An Introduction to Living Trusts and ProbateChapter 1 – Probate and Why People Try to Avoid it
Chapter Overview
Overview of the Probate Process
What are the Steps Involved in Probate or Intestate Administration?
How Long Does it Take?
How Much will Probate Cost?
Disadvantages of Probate
Advantages of Probate
Conclusion
Chapter 2 – Probate Avoidance Measures
Chapter Overview
Introduction
Advantages and Disadvantages of Probate
Avoidance Measures
Payable on Death or Transfer on Death Accounts
Transfer on Death Securities
Retirement Accounts
Joint Accounts
Custodial Accounts
Savings Bonds
Life Insurance Proceeds
Joint Ownership of Property
Joint Tenancy
Tenancy by the Entireties
Community Property
Revocable Living Trust
Gift
Probate Free Transfers of Assets
Transfer of Vehicles
Simplified Transfer Procedures for “Small Estates”
Chapter 3 – An Introduction to Trusts
Chapter Overview
What exactly is a Trust?
The Origin of Trusts
Basic Types of Trusts
What Exactly are Living Trusts?
Parties to a Living Trust
The Development and Growing Use of Living Trusts
Chapter 4 – Advantages and Disadvantages of Living Trusts
Chapter Overview
Advantages of Using a Living Trust
Avoids Probate
Saves Money
Avoids Publicity
Provides Protection During Incapacity
Management of Children’s Inheritance
Flexible
Inexpensive and Easy to Create
Peace of Mind
Disadvantages of Living Trusts
Failure to Fund the Living Trust
Doesn’t Completely Avoid Delays in Distribution of Assets
Lack of Court Supervision
No Real Tax Savings
(i) Income Tax
(ii) Estate Tax
Limited Financial Savings for Smaller Estates
No Protection from Creditors
A Will is Still Required
Capable of Being Challenged
Chapter 5 – Types of Living Trusts
Chapter Overview
What Type of Trust do You Need?
Living Trust for an Individual
Living Trusts for Couples
Individual Living Trusts
Basic Shared Living Trusts
Basic AB Trusts
How Does an AB Living Trust Work?
Disadvantages of an AB Living Trust
AB Disclaimer Trust
Conclusion
Chapter 6 – Successor Trustees
Chapter Overview
The Role of the Initial Trustee
Appointing a Co-Trustee
Appointing a Successor Trustee
Appointing an Alternate Successor Trustee
The Role of the Successor Trustee
Should Trustees Get Paid for Their Work?
Who is entitled to act as a successor trustee?
Whom Should You Choose as a Successor Trustee?
Successor Trustee’s Duties and Responsibilities
The Duty to Adhere to the Terms of the Trust
Duty to Secure Assets
The Duty to Act Personally
The Duty to Act in the Best Interests of the Beneficiaries
The Duty to Account
The Duty to Supply Information
The Duty to Invest Prudently
The Duty to Carry out Duties Without Payment
The Duty to not Benefit Personally from the Trust
Keeping Trust Assets Separate
Paying Taxes, Claims and Expenses
Making Payments from the Trust
Changing Trustees
Removing a Trustee
Conclusion
Chapter 7 – Making Gifts Under Your Living Trust
Chapter Overview
Types of Gifts Under a Living Trust
Specific Item Gifts
Cash Gifts
Gift of the Residuary Trust Estate
What is a Beneficiary?
Types of Beneficiaries Under a Living Trust
Specific Gift Beneficiary
Alternate Beneficiary
Residuary Beneficiary
Beneficiaries Under a Shared Trust
Gifts to Spouses
Community Property States
Common Law States
Gifts to Minors
Custodianship
A Child’s Trust
A Family Pot Trust
Gifts to Charities
Failed gifts
Disinheritance
Disinheriting Your Spouse
Disinheriting Your Child
Management of Children’s Property
Options for Property Management
Appointment of a Property Guardian
Uniform Transfer to Minors’ Act
Child Trusts
Chapter 8 – Estate Taxes
Chapter Overview
Estate Tax
Federal Estate Tax
State Death Tax
State Estate or Death Taxes: Paid by the Estate
State Inheritance Taxes: Paid by the Recipient of Property
“Pick-up” Taxes
Marital Deductions
Charitable Deductions
Other Ways to Reduce Estate Taxes
Lifetime Gifts to Children and Grandchildren
QTIP Trust
Irrevocable Life Insurance Trusts
Family Limited Partnerships
Private Annuity
Qualified Family Owned Business (QFMOB)
Special Use Real Estate Valuation
Conclusion
Chapter 9 – Transferring Assets to Your Living Trust
Chapter Overview
Introduction
What Assets Should be Put in Your Living Trust?
Title to Assets Transferred to a Living Trust
Employer Identification Numbers
How to Transfer Specific Property to a Trust
Real Estate
Types of Deed
Title Insurance
Mortgage
Out-of-State Property
Homestead Rights
Tax on Transfer Deeds
Tangible Personal Property
Cars, Boats and Other Vehicles
Cash Accounts
United States Savings Bonds
Broker Accounts
Publicly Quoted Stocks and Bonds
Retirement Plans
Life Insurance/Annuities
Other Property
Chapter 10 – Executing and Making Changes to Your Living Trust
Chapter Overview
Executing Your Living Trust
Reviewing Your Living Trust
Amending Your Living Trust
Transferring or Removing Property From Your Living Trust
Revocation of Your Living Trust
Chapter 11 – Administration of the Living Trust Following the Grantor’s Death
Chapter Overview
What Must the Successor Trustee Do When the Grantor Dies?
Obtain Certified Copies of the Death Certificate
Obtain Tax Identification Number for the Trust
Notify Beneficiaries
Collection and Management of Trust Assets
Claim Life Insurance Proceeds
Gain Access to Bank Accounts and Other Financial Accounts
Identify Debts Owed by the Grantor
Maintain Proper Accountings of Trust Assets
Preparing and Filing Tax Returns
Federal Estate Tax
Income Taxes
Trust Income Tax Returns
State Taxes and Pick-up Taxes
Transferring Property to Beneficiaries
Administering a Child’s Trust
Conclusion
Chapter 12 – Ancillary Estate Planning Documents
Chapter Overview
What is a ‘Pour-Over Will?’
Avoiding Conflict Between Your Living Trust & Will
Planning for Incapacity – Durable Power of Attorney for Finance and Property
Planning for Incapacity – Advance Healthcare Directives
Living Wills
Healthcare Power of Attorney
Conclusion
Appendix 1 – Instructions for Completing Your Documents
Revocable Living Trust for an Individual
Revocable Living Trust for a Couple
AB Revocable Living Trust for a Couple
Deed of Assignment for Use with a Revocable Living Trust for an Individual
Deed of Assignment for Use with a Revocable Living Trust for a Couple
Certification of Trust for Use with a Revocable Living Trust for an Individual
Certification of Trust for Use with a Revocable Living Trust for a Couple
Revocable Living Trust Agreement (Amendment Agreement) for an Individual
Revocable Living Trust Agreement (Amendment Agreement) for a Couple
Notice of Revocation
Appendix 2 – Revocable Living Trust Documents
Appendix 3 – Miscellaneous clause for use in a Revocable Living Trust Agreement
Appendix 4 – Deed of Assignment
Appendix 5 – Certification of Trust
Appendix 6- Revocable Living Trust Ammendment Agreements
Appendix 7 – Notice for Revocation of a Living Trust Agreement