• WHAT IS A LIVING TRUST?
    • A Trust is a contract where one person transfers property to another person for the benefit of a third person. For example, X transfers property to Y, to manager for the benefit of Z. If the creator of this arrangement sets it up during his or her lifetime, it is called a "Living Trust."
    • If the creator retains the right to dissolve this trust, is a "Revocable Living Trust" otherwise it is an "Irrevocable Living Trust" which is the preferred vehicle for long term planning, reduction of taxation and liability.   WebTrust documents are "Irrevocable".
    • A Living Trust avoids Probate. This is the most advertised advantage of a living trust and therefore represents a great savings.
    • Property in the trust avoids publicity. Estates which pass through probate such as a will are public record. Anybody who wants to can see it. Property in the trust that avoids publicity achieves privacy both as to its contents and to whom receives it.
  • DOES A BANK OR TRUST COMPANY HAVE TO BE INVOLVED?
    No, the law does not require a corporate trustee even though your own ideas may suggest it.
  • CAN A LIVING TRUST SAVE ESTATE TAXES?
    Partially, with a Revocable Living Trust. For example, if you an your spouse both die with an $800,000.00 estate, the Trust may save you $80,000.00 in estate taxes. With an Irrevocable Trust, there would be NO estate taxes.
  • IS IT NECESSARY TO PUT PERSONAL PROPERTY INTO THE TRUST?
    Household items of nominal value need not be put into the trust. But it can be beneficial.
  • MUST I TRANSFER ALL OF MY ASSETS INTO THE TRUST?
    No. But to avoid probate you want to transfer all of your large assets into the trust. Only those assets in the Trust avoid probate.
  • DOES A LIVING TRUST MAKE SENSE FOR A SINGLE PERSON?
    Yes! Trusts are just as effective for a single person as they are for married persons. It does not matter whether or not they are a widow, widower, or bachelor
  • DOES A TRUST MAKE SENSE FOR AN ESTATE OF LESS THAN $600,000.00?
    Yes, because that individual can still avoid the problems of probate. On an estate of $300,000.00, probate fees can be as high as $18,000.00. Trust can be set up for any size estate.
  • IS THE LIVING TRUST A NEW IDEA?
    No. Trusts have been in existence throughout recorded history!
  • THE LIVING TRUST IS SOMETIMES KNOWN BY OTHER NAMES... WHAT ARE THEY?
    • The A-B Trust
    • The Marital Deduction Trust
    • The Grantor Trust
    • The Inter Vivos Trust (means "living trust" in Latin)
    • ... and many, many more!
  • DOES THE LIVING TRUST PREVENT YOU FROM BORROWING ON ASSETS IN THE TRUST?
    No, although the lenders may want to see a copy of the trust and lending institutions differ from state to state, the trust doesn't legally restrict your rights to borrow on assets in the trust in any way.
  • DOES THE LIVING TRUST PROTECT ME AGAINST MY CREDITORS?
    No. The Living Trust doesn't act as a shield to protect you from creditors. However, an Irrevocable Trust not only protects your assets from creditors, but from frivolous lawsuits as well.
  • WHY DIDN'T MY ATTORNEY TELL ME ABOUT THE LIVING TRUST?
    Most attorneys aren't knowledgeable about the living trust because they don't practice estate planning. It may have been that you told the attorney you only wanted a will, the least expensive plan.
  • REVOCABLE OR IRREVOCABLE?
    A living trust can either be revocable or irrevocable. Revocable means you can cancel or change its terms at any time... however the benefits are few. Irrevocable means it cannot be changed but have increased financial and legal benefits.
  • WHY DOESN'T EVERYONE HAVE A LIVING TRUST?
    The vast majority of people don't know anything about a living trust. Most people don't plan for the future or discuss what happens at death. Procrastination is our greatest enemy!
  • MUST SPECIAL INCOME TAX RETURNS BE FILED?
    With a revocable Living Trust, no special tax forms are required as long as a married couple or one person alone is receiving all the income from the trust. However, with an Irrevocable trust, income must be reported using IRS form 1041 once per year.
  • WHY IS IT IMPORTANT TO TRANSFER ASSETS INTO THE TRUST?
    The reason, once more, is to avoid the problems of probate. Only those assets in the trust avoid probate. and will save time and money as well as achieving privacy. The correct way you transfer your assets into the trust is by changing title from you as an individual to a trustee of your trust. It isn't enough to just list assets on the schedule attached to the trust. You must actually transfer you assets into the trust and give up ownership while maintaining control through contract agreement(s). This is called funding the trust.
  • WHAT RIGHTS DOES THE SURVIVING SPOUSE HAVE IN THE TRUST ASSETS?
    If the surviving spouse is the trustee, he or she may have the right to sell, buy, or transfer any of the assets. The surviving spouse has the freedom to do whatever he or she sees fit with the assets in the trust. However, it can be beneficial if the Trust has at least three or more Trustees that can vote on the best way to handle the Trust assets.   Laying out the plan in advance of a death is critical and is part of the responsibilities of the Trustors (creators of the Trust).
  • DOES MY WILL AVOID PROBATE?
    No. The will doesn't avoid probate. All the assets passing through the will pass through probate. Once again, probate is expensive, time-consuming, and open to the public. The majority of people want to avoid it. You can avoid the problems of probate with a Living Trust. Remember, proper planning saves $$$.
  • WHO ARE THE PARTIES TO THE TRUST?
    • The Creator(s) of the trust, most times referred to as the Settler(s) or the Grantor(s), or Trustor(s).
    • The Trustee(s), who oversee the activity of Trust.
    • The Beneficiary(ies) who receives the benefit of the trust and is for whom the trust was established.