Why a Living Trust?

Introduction

A Forewarning

Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17

Why a Living Trusts : The Government Has No Problem With Trusts

Trusts Are Constitutionally Recognized & Protected!
People sometimes mistakenly develop the notion that the government may have a problem with Living Trusts. Such notions are misguided, as just the opposite is true. First, trusts have been around since the 16th century and are a well-established, constitutionally recognized and protected part of the law. Second, as previously stated, probate fees are not a tax, therefore the government is indifferent to whether or not you avoid probate. In actuality, it saves money when the state does not have to probate an estate. It does not matter what method you use to pass your estate because its effect is completely neutral as to the government. That is why there has been zero movement at any level of the government to take away Living Trusts. (The only movement has been money out of probate lawyers’ pockets!)

Trusts Are Estate Tax Neutral
Over and over it has been stated that a Living Trust is about avoiding probate. Though a husband and wife can structure a Living Trust to take advantage of both estate tax exemptions, technically speaking you can do the same thing with a Will. (Again that involves using a Will to create a testamentary trust which seems to most, a little crazy.) None the less, for this and many reasons no one should ever look at a trust as an estate-tax “dodge” or asset protection scheme. It is not. This is another reason why the government doesn’t care how you pass your estate. Whether it is passed by a Will, a trust, joint tenancy, life insurance, annuities, paid on death accounts, other beneficiary designations, or a combination -- they simply add up the total of them all to determine if you owe an estate tax.

Tax Reporting & Your Affairs Stay The Same With A Living Trust
Though a trust works wonderfully if you become incapacitated or pass away, its effect on your affairs is completely transparent and neutral while you are alive and well. That is why your real property cannot be re-assessed nor does it affect your income taxes or how you report them. (Everything remains under your individual Social Security Number). It neither increases your liabilities nor does it decrease them. It of course does not decrease your rightful obligations to your own creditors, but more importantly neither does it increase your liabilities or expose your assets to other people’s creditors like alternative methods do.

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