Different Kinds of Trusts and Their Uses

 By Pauline Go

A trust is a legal arrangement where one person, known as a trustee, holds the legal title to property on behalf on another person, who is known as a beneficiary. It is not necessary that a trustee has to be a person; even a bank or law firm can be a trustee. Usually the beneficiaries are children who benefit when their parents pass away.
A trust is extremely useful in avoiding probate. Ones the donor passes away, any property included in the trust before the donor's demise becomes part of the trust and immediately passes on to the beneficiaries without the need for probate. This allows the beneficiaries to save time and money. Some trusts also act as tax havens for the beneficiary and the donor. These trusts are often called credit shelters or life insurance trusts. Trusts can also be used to protect property from creditors or aid a donor to qualify for Medicaid.
There are basically two categories of trusts and they are testamentary and inter vivos. A testamentary trust is created by will and it only comes into existence after the donor's death. On the other hand, an inter vivos trust starts during the lifetime of the donor.
There are two types of inter vivos trusts and they are revocable and irrevocable. Revocable trusts are also known as living trusts. In this type of trust, the donor has complete control over the trust and he can amend or terminate the trust whenever he wants. Revocable trusts are usually used for asset management, avoiding probate, and for tax planning.
Irrevocable trust, as the name suggests, is one which cannot be changed or amended by the donor. Any property or assets placed in the trust will not be distributed by the trustee based on the trust document. This type of trust is mostly used when people are doing Medicaid planning.
Then there is another type of trust known as supplemental needs trust, which allows the donor to take care of a disabled child, spouse, relative or friend. The beneficiary can get the assets from the trust for purposes other than those provided by public benefit programs. This way the beneficiary does not lose his eligibility for public benefits like Supplemental Security Income, Medicaid or low-income housing. This can be created as a part of the will.

Pauline Go is an online leading expert in the legal industry. She also offers top quality articles like :
Elderly Asset Protection & Guide To Wills

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Six Tips On A Florida Living Trust - Sunshine Estate Planning

 By Robin J. Derry

Keeping your assets and inheritance matters private, avoiding the costs and frustration of Florida probate, completing a swift legal asset transfer to legal heirs is why Florida living trusts have snowballed in popularity with the "snow-bird" set.
Tip #1 Florida Estate Planning To Avoid Probate Costs. Florida living trusts are all about taking smart and legal planning steps to minimize complexity, cost and grief following death. Remarkably, thousands of people fail to prepare their estate for legal transfer. Age, ill health or an accident leaves them incapable, incompetent or worse! Result? Their entire estate, along with the unraveling of taxes, creditor obligations and more "defers" to the probate court.
* What Probate Costs Families! Families and estates without properly constructed asset transfer documents like the revocable Florida living trust, could lose over 20% of the estate's value to court administrative and attorney fees, and up to three years or more in court time, add-in a chunk of grief and frustration, and then ice the cake with the time-value cost of financial assets taken out of the market for the probate period. And, don't forget your family's total loss of privacy...while a Florida living trust renders the asset details and transfer utterly private, the Florida probate court is an "open book" for any snoopy neighbor or investigative reporter to pour over.
Tip #2 What About Taxes And Asset Protection In My Florida Living Trust. * No Tax Benefit. Florida living trusts do not provide any tax benefits at all. Ordinary earned income and/or capital gains and losses, partnership income, rents and the like for all the assets "funded" into the Florida living trust are treated for taxation purposes on your personal or joint tax filing. The only exception may be Florida living trusts where the combined estate asset "community property" of a husband and wife exceed the then current Federal estate tax exemption figure.
* No Asset Protection. Florida living trusts also do nothing about asset protection from creditors or judgment lawsuits. If you personally own an asset, and if that asset is not protected or legally sheltered, and if you "lose in court", then the litigating party or plaintiff will likely obtain a judgment order to reach-in to your living trust and legally remove the target asset.
Tip #3 Picking Your Trustee And Successor Trustee. If you want to personally direct your Florida living trust business, then as grantor or settler you can appoint yourself as the initial Trustee. Make sure to instruct for a "successor Trustee" who is the person ... or institution like a bank or law firm ... who will have the actual job of distributing the assets according to your instructions, and complying with all filing and statutory requirements under Florida State law.
Tip #4 You've Got To Hire An Attorney - It's The Law. Reviewing assets, preparing a revocable Florida living trust for inheritance matters, and entering into a legal service contract requires that the preparer be a Florida State bar certified attorney. Any other situation constitutes illegal practice of law within Florida, and is punishable. Your Florida estate attorney has a multi-part role ...he or she will identify all your assets, make sure that they legally transfer into your inter vivos revocable Florida living trust.
Tip #5 Getting Your Assets Together. What empowers your Florida living trust is both its form, its administration and whether it has been legally "funded". In layman terms this means that all of your assets ... both in Florida or any other State ... must be legally transferred in title and control to your Florida living trust. Assets that you forgot about or didn't manage to transfer prior to your death could get bound up in probate, and will impact your heirs in ways they don't need to experience. Walk carefully when handling 401K or IRA retirement accounts, in order to ensure that changes to beneficiary designations are handled correctly.
Tip #6 Your Florida Living Trust Is Your Estate Planning "Alter Ego". Think of your living trust as a documentary form of You ... what you've worked for your entire life, the assets you've created, and your preferences for inheritance are entirely captured by your Florida living trust. You "fund" the trust with your financial and real property assets. You can amend it or determine the trust's day-to-day business ... it's revocable ... up until the time of your death. Thereafter, no change is permitted. Your Florida living trust reverts to an "irrevocable trust", managed by your successor trustee under strict rules until all assets have been legally transferred, taxes paid, and creditors paid.
Bottom Line. If you're looking for privacy, and potentially significant cost and time savings to your heirs, without the imposition of court-ordered probate, then examine further the increasingly popular Florida living trust.

