Revocable Living Trusts: Living Trusts Q&A
Have a question about living trusts? We’ve compiled some of the most frequently asked questions and answers to help you find the information you need.
Q. Is probate bad?
A. Not necessarily. Probate refers to the court process for determining the validity of your will, collection and disposition of assets, payment of proper claims and legacies, filing of tax returns, and distribution of your estate as directed by your will. There is nothing inherently wrong with probate provided your state has streamlined the procedures and settlement costs are reasonable. Of course probate difficulties may result from a poorly drawn or outdated will, and here the remedy is up to you.
Q. Do your living trust and will control your entire estate?
A. Probably not. Jointly owned property generally goes to the surviving joint owner, regardless of what your will says. The same is true of community property in nine states. Life insurance, IRAs and other retirement plan benefits are often payable to named beneficiaries. If you overlook these arrangements, you may upset your overall plans, resulting in heavier taxes and the inequitable division of assets among your beneficiaries.
Q. Does a living trust save taxes?
A. Because you continue to benefit from the trust assets and they’re still yours according to the IRS, you remain taxable on the trust income, and the trust assets are subject to estate tax. But both a living trust and a testamentary trust with proper provisions can eventually save estate taxes. See your estate planning attorney and tax professionals for more information.
Q. Can I benefit personally from a living trust?
A. Yes. When you name a professional trustee to administer your trust, you free yourself from investment responsibilities and details. Moreover, with advancing age you may find it difficult to look after routine matters. In case of your illness or absence, the trustee can even pay your bills. And in states where probate is costly and time-consuming, a living trust provides your chosen beneficiaries with an effective shortcut.
Have a Question Not Answered Here?
If you have additional questions about including PETA in your living trust or other estate plans, please contact Tim Enstice at 757-962-8213 or email@example.com.
Getting Started | Pros and Cons of Living Trusts | Living Trusts Q&A | Assessing Your Needs | Case Study | Choosing Your Trustee | Do You Still Need a Will? | Action Items