BA Harris LLP

What would you like to know about Living Trusts?

Published on Monday, January 23, 2012

Trusts often sound like something just for the wealthy but that is not true! Here are some useful facts about Living Trusts:

A Living Trust is set up while you are still alive. It is a tool used to provide for an orderly transfer of your assets to your heirs with minimal fuss.

A trust can save money. In Idaho, upon death, the county courts oversee the distribution of your assets to your heirs. This process is called probate. Many individuals hire an attorney to help them through the probate process. Many do not. If your assets are held in a living trust you can bypass the probate process. In addition, because the assets do not go through probate, they are not a part of the public record and privacy is maintained.

A Living Trust is revocable. This means you can add and remove assets from the trust, change the beneficiaries or completely eliminate the trust whenever you desire.

A Living Trust puts you in control. You determine who manages your trust assets and affairs when you are gone or if you become incompetent. You name the trustee. This helps avoid family disputes.

A Living Trust does not save income taxes or estate taxes. During your lifetime, any income from trust assets would be yours and reported on your individual income tax return. Because the trust is revocable and you still have the ability to control the assets in the trust, the assets would still be included in your estate at death for determining the estate tax. Currently, if you have an estate over $5,000,000, an estate tax return would need to be filed and taxes would be due at 35% on those assets over the $5,000,000 exemption.

To set up a Living Trust, see an attorney who specializes in that area. There are also many other types of trusts that may benefit you, including trusts designed to provide special care of relatives in need, insurance trusts, and trusts that provide long term direction in providing income for your spouse or other heirs.

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