Living Trust Q & A

A Living Trust must be signed, witnessed, and acknowledged by a Notary Public. The creation of a Living Trust will allow your loved ones to avoid probate after your death.

The Benefits of Setting up a Living Trust

 

  • Organize your assets:  If you were to die tomorrow will your loved ones know where all of your assets are to start the process of getting all your affairs in order? Life insurance company, Cemetery information, 401K or Roth info, etc...

  • Avoid Probate: Save your loved ones the cost, stress, and delay of going through the legal process.

  • Step Up in Basis:  A Step up in basis means that your beneficiaries will receive a readjustment of the value of an appreciated asset for tax purposes upon inheritance.  For instance, if you purchased your property for $250,000 but the value at the time of your death is $1 million then your beneficiary(ies) will inherit the property with the basis of $1 million which means they don’t have to pay taxes on the increased value.

  • The Personal Estate Tax Exemption:  The personal exemption allows a set dollar amount of property to pass tax-free, no matter who inherits it. For deaths in 2017, the individual exemption is $5.49 million. The amount is indexed for inflation, so it will probably increase in future years. If you have made taxable gifts during your life, the amount of your personal exemption will be reduced by the amount of those taxable gifts.

  • The Marital Deduction:  All property left to a surviving spouse passes free of estate tax. (I.R.C. § 2056(a).) The marital deduction is not allowed for property left to non-citizen spouses, but the personal estate tax exemption can be used for property left to non-citizen spouses.

  • The Charitable Deduction: All property left to a tax-exempt charity is also free of estate tax. (I.R.C. § 2055(a).)

  • Special Rules For Married Couples: A surviving spouse gets a big tax break. If the deceased spouse didn’t use up his or her individual tax exemption, the survivor can use what’s left. That gives the couple a total exemption of twice the individual exemption amount, which can be split between them in any way that provides the greatest tax benefit. For example, say a man dies and leaves $4 million to his widow; no estate tax is owed because property left to a spouse is tax-free. The widow then dies, leaving $7 million (her own $3 million plus the $4 million she inherited from her husband) to their children.

How does your service work?

You are overdue for your Living Trust! Start protecting your family today by getting your affairs in order.

"Above all else, guard your heart, for everything you do flows from it"   Proverbs 4:23

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