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Planned
Giving
Living
Trusts
A
Living Trust is a legal document that enables you to leave
instructions for who you want to handle your final affairs
and how you want your assets distributed after you die.
Living Trusts look a lot like a will but, unlike a will,
a Living Trust does not go through probate (providing privacy
concerning assets included in the living trust), it prevents
the court from controlling your assets if your are declared
incompetent, and it gives you (not the court) control over
the assets in the trust that you leave to your minor children
and/or grandchildren.
A
Living Trust can be revocable or irrevocable (you cannot
change it or take out assets that have been placed in it).
When you establish or set up the trust, you are called the
Grantor (sometimes Settlor or Trustor).
You will also name a Trustee to manage the assets
you place in the trust. Many people name themselves, continuing
to handle their affairs as they would have without the trust.
Married couples often establish themselves as Co-Trustees.
In case one of the Co-Trustees becomes incapacitated or
dies, the other instantly has control, without court involvement,
of the assets in the trust.
A
Successor Trustee needs to be named in case you (or both
of you in the case of Co-Trustees) becomes incapacitated
or dies. This can be an individual (your adult children
or dependable family friends) or a Corporate Trustee (a
bank).
Each
type, revocable or irrevocable, has advantages and disadvantages.
Revocable
Living Trust
Advantages
- You
see your trust work.
- If
you are not your own trustee, you observe the trustee
in action.
- You
avoid probate and the trust can be used to avoid ancillary
probate - that is probate of property in another state.
- You
avoid the attendant publicity of probate.
- You
will probably save your estate a substantial amount of
fees and costs.
- You
can provide for uninterrupted management in case of incapacity.
- You
can avoid interruption of management at death.
- It's
a good way to pass property to charity and save taxes
at death.
- You
can change your mind.
Disadvantages
- Initial
cost and trouble of setup. Property must be transferred
to the trust.
- It
slightly complicates subsequent dealings with the property.
- It
may require payment of an annual trustee's fee if someone
beside yourself is trustee.
- At
time of termination, there may be fees.
- There
are no immediate tax advantages.
Irrevocable
Living Trust
Advantages
- You
see your trust work.
- You
observe your trustee in action.
- You
avoid probate and court costs.
- You
probably will save some fees.
- It
is a good way to pass property to charity.
- You
save any taxes there may be on the property going to charity
upon your death.
- With
irrevocable charitable remainder trusts, created while
you are living, you can get an income tax deduction during
your life.
- You
may save taxes on capital gains on property placed in
a charitable remainder trust.
Disadvantages
Please
note, individual financial circumstances will vary. The
information on this site does not constitute legal or tax
advice. Donor stories and photographs are for purposes of
illustration only. As with all tax and estate planning,
please consult your attorney or estate specialist. All material
is copyrighted and is for viewing purposes only. Use of
this site signifies your agreement with the terms
of use. The content in this Planned Giving section has
been developed for Sisters of Notre Dame de Namur, Ohio
Province by Future
Focus. Please report any problems to section
webmaster. Revised: February 7, 2007 9:35.
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Sisters of Notre Dame de Namur, Ohio Province 701 East Columbia
Avenue, Cincinnati, OH 45215-3999 513-761-7636 | 513-761-6159
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Weaver. This page was updated: February 7, 2007 9:35
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