Irrevocable trusts to avoid Medicaid and nursing home liens
REVOCABLE LIVING TRUST
A Revocable Living Trust is a legal device that allows you to maintain complete control over your assets and AVOIDS PROBATE.
Because there is no probate of a Living Trust, your private financial matters remain private, there are no probate costs, no long delays and loss of control, and no fragmentation of the estate.
You Maintain Complete Control Over Your Property In Trust
The principle behind a Revocable Living Trust is simple. When you establish a Living Trust, you transfer all your property into the Trust, and then name yourself as trustee, or you can name you and your spouse as co-trustees of the Trust. The trustees maintain complete control over the property, the same control you had before your property was placed in trust You can buy, sell, borrow, pledge, or collateralize the trust property. You can even discontinue the Trust if you choose. That is why it is called a "Revocable" Living Trust. We will explain the "Irrevocable Trust" at the end of the article.
Transferring Property Into The Trust
The transfer of title to property into the Trust is a relatively simple matter. Anywhere you have assets, you will get help in transferring your property into the Trust. Your attorney, securities investor, etc., will provide you with assistance needed to transfer your property into your Revocable Living Trust. Your attorney will provide all the information and assistance you need to properly fund your Trust.
Probate records are public, your Revocable Trust documents are private. A Revocable Living Trust will safeguard the privacy of your family and your private financial matters.
Naming A Trustee
Most people name themselves and their spouse as the initial Trustees of their Trust. This is usually true unless one spouse is incapacitated to the point that he or she is not able to manage your assets in the same way you do now.
Gifts To Religious And Charitable Organizations
Many people wish to give a portion or sometimes all of their assets to a religious or charitable organization in order to carry on the work of those organizations that have given them comfort or peace of mind during their lifetimes. This is easily accomplished with a Revocable Living Trust.
Marital Tax Deductions
Federal estate taxes must be paid on any estate worth more than $3,500,000 in 2009 beginning at a tax rate of 37%. Your estate includes not only the current value of your real estate, but also the face value of any life insurance policies, pension or retirement benefits, IRA accounts, bank accounts, stocks and bonds, etc. When you add these all together, and subtract your debts, your might have imagined.
Current tax laws allow you to leave an unlimited amount to a spouse, tax-free. When your spouse dies, the estate is entitled to a $3,500,000 in 2009 tax exemption. The first $3,500,000 in 2009 goes to your beneficiaries free of estate tax. What is not generally known, is that you and your spouse are each entitled to a $3,500,000 in 2009 tax exemption. If the exemption is not preserved through the use of a Revocable Trust, it may be lost.
A Revocable Living Trust can easily be structured to automatically create separate Trusts upon the death of either your spouse. Here's how it works. If the wife dies first, the husband has total control of his Trust. Also, for the remainder of his life, he receives all income from her Trust and has the use of the assets whenever needed for living expenses. When he dies, each Trust will claim its tax exemption, and some will go tax-free to their children, or any other beneficiary they designate, without having to go through probate.
A trust which cannot be changed or canceled once it is set up without the consent of the beneficiary. contributions cannot be taken out of the trust by the grantor. Irrevocable trusts offer tax advantages that revocable trusts don't, for example by enabling a person to give money and assets away even before he/she dies. opposite of revocable trust.
Irrevocable Trust Accounts _Irrevocable trust accounts are deposits held by a trust established by statute or a written trust agreement in which the grantor (the creator of the trust - also referred to as a trustor or settlor) contributes deposits or other property and gives up all power to cancel or change the trust.
An irrevocable trust also may come into existence upon the death of an owner of a revocable trust. The reason is that the owner no longer can revoke or change the terms of the trust. If a trust has multiple owners and one owner passes away, the trust agreement may call for the trust to split into an irrevocable trust and a revocable trust owned by the survivor. Because these two trusts are held under different ownership types, the insurance coverage may be very different, even if the beneficiaries have not changed.