Please go to:-
Living Trust: http://www.wise4living.com/lwill/living-trust.html
Spendthrift Trusts: http://www.wise4living.com/lwill/spendthrift.html
Author Robin Derry is publisher for http://www.wise4living.com/ a specialty knowledge site that gives insights and solutions on a wide range of product, technology and lifestyle interests for web-enabled people.

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Living Trust Confusion

 By Maurice Johnson

Confused about living trusts? If so, you are not alone.
A living trust is a legal entity normally created to hold assets in your lifetime and distribute them after your death. [This has nothing to do with a living will. A living will is a document that states your desires regarding use of artificial means or heroic measures if you become disabled.]
The internet is littered with so-called "experts" loudly proclaiming their opinions about living trusts.
Some "experts" say they are the best thing since sliced bread. Others, say they are worthless and their benefits a hoax.
The truth is much more complicated.
Living trusts can do great things for some people and nothing for others. It just depends on your situation.
It is true that such a trust can, among other things, be used to avoid probate and save estate taxes. It also can help provide privacy, flexibility and even avoid a guardianship proceeding if you become incapacitated.
One of the biggest benefits of this type of trust is that it allows you to begin to put your estate plan into action while still alive. You can then get some insight into how your estate plan will work and make adjustments if necessary.
However, there are other ways to achieve these objectives that might be easier and cheaper for you. Also, it can be difficult and sometimes costly to properly prepare and fund a living trust.
So, the truth is that a these types of trusts offers advantages and disadvantages.
Generally speaking, the larger and more complex your estate, the more an inter vivos trust will likely benefit you. Certainly if you have assets over $1,000,000 you should seriously consider having a living trust drafted as part of your estate plan.
The bottom line is to figure out if you should get a living trust you need to either talk to an experienced estate planning attorney about your particular situation or you need to invest some time learning about the advantages and disadvantages of living trusts.

Maurice Johnson is an attorney and has practiced estate planning law throughout his professional career. He is publisher of Free Living Trust Information and Estate Planning Hub Visit those sites to find out more about the advantages and disadvantages of living trusts.

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Take Your Pick, Living Wills Or Living Trusts - Which is For You?

