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Revocable Trust benefit is very dependent on your State estate / death tax rules, as well as certain wealth threshholds. (For your state and for IRS). Single vs married also needs to be considered (double the exempted threshholds in some states if married)
<$3m estate, a trust is not usually beneficial.
Over $3m a trust can be significant benefit. A trust will give your heirs a 'step-up' cost basis in many instances. It is also a good way to distribute to minors. (If you still have dependent kids)
Setting up a revocable living trust won't affect income taxes in the slightest.
heirs get a stepped up basis without the trust regardless . revocable trusts do nothing for estate taxes , local or federal . they are transparent and offer nothing tax wise you don't have or can't do without them . .
a revocable trust brings nothing to the reduced taxes party .
all those tax advantages can only be had when an irrevocable trust is used .
Revocable trusts can also provide a way for heirs to keep and maintain inherited property. Family homes and vacation properties can remain in the trust for generations.
no great benefit as very few of us really want to be saddled with a piece of property forever . the whole advantage is things avoid probate and you can add stipulations and instructions .
the real powerful advantages are only in an irrevocable trust . reducing estate taxes , creditor protection , medicaid planning , etc. all these things are not an advantage of anything revocable
Last edited by mathjak107; 06-02-2016 at 07:28 AM..
We have one to avoid probate for our heirs. We have several properties and investment accounts so it makes sense in our case; if we had just one or 2 properties we wouldn't do this. Over time, if we sell off our properties, we may dissolve the Trust and go with a simple will. It just depends on your situation. I did not want a will that would be tied up in probate and wanted to empower my executor to move ahead quickly for the sake of my tenants and beneficiaries.
i agree , they are useful for avoiding probate . but as i pointed out earlier , if you ever need to utilize medicaid for long term care having the house in a revocable trust may burn you .
i think before folks do a thing they really have to review what they hope to accomplish .
we ended up needing a irrevocable disclaimer trust . that is a trust that becomes irrevocable once it is activated and we needed it to enhance the amount we can pass to heirs and not have triggered new yorks estate tax level .
the beauty of it is the surviving spouse has 9 months after death of the other spouse to decide whether or not to split the assets in half in to the trust .
with ny going up to 5 million we no longer need the trusts activated but if we ever do they are in place .
if the decision not to throw the switch is made then the trusts are transparent and things stay just as they are . it was perfect for us as neither one of us wants 1/2 our assets not fully under our control and bound by limitations on what money can be taken once the trust activates .
Last edited by mathjak107; 06-02-2016 at 07:40 AM..
If you have sizeable assets and are worth a lot of $$ then a revocable trust is a must. You'll be able to avoid probate and save money on taxes and other expenses that you would have without one. Big advantage also is you can designate to whom you want what you want to inherit and it can't be contested. All your assets, house, vehicles, furniture, tools, coin collection artwork, etc etc are listed in the trust and would have a named person you would want to have the items. If at a later date you want to change the trust (it's revocable) or dis-inherit someone you can.
Our cost $1100.00 and is about 2 inches thick spelling out everything legally and where everything goes. Saves a big headache for loved ones when you're gone. You also can dictate in the trust burial instructions, charities you want to give to, type of care if incapacitated, care home, power of attorney if needed, etal. A qualified estate attorney will be able to assist you, set up, notarize and record everything for you.
It's an easy step by step method to distribute your assets when you're gone and relieve all responsibility of not having the courts take over and mess up your estate.
Agree with all but taxes. How did this save taxes other than any associated with the probate process?
Burial instructions can be a problem as a will or trust may not be read until after the funeral so be sure the proper people know your wishes and I would also keep a copy of the instructions at home so they can be accessed.
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