“Trusts are for millionaires. If I am not a millionaire, why would I make a Living Trust instead of a simple will?”
You may have heard someone you know say something like this. Perhaps you believe this too. What’s the truth?
Estate taxes got a lot of press in the past few years during Congressional debates over the budget. The latest law that went into effect 1-1-2013 sets the federal estate tax exemption at $5.25 million per person, so it is not a factor any longer for most Americans.
If you are one of the relatively few Americans who have an estate that would be taxable, then one or more type of Living Trusts is probably advisable, especially if you are married. Married couples can shelter about twice as much from federal estate taxes compared to unmarried if they make the right kind of Living Trust.
But that does not mean estate planning with Living Trusts is less important for the rest of us now than before the new tax law. Avoiding taxes is just one of many reasons why people make a Living Trust the centerpiece of their estate plans.
Over the next few blog entries we’ll be looking at some of the top non-tax benefits of a Living Trust that apply whether you’re a millionaire or not.
In fact, we’ve identified at least 23 reasons, which are detailed in our report, “Top 23 Reasons to Make or Update Your Living Trust, Besides Taxes.” With apologies to David Letterman, we’ll count down to what we consider the number one reason, and touch on the most widely applicable reasons as we go. We’ll complete the countdown over the next few weeks.
22: You can plan for heirs who have complex personal problems, such as substance abuse.
Using a Living Trust you can set controls on an inheritance so that loved ones with a history of substance abuse or addictive behavior will not squander an inheritance on self-destructive vices.
21: You can be sure that the wrong people won’t inherit your estate.
A Living Trust is inherently more difficult to successfully challenge than a will. That’s comforting to know especially where there are people who may have their sights set on your money whom you would not approve.
20: You can ensure your business’s survival.
In the event of your incapacitation or death, a Living Trust can prevent your sole proprietorship or general partnership business from having to close and liquidate as the law would otherwise require. This links to Reason 19, which is that a Living Trust offers ways to fairly and effectively transition a business or family farm to the next generation that a simple will can’t.
18: You can provide for children from previous marriages.
A Living Trust lets you provide financially for your spouse without sacrificing the legacy you want to leave your children.
17: You can designate funds exclusively for your children’s or grandchildren’s educations.
With a Living Trust, you can be sure that inheritances end up used in accordance with your own wishes, despite what beneficiaries may have planned for themselves.
Stay tuned for the next installment in this informative series! And don’t forget, you can always request a FREE copy of our report: “Top 23 Reasons to Make or Update Your Living Trust, Besides Taxes.”