility and will not be under direct court supervision. You may choose a spouse, adult child, domestic partner, other relative, family friend, business associate, or professional fiduciary to be your trustee. The professional fiduciary could be a licensed, registered individual, or a… Read More

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