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Living Trusts by Mind Map: Living Trusts
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Living Trusts

Private, Avoids Probate, Protects against a Disability

Wills

Guarantee Probate

Joint Tenancy guarantees probate on second death

Problems

Lost wills

Wills don't affect IRAs, Life Insurance or joint property

Good things

Wills avoid the "bond" payable in probate

Couples with young children (needing guardians) use wills

Usually inexpensive to have prepared

Probate

What causes Probate?

Dying with a will and more than $100,000 in own name

Any real estate in own name

Dying with no will "intestate" and more than $100,000 in own name

Usually a house in the deceased's own name or stocks in deceased own name cause the probate

What avoids Probate?

Living Trust

IRAs with a beneficiary

Life Insurance with a beneficiary

Joint Accounts with 1 person living

TOD "transfer on death" accounts

Fees

$500 filing fee

$2500.00 attorneys fees minimum often more

Executors Fees

Bond required in intestate estates

Delay

6 month wait during "claims period"

30 day wait to open estate in estates with no will

Forum for Disgruntled Heirs

Fights over who will be executor

Notice must be given to "heirs" even if they don't inherit

Living Trust Benefits

Pros:

Avoids Probate

Protects Against Disability

Private-Not registered anywhere

Can save on inheritance tax for married couple only

Cons

"Funding" of trust, Cost of setting up- attorneys fees

Inheritance Tax Freebie Amount

Uncertain at Best

2006 $2.0 million

Further Update- In August 2006 the Senate rejected this change.

2009 $3.5 million

2010 Unlimited

2011 Back to $1.0 million

Types of Trusts

Two Living Trusts Married Couple

Use if: Total estate is $1.0 million or more

Pros: Avoids Probate

No estate taxes up to $4.0 million

Protects against disability

Cons: Cost of establishing $700 per trust; "funding"

1 Trust for Married Couple

Use if: Total estate is $1.0 million or less

Pros: Avoids Probate, Protects against disability

Cons: Cost of establishing $700, "funding"

Single Trust Divorced, Widowed Single

Use if: Anyone can benefit

Pros: Avoids Probate, Protects against disability

Cons: Cost of establishing $700, "funding"