I am planning to write a few brief articles on the "Mechanics of a LIVING TRUST" and its due place in sound estate planning.
Before I start I must make the disclaimer that I am a Certified Financial Planner and not an attorney.
What I am writing here is of general nature and not legal advice.
This is a legal document and consulting a competent attorney is recommended FOR DECIDING TO USE ONE.
Revocable Living Trust (RLT) There are a number of well written books out there on this subject .
I like and follow the one written by Mr.
Henry W.
Abts III, chairman of The Estate Plan, Nevada, the largest living trust providers in the nation.
In the industry they call his book a bible for estate planners.
Who should use a RLT? Experts recommend using a RLT for those whose net-worth is $50,000+.
It is a versatile tool doing a number of essential things and therefore knowledgeable and wise people use it as their primary estate planning tool.
Why use a living trust? 1.
The #1 reason is to avoid the agony, prohibitive cost of PROBATE and unnecessary delay in settling an estate when one passes away.
Families who have been through Probate do not want to subject their loved ones to go through that torture and humiliating experience never again.
2.
It minimizes estate taxes by utilizing effectively the two unified credits available for a husband and wife.
3, It establishes the means to provide for the needs of the creator of the trust when he or she becomes incompetent.
4.
It provides for support and education of minor children of the creators of the trust.
5.
It creates the vehicle to indirectly care for a handicapped child without jeopardising his or her Government benefits.
6.
It is a cost effective way to preserve the inheritance.
7.
Very importantly it ensures PRIVACY which most want unlike a WILL which is a public document.
There are several other reasons to use a living trust.
In my next email I will cover more on the subject.
With best wishes, Ranga Chary, MBA, CFP Certified Financial Planner