I have a will. Why would I want a living trust?
A: Contrary to what you've probably heard, a will may not be the
best plan for you and your family - primarily because a will does
not avoid probate when you die. A will must be verified by the probate
court before it can be enforced.
Also, because a will can only go into effect after you die, it provides
no protection if you become physically or mentally incapacitated.
So the court could easily take control of your assets before you die
- a concern of millions of older Americans and their families.
Fortunately, there is a simple and proven alternative to a will--the
revocable living trust. It avoids probate, and lets you keep control
of your assets while you are living - even if you become incapacitated
- and after you die.
Q: What is "funding" my trust?
A: Funding your trust is the process of transferring your assets
from you to your trust. To do this, you physically change the titles
of your assets from your individual name (or joint names, if married)
to the trustee of your trust. You will also change most beneficiary
designations to your trustee.
Q: Tax-Free Gifts
A: This is easy and it doesn't cost anything. Each year, you can
give up to $12,000 ($24,000 if married) to as many people as you wish.
So if you give $12,000 to each of your two children and five grandchildren,
you will reduce your estate by $84,000 (7 x $12,000) a year - $168,000
if your spouse joins you. (This amount is tied to inflation and may
increase every few years.)
If you give more than this, the excess will be considered a taxable
gift and will be applied to your $1 million gift tax exemption.
Charitable gifts are unlimited. So are gifts for tuition and medical
expenses if you give directly to the institution.
Q: What is a corporate trustee?
A: With people living longer and health care costs continuing
to rise, our savings must grow larger and last longer. With hundreds
of investment options to choose from, deciding where to put your money
can be very confusing. And if you make a wrong decision, it can be
One option you shouldn't overlook is the bedrock of asset management
and personal service: the corporate trustee.
A corporate trustee is a bank trust department or trust company. Its
employees can help you build, manage and protect your wealth when
you put your assets in a trust.
A trust is simply a legal document that lets you reduce unnecessary
legal fees, save taxes and keep control over your assets while you
are living, if you become physically or mentally incapacitated, and
after you die.
When you set up a trust, you need to name someone (a trustee) to manage
the assets your trust controls. While you can choose just about any
adult, there are very good reasons why you should consider a corporate
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