 By Jimmy Woodall

Nobody can really tell what the future holds. Because of this fact, a lot of people have taken measures to make sure that things will turn out as smoothly as possible.
If you want to jump right onto the same bandwagon, then you better be equipped with the right knowledge prior to making that decision. Living wills or living trusts can provide you with that much-needed preparation but you certainly need to learn about these legal documents before you could actually take your pick.
Living Wills Vs. Living Trusts
If you want to know which legal document is more appropriate for you, you first need to find out the coverage of living wills or living trusts. Since they're both legally binding, every adult person should almost certainly know how each could be of assistance to them in the future. In order to properly pick your choice, you have to know their differences.
A living will is a legal document that discloses a person's wishes concerning health care. Its contents will only be effective once the maker falls into an incapacitated state wherein he or she is no longer capable of conveying his or her decisions.
The directives contained within it usually indicate one's desires not to receive treatment or be kept alive by means of artificial life support measures.
Once you're in an incapacitated condition, your family will have to make all the health care decisions for you. Aside from that, they will have to put up with the financial burden of your hospitalization. By restricting medical treatment, a living will could keep a tight rein on hospital expenses that could use up or even totally exhaust all your family's remaining funds.
On the other hand, a living trust - also known as inter vivos trust - is a legally binding document that is drawn up for the purpose of controlling ownership to a person's assets in his or her entire lifetime, and for allocating those properties after death.
The creator or the grantor may also appoint a trustee who will implement the terms indicated in the living trust in case he or she becomes incapacitated or unwilling to perform the duty.
In comparison to a will, the grantor does not necessarily have to pass away for the living trust to take effect. As the name implies, this legal document is effective during the creator's lifetime.
A living trust however is only recommended for people who own a considerable amount of assets and finances. In other words, the necessity to create one is largely dependent on your circumstances, financially speaking.
If you still haven't decided which type of legal entity to choose, you might as well pick both for as long as the two are applicable to your needs and circumstances.
The obvious similarity is in the financial aspect. Living wills make it possible for you to save your family from all the trouble of paying for enormous hospital bills, provided that your medical condition appears to be beyond any possibility of recovery. On the other hand, living trusts lay emphasis on the need to properly manage your assets according to your preferences.
On the whole, living wills or living trusts make it possible for you to put things in order while you still can. Also, both legal documents allow you to prepare for the inevitable and the unknown.

The author, Jimmy Woodall, has 49plus years business experience. He is involved in internet, niche and affiliate mtkg. Visit his new website Living Wills at: http://jwoodl.com/living-wills

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Shared Living Trusts For Married Couples

By James L Kirkland

If you are planning your own will, you might want to think of other options such as living trust. It will allow you to do the same job as a will, leaving your property to the beneficiaries of your choice. But you can avoid probate by using this method. It is a legal document controlling the transfer of property in the trust after your death. In the document, you will name beneficiaries who are going to receive the trust property. Just like a will, you should name primary beneficiaries for your specific property, residuary beneficiaries, and alternates if any.

For couples, there is an option of creating a shared living trust which will cover the property of both parties. However, it is not a requirement for every couple. If each spouse owns one's separate property, it might be better for each spouse to create an individual living trust rather than having combined one. Generally it is preferable to create single, shared trust in case they share the ownership of the property.

If you are living in a community property state where spouses are equally allowed to own most properties acquired after the marriage, then both of you will probably own the property together. Even in the other state where only one spouse is allowed to have the ownership, spouses who have been married for many years will be considered to have owned the most of all of the property together. In such a case, you are allowed to transfer that property into legal co-ownership when you create your shared living trust.

Same rule can be applied to unmarried couples if they want. They can register any ownership and title document in both their names as co-owners, thus sharing the ownership of the property.

It is not recommended to have two separate living trusts set up for shared property that are owned by a couple. Usually, such a case can cause a problem, ongoing record-keeping burdens as well. Also it could lead to unfair and unbalanced situation. However, no spouse is required to divide the property this way. Using a shared trust, all co-owned property can be transferred. Also you can put individually owned property into the trust, including any separate property if you want. Each spouse has a full power of naming beneficiaries for one's portion of the shared trust property and any other property of his or her own.

In case one of the spouses dies, then the shared living trust will be split into two trusts. One trust contains all of the property of the deceased one, while the other containing all property of the surviving one. The property of deceased spouse will be transferred to the beneficiaries named by that spouse. Generally the beneficiary will be the surviving spouse, but any other parties such as children or friends may also be the beneficiary.

If you are interested, you can use Living Trust Forms to leave your property to your named beneficiaries.

For more information about legal documents, go to Legal Forms site, where you can find many free legal forms and resources including living trust and living will forms that you can use to help transfer your own property and assets.

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What is a Revocable Living Trust?

By Andre Savoie

Living trusts have becoming an increasingly common and popular choice in estate planning in recent years because they offer a unique and smart way to protect your assets both while you are still capable of managing them and after you have passed away or fallen ill. A revocable living trust is a specific type of trust that differs from other trusts in important ways.

