Estate Planning Myth #2

Many people believe that estate plans are only for the wealthy and well-to-do.  This is another common estate planning myth.  More than 60% of all Americans die without an estate plan, leaving their state’s intestacy laws to determine who will inherit their property.  Intestacy laws may also determine who will act as guardian of your … Read more

Estate Planning Myth #1

Many people believe (or are told) that a Revocable Living Trust can reduce estate taxes. This is a very common estate planning myth.  A Revocable Living Trust does not reduce your estate taxes.  The main purpose of a Revocable Living Trust is to avoid probate, plan for disability/ incapacity and to protect your privacy. A married … Read more

The Basics of Estate Planning – Part III

In Part II, we discussed Wills and the advantages and disadvantages of having a Will. This issue will focus on the second of four estate planning tools – a Trust, and the advantages and disadvantages of having a Trust as part of your estate plan.

What is a Trust?

A Trust, generally, is a legal entity that can hold title to property. There are three parties to a Trust agreement: the Trustmaker who creates the Trust, the Beneficiary who receives the benefit of the property held in the Trust, and the Trustee who manages the Trust. The property that is transferred to and held by the Trust becomes the Trust principal. If you create a Trust within your Will, it is called a Testamentary Trust. If you create a Trust while you are alive, it is called an inter vivos or Living Trust.

While you are alive, you usually will receive all the income of the Trust and as much of the principal as you request. Upon your death, the Trust assets are distributed to your Beneficiaries in accordance with your directions contained in the Trust agreement, or it can continue for specified purposes for a period of time.

The Advantages and Disadvantages of a Trust

Read moreThe Basics of Estate Planning – Part III