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January 23rd, 2018 10:20 AM

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Created while you are alive, a revocable living trust lets you control the distribution of your estate.  Ownership of your property and assets is transferred into the trust.  You can serve as trustee or you can appoint another to serve.  If you serve as trustee, you must appoint a successor to serve as trustee upon your death. 

Properly drafted and executed, a revocable living trust can avoid probate and delays as the trust owns the assets not the deceased.  Consult with your attorney and/or CPA before deciding if a revocable living trust is the right choice for you.

Advantages to a Living Trust Holding Title:

  • A husband and wife can establish a joint revocable living trust.
  • While the trustor serves as a trustee or co-trustee, a separate tax return is not required for the trust.
  • The revocable living trust allows the trustee to buy, sell and finance assets just as before.
  • The living trust can be cancelled or changed at any time before death or incapacitation.
  • Probate (which can take 9 to 12 months) is avoided when assets are held in a living trust.
  • Litigation is discouraged by a living trust.
  • A married couple with a living trust can reduce or eliminate federal estate taxes be setting up an Exemption Trust.

Disadvantages of a Living Trust:

  • A living trust will cost more to set up than an estate plan with only a will.
  • A trust agreement with a new will must be set up.
  • Transferring assets into the living trust will require paperwork and incur costs not encountered with a less elaborate estate plan.
  • Handling an Exemption Trust may require extra effort from the surviving spouse.
  • Some lenders may require property held in a living trust be removed from the living trust to refinance the property.

Always consult an attorney or CPA before making any decisions concerning a will or living trust.  Every financial situation is different and professional guidance is a must.

Written by Barbara Doeringer



Posted in:Real Estate
Posted by Allen Doeringer on January 23rd, 2018 10:20 AMPost a Comment

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