Trust versus Will

One of the main things a trust does is replace many of the functions of a will. You may still choose to have a will in addition to the trust to take care of any property that you do not incorporate into the trust. However, the main advantage of a trust as opposed to a will is that it does not need to be filed in probate court, which allows individuals a greater degree of privacy as there is no public record of all the assets in their possession.

A Revocable Living Trust

All trusts are entities into which one transfers their assets. The assets then become property of the trust rather than the individual. A revocable living trust is used so that individuals can put all of their property into a single location, allowing it to be distributed quickly and easily when the time comes for that process. The trust takes effect immediately, which is why it is called "living." The opposite type of trust is called a testamentary trust, and does not take effect until the person dies. At that point, their assets are transferred into the trust for disposal.

Controlling a Trust

In the meantime, most people choose to name themselves as the trustee as long as they are alive and competent, which means that they retain control over their assets even though the trust owns the assets rather than the individual. Revocable trusts can be changed, altered, or even dissolved at the discretion of the person who creates them as long as they are competent, at any time, and for any reason. In this way, this type of trust offers the greatest degree of flexibility while providing the degree of protection and privacy desired by people considering a trust.

To summarize, some of the advantages to a revocable living trust include:

- flexibility to change or dissolve the trust while you're alive

- Ability to serve as the trustee of your own trust

- Privacy because no will needs to be filed

- Savings after death because avoids the costs and delays of probate court

These flexible trusts are a great choice for many people. If you are interested in this or other options regarding trusts and estate planning, it is important to consult someone with knowledge and experience before making these important decisions.

If you want to learn more about revocable living trusts and how they can benefit you and your loved ones, find out why Virginia families have trusted the estate planning attorneys at Flanders and Wade for more than 20 years. Contact them today via their website for more information.

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Estate Taxes and Trusts Law

By Carl Gompf

Estate taxes, sometimes called inheritance or death taxes, are levied on property that is passed to heirs after death. The Economic Growth and Tax Relief Reconciliation Act, passed in 2001, reduced federal estate taxes gradually over the past ten years. This year, 2010, there is no tax at all on any estate. However, the tax is scheduled to return in 2011. In 2011 the tax rate will be 50 percent on any estate worth more than $1 million, a figure that is not hard to reach for many people.

Lawmakers are currently debating if the repeal of the tax should be let to stand. Without action by Congress only $1 million of an estate can pass tax free whereas in 2009 decendents could pass $3.5 million tax free.

Estate taxes are payable to the IRS nine months after the date of death. Regardless of the ultimate makeup of any new estate tax law, there are effective ways to reduce estate taxes by the use of trusts. The following is a list of the more common types of trusts:

• Living trusts
• Family trusts or revocable living trusts
• Irrevocable trust
• Special needs trust
• IRA trust
• Income rust

If you have received a recent inheritance, have a special need case involving a minor or incapacitated adult relative, or need assistance with an IRA or other income trust, a skilled trusts attorney can assist you with the various trusts that are available. Trusts law is complex and your lawyer can fully advise you.

Family Trusts - Revocable Living Trust

Revocable living trusts or family trusts are trusts that can be terminated or modified at any time by the grantor for any reason. An irrevocable family trust cannot be terminated or changed under any circumstances. Properly created trusts can maximize the amount of your estate that will flow to your relatives. One of the principal benefits for creating an irrevocable family trust is that your assets are then protected from nursing home expenses or uncovered medical expenses.

Special Needs Trusts

A special need trust can be created to provide for your minor children or incapacitated adult relatives for their care after you are gone and until they are old enough or healthy enough to care for themselves. A parent can name a trustee to be in control of the finances and to decide whether to sell or keep property, and manage assets such as real estate.

IRA Trusts

Trusts work particularly well with Roth IRAs, since there are no required distributions until after the death of the owner. A skilled estate planning attorney knows how to create see-through or conduit trusts that are particularly beneficial for passing assets to grandchildren by naming trusts as beneficiaries of the Roth IRA. If you are looking to set up or learn more about income trusts other than an IRA or would like more information on the IRA trust option, contact one of our qualified attorneys at Lance P. Armstrong, PLLC today.

Staten Island estate planning law help
Contact a Staten Island trusts attorney at The Law Firm of Lance P. Armstrong is an experienced lawyer who handles complex matters of trusts in estate planning and estate and probate matters.

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