What is a Living Trust? A Living Trust is a legal document drawn up by a qualified attorney allowing one person to control the assets during one’s lifetime. The intention with a Living Trust is to make certain that all assets owned are owned by one person who is now dead. The way in which the funds from the Trust are spent is through what is called a “trust deed” or “assign.” There is a living trust not unlike a will but there is no will to pass down the assets.
Basically a living trust attorney is one who has studied and specialize in these types of trusts and their use. He is an expert in tax laws, trusts, estate planning and probate. As the grantor, you will work with your attorney to establish and maintain the necessary instructions for how the assets will be used during your lifetime, and as a beneficiary, you will receive the property transferred under the instructions of the will. For this reason, it is important that you have a Living Trust attorney who will guide you through the process of making a will and actually working with the IRS to achieve what you and your family want done.
There are many situations that may require that you have the use of a Living Trust. If you have special needs, you may wish to protect your special needs against estate taxes, along with your family. For many years, Social Security was the sole trustee for many living trusts. Because of changes in the tax laws, Social Security has stopped being the sole trustee and there are alternatives to this if you have special needs or are a beneficiary of someone who does have special needs. One example would be a Power of Attorney which give the agent authority to make decisions on behalf of the principal, but cannot make financial decisions for the principal. Another option is a Supplemental Living Trust, which are very similar to the power of attorney, but allows the agent to make decisions about money and insurance policies, but not about the principal’s personal possessions.
A Living Trust can be beneficial to you if there is someone to whom you can leave the assets when you pass away, such as a spouse, child, or relative. By putting together a living trust, you can establish a special trust and appoint a “successor trustee” who will hold the title, and transfer the assets to the new trustee, without having to go through a court proceeding. Even if you don’t want to change your name as the initial trustee, or you don’t want to become the successor trustee, you can still put together a living trust. If you know that you are likely to pass away soon, you can set up a trust by placing your property in a trust, naming a durable power of attorney, or creating a joint living trust. The important thing to remember is that when you die, your beneficiaries will own your property.
Tax planning is another issue that must be considered before incorporating a living trust. If you have an estate, it is possible that you will need some type of tax return in order to determine the value of your property and to determine whether or not you owe any tax on it. In this case, you will want to consult with a living trust attorney to find out what the applicable laws are in your state. It may be wise to talk to a certified public accountant as well, since they may be able to advise you on whether or not you need to file any returns. While a living trust is not required for tax planning, it can help to save you time and money in the long run.
You should always keep in mind that while a living trust is a handy way to handle your money and assets, it is not as simple as putting your property into an account. There are many details that you must think about, such as who is named as the beneficiary, how property will be distributed, and who will inherit and pay the costs of your funeral and legal fees. A qualified living trust attorney can help you through this process. Because incorporating a trust document is not something that most people think about, it is likely that you will receive several different answers to these questions from different companies. If you are confused by the legal jargon, it is best to consult with a living trust attorney so that you can make sure you understand what you are purchasing.