Notes

Outline

Living Trusts and Tax Planning First Focus When the term living trust is used: this is a trust written to bypass probate court red tape and to assist the survivors with continuation of business affairs without the necessity of court oversight, transferring assets, etc.  there are many, many, types of trusts.  The living trust is only one of these many trusts.  even the living trust can be drafted to accomplish more than the one mission of probate planning.  The living trust is only a very minute speck in the world of trusts.  One must decide now  what   one wants to accomplish.

List of Potential Benefits

What a Trust Is

Trusts Clauses or Attachments

In general, let us focus on the use of what is popularly known as a LIVING TRUST.

First some very general remarks about the LIVING TRUST It is also known as a revocable trust, a grantor trust The grantor retains very broad powers over all the trust assets during the lifetime of the grantor The income is included in the grantor’s income — in other words this LIVING TRUST will NOT accomplish anything for the income tax planning of the grantor The living trust bypasses probate reporting when the estate comes into existence.  There will be no need for probate reports, filing with the probate court and those records that would be public with the probate reporting bypass the disclosure to the public.  If the LIVING TRUST is not funded, then its purpose is lost.  If there are assets outside the living trust, then those assets must pass through probate.Keep in this picture that merely because probate is bypassed is not in itself the bypassing of federal estate tax reporting.  The assets in the control of the deceased at date of demise are usually includible in the gross estate for federal estate tax reporting.  These two reporting procedures are very similar for the listing of the “inventory”.  However  they may not be the same.  The fact that probate reporting is not required does not in itself eliminate the estate tax reporting. The gross estate will usually include all property, assets, investments, etc. the deceased had title to, owned, and controlled, whether as sole owner or jointly.

Using Trusts-- Is a Living Trust Right for You?

What does the Living Trust Do Now & At Passing On?

Bypass Probate!

Why Do This? Some of the other benefits and pitfalls to consider are:

Benefits & Pitfalls

Common Mistakes by Taxpayers

Other Trusts May be Better Suited For You