Seven Things You Need to Know About Living Trusts [part II]
Aug. 27, 2014
This is the second installment of our two-part blog post discussing key things that people should understand about a revocable living trust. There are certainly many other issues to consider beyond those discussed when you are considering preparation of the transfer of your legacy, so the best way to obtain specific information about your situation is to speak to an experienced Wichita estate planning attorney.
Who can function as a trustee?
Any adult who is mentally competent can serve as a trustee. There are many trusts where a husband and wife will make themselves trustees, so they can maintain control over the assets in the trust while they are alive. However, legal advice is important because this form of living trust might preclude certain tax benefits. While a child might be named as a successor trustee, this might not be an appropriate option if you have concerns about whether your child will distribute the assets in the trust to the beneficiaries in accordance with the terms of the trust. If you have this type of concern, you might want to appoint a professional like an attorney or other professional fiduciary to serve in this role.
What if I do not have either a revocable living trust or last will and testament when I pass away?
If a decedent does not prepare either one of these asset succession instruments prior to passing away, the estate of the decedent will pass according to Kansas state intestacy law. The preferences under this statutory scheme often will not match up with an individual’s intentions and wishes, which can deprive a decedent of input on the distribution of his or her estate. Lack of even a basic estate plan also can have many other negative effects, which include adverse tax consequences, unnecessary probate costs and public disclosure of the composition and disposition of the assets that comprise an estate.
How much will it cost to set up a revocable living trust?
The cost of a living trust depends on many factors such as the complexity of your estate and the level of sophistication of the trust that fits your needs. However, our Kansas law firm offers a free consultation to evaluate your estate and determine your needs, so that we can provide an estimation of the cost to set up your trust.
Can I reduce my tax burden by setting up a revocable living trust?
While there are types of trust that can save taxes, revocable trusts do not provide an effective tax avoidance strategy. Because an individual who creates a revocable trust can continue to exercise management and control over his or her assets, the federal and state tax authorities are not going to permit this device to prevent tax liabilities. Further, the maker of the trust can dissolve the trust, so the creator of the trust does not give up ownership of the assets.
If you have questions about a revocable living trust, will or other estate planning instrument, we welcome the opportunity to talk to you and answer your questions. We invite you to contact the Weber Law Office or to submit an inquiry form through this website to schedule your initial consultation.