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 : Problems With Alternative Probate Avoidance & Joint Tenancy

Estate Tax Exemptions
The estate tax exemption refers to the amount each person may pass free of estate taxes at death. The Economic Growth and Tax Relief Reconciliation Act of 2001 raises the amount that taxpayers can exempt from estate taxes with increasing amounts phased in over the period 2002 through 2009. In 2010 the Estate Tax is scheduled to expire altogether. However, unless Congress and the President enact additional legislation before 2011, the Act returns the exemption to the pre-2004 level of $1 million.

(Note: If the decedent has used any of the $1 Million gift tax exemption during life such amounts will be deducted from the available estate tax exemption.)

Again, Don’t Confuse Estate Tax Levels With What Triggers Probate
Remember, probate and what triggers probate has nothing to do with taxes or how much you can pass tax free. In California any estate worth over $100,000 (one-hundred thousand) or over $20,000 (twenty-thousand) in real estate property triggers full probate. Virtually all states follow a similar rule (many with even lower threshold values that trigger probate). If you own a house or any real estate property, count on the fact that your estate will be subject to probate unless you take steps to prevent it.

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