A living trust is a mechanism to:

  • Avoid probate

  • Avoid or minimize estate taxes

  • Manage your assets if you are incapacitated

If you establish a living trust, most of your assets are transferred into the trust. Qualified assets like IRAs generally are not transferred as such a transfer would be treated as a taxable event (as though you withdrew the funds from the IRA in total at the time of the transfer). When you pass away or become incapacitated the trust goes on and a new trustee takes over from you. The trust avoids probate because you do not own the asset at the time of your death.

A living trust can help avoid estate taxes in a variety of ways, but at this time only estates valued in excess of $ 5.3 million are subject to estate taxes. If your assets are approaching that value, you owe it to yourself to seek estate planning advice.

A living trust allows your successor trustee to take responsibility for the trust if you become incapacitated. Guardianships are expensive and cumbersome. If you are not competent to handle your own affairs and you do not have a trust or power of attorney, a guardianship may become necessary. The trust can provide a mechanism for determining if you are not in any condition to care for your own financial affairs and the trustee takes over without the court overseeing everything that occurs. With a guardianship the court has jurisdiction over the guardian and reviews a report prepared by the guardian at least annually.

A trust that is never funded is a waste of money spent preparing a worthless stack of paper. We take care of executing all the transfers for you or provide specific advice on how to change beneficiaries on others. Let us help you determine if a trust would be beneficial and cost-effective for you.