Solution - The Living Trust

The law favors using a Living Trust, since it not only avoids Probate, but also eliminates the Gift Tax (sometimes called an Inheritance Tax). At death, all trust assets "Step-up in Basis", to equal the current market value of the asset. Therefore, at death the heirs are not forced to deal with financial losses while they are having to deal with the emotional loss.

Heritage Trust has a long history of helping families protect both their assets and their families from the losses of Probate and Joint Ownership. When a Living Trust is implemented and properly funded, you have beaten the Probate system to the punch by effectively transferring your estate, during your lifetime, to your Trust. If you delay in preparing a plan like a Living Trust, the Probate Court will assume the responsibility of transferring title to your assets. It is hard to imagine that engaging courts, attorneys, appraisers, and executors for a 1 to 3 year-long process will be less expensive than a Living Trust. Yet people for some reason still believe that Wills are less expensive!

While the initial cost of preparing a Will is generally less than a Trust, dying with a Will is almost always far more expensive than dying with a properly funded Living Trust. Try asking an attorney to guarantee, in writing, that the cost of Probate will only be $1,695.00 with a Will. He will refuse. The reason he won't do it is simple... he can't! A Living Trust is truly a financial decision that can save you thousands!

Currently, Federal Estate Taxes start at 37% and go as high as 55%. When you calculate the size of your estate for Federal Estate Taxes, you must include all life insurance death proceeds, as well. Probate does not take life insurance into account unless the beneficiary of the policy is the person's estate.  If an estate is $3,725,000, it is over the current limit by $125,000. The minimum tax due is 37% of $125,000, or a total of $46,250.00.

"If you earn it, they tax it. If you spend it, they tax it.  If you give it away, they tax it. If you die with it they tax it!"

 This tax is due and payable no more than nine months after the day of death. You pay or they confiscate and sell assets to pay the tax and rarely at their true value...hence, estate sales.

Have you ever heard of an "Estate Sale"? The Living Trust is very helpful in reducing or eliminating the Federal Estate Tax with the creation of a "marital trust" that allows you an extra $3,500,000 exemption. So, a married couple may combine their exemptions to protect up to $7,000,000 from Federal Estate Taxes. If your Estate is over the limit and you need extra protection, an Irrevocable Insurance Trust is a good idea. An Irrevocable Insurance Trust removes your life insurance death benefits from your Estate and allows most people a very creative way to protect their Estate from the Federal Estate Tax. Bottom Line: It takes good planning to protect your assets from the largest tax of your lifetime and that's what Heritage does best.

Next Topic - The Downside >