LIVING TRUST SOLUTIONS
HOW CAN A TRUST HELP YOU?
Avoid wasteful probate expense
A living trust is a contract. It protects your assets if you get sick. It works like private probate without the court if you die. When a person dies, assets in their name alone must go through probate court even if there is a Will. Wills don’t eliminate probate. Instead, they nominate a Personal Representative or person in charge to distribute assets to certain persons instead of others. A probate court matter usually costs at least $3,500.00 to $5,000.00 and takes about 9 months. Living trusts avoid probate costs and delay.
Protect your children when you remarry
Upon remarriage many people fail to protect their children from a former marriage. Assets are put in the name of the new husband and wife jointly. Insurance is left to the surviving spouse. Frequently, the surviving spouse does not share the inheritance with the children of the first spouse to die. Living trusts can make sure that the spouse and all the children are treated fairly.
Make sure your property goes where you want
Michigan law gives the surviving spouse a forced minimum share even if the Will leaves certain assets to the children. Without a Will, the spouse receives even more. The minimum share for a spouse is about $160,000.00 plus whatever was joint with the spouse and received as a beneficiary. In many cases nothing will be left for the children.
Reduce contested estates
If someone dies with assets in their name alone other than a vehicle, this property will have to be probated through the court system. If there is no Will, the assets go to the “next of kin.” With a Will the assets go to those named in the Will. Even if there is a Will, probate is still required. Even if the Will eliminates certain close family, they must still be notified and invited to contest the provisions of the document in the probate court. Living trusts require no such notice be given to disinherited relatives. Trusts reduce contested estates as the complaining relative must spend large sums of money just to get a look at the documents and find out if they have a case. This usually stops them cold.
Eliminate death taxes
Most people think the Federal Estate Tax or Federal death tax has been repealed. Instead, it is being gradually phased out and is fully repealed for persons dying in the year 2010. However, under the current rules, this tax will be reinstated in 2011. If not changed, this tax can be up to 55% on assets over $1 Million for people dying in 2011 or later.
We can use trusts, gifting and special ways to hold life insurance to substantially reduce or eliminate this tax.
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