Part Two

Revocable Living Trusts are inexpensive

Revocable Living Trusts are inexpensive in comparison to the minimum costs of probate. Since a number of various kinds of Revocable Living Trusts exist, it is difficult to say how much Revocable Living Trust will cost you, but it will probably cost between $1,000, and $1,500

Revocable Living Trusts are private

In contrast to probate proceedings, which are open to the public, Revocable Living Trusts are private documents. Consequently, only your successor trustees and beneficiaries know the extent and degree of your assets, the number and amount of your debts, and what relatives or friends received what portion of your overall estate.

Maximizes tax advantages

With a Revocable Living Trust, on the date of the death of the first spouse or single person, beneficiaries will receive an automatic 100% step-up in basis in all of the real property, stocks, and bonds. Therefore, beneficiaries will not have to pay any capital gains tax on the sale of said property, to the extent that the assets are protected by the Trust.

In addition, the Revocable Living Trust is able to double the Federal Inheritance-Tax Exemption from $675,000 to $1.35 million if your assets are over $675,000. Remember, you could accomplish the same thing with a Will, by inserting what is known as a Testamentary Trust into the Will. However, if you should choose to double the Federal Inheritance-Tax Exemption by inserting a Trust in a Will, you would first have to go through probate and pay the cost of probate, in order to later establish this type of Trust. But, if you have a Revocable Living Trust with a second trust inside the Revocable Living Trust, you will not have to go through probate to double the Federal Inheritance-Tax Exemption.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.