How You Can Save Thousands Of Dollars
With A Living Trust!
(Page 4)

Third, look at the credentials and experience of the Law Firm. How many years of experience do they have in Estate Planning?

It's even more important that you ask if they have handled Living Trusts after their clients have died — when they're really tested. How many deceased clients' Trusts have they handled?

4. Having a Living Trust replaces a need for a will.

This is another very mistake that is made with Living Trusts!

You need a Will too. Specifically, you need a Will with "pour over" provisions set up in conjunction with your trust. What this will does, is two-fold.

First, it handles any assets whose titles haven't been transferred to the trust. So, if you forgot to transfer the title on a stock or whatever, it would end up being distributed through the probate process.

Second, if there are minor children involved, a Will is where the guardians are appointed and then approved by the court. Without this will, the state would pick the guardians! That's not good!

So please remember... your Living Trust is the primary estate planning tool, the Will is only a back-up.

5. Having your assets in "joint tenancy" eliminates the need for a Living Trust.

This final misconception is a biggie.

Let's look at a real simple asset like a CD. (Although we don't think people should own too many of these, but we won't get into that now. When you are ready, we can show you some alternatives you just might like!

If you own a CD in both names, as joint tenants, with the rights of survivorship, (JTWROS) you may not think you need the trust. After all, the asset will be immediately retitled into the sole name of the surviving spouse, so why bother with a trust?

While it's true that the asset will not go through probate when it's set up in JTWROS. This may be the worst way to own any asset. Not because of probate, but because of estate taxes!

See, when you own assets in JTWROS, you will completely forfeit the marital deduction on that asset. This can cause enormous additional estate taxes.

For example, a clients of ours unfortunately lost his mother to cancer a few months ago.

Her son, had no previous involvement with his mom's money.

Well, it turned out that his parents had invested all their money in CD's, (first big mistake) and all of it was JTWROS (second big mistake)

In structuring the ownership of their assets in JTWROS, they had lost the $650,000 marital deduction on the second spouses death, and their kids had to pay just over $250,000 in estate taxes that were totally unnecessary.

If they had made a few simple changes to their estate planning, none of those taxes would have been paid.

$250,000 -- Is that sad, or what?

There is another benefit to avoiding JTWROS, and putting the assets into a trust.

If, for some reason, you become physically or mentally impaired, and can no longer manage your affairs, the trust will have provisions for who and how the assets will be managed.

No hassles!

With an aging population, ever concerned about long term health care needs, it is vitally important that you structure your financial assets so that you can give yourself the greatest degree of flexibility and control in the future.

In the last example, if our client's mother had become incapacitated before she got sick, she could have named her son in the trust to manage her affairs for her. He wouldn't have had to hire lawyers to apply for conservatorship, and so on.

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