Protect Your Legacy with Trusts

By: Roger Sorensen
Submitted: 2007-01-17 16:15:25
Print this article | Tell a friend | For publisher | Social Bookmarking
Rating:
 

Were you aware of the fact that almost 1 in 4 people over the age of 50 have a living trust? When used as a part of an estate conversation plan, tursts can help preserve more of your assets for your heirs while minimizing the delays and costs of probate court.

A trust is a legal arrangement where one person or institution controls property given by another person for the benefit of a third party. If you don’t have a trust or don't know if you might need one, keep reading to learn more about A-B (bypass) trusts, irrevocable trusts, and life insurance trusts. When used as a part of your planning, these trusts can help safeguard your legacy.

A-B Trusts

With a properly structured A-B provision, a living trust can allow married couples to exempt twice as much of their estate from taxes as they can otherwise. When one spouse dies, the trust is split in two. The surviving spouse s assets are then transferred to the A trust, while the assets of the deceased spouse go to the B trust. Each trust then becomes a taxable entity entitled to the current estate tax exemption ($1.5 million in 2005).

Irrevocable Trusts

An irrevocable trust is established by you relinquishing control of your assets while still alive. Depending on the way the trust is set up, you may or may not get the use of the asset during your lifetime. This is an option you do not want to enter into lightly, as once you give up the asset, you can not get it back.

Life Insurance Trusts

If relinquishing control of your assets is not your cup of tea, why not consider establishing a life insurance trust to pay the estate taxes on any assets valued above the estate tax exemption amount? A life insurance trust will hold an insurance policy in an irrevocable trust, so the policy itself is not taxable. At your death, it can then be used to help give your beneficiaries the cash they need to pay estate taxes.

Just like any other part of your estate plan, you need to reexamine your trusts on a regular basis so as to protect any newly acquired assets and to update your list of beneficiaries.

Roger Sorensen

America's Financial Guide can be found at ==>http://www.Slave2Work.com Subscribe to Money Basics via http://www.slave2work.com/ezine.html

Slave2Work.com - Are you ready for financial freedom?

Article source: Expert Articles

Most Recent Articles in Estate Plan Trusts category

  • Choosing Guardians for Children - By: Jamie Kahn
    The most important decision you'll make in your estate plan is appointing guardians for your minor children. Who you pick will impact not only your children but also the lives of your guardians. While you and your children may feel an affinity for a particular adult(s), that relationship could be strained in a 24-hour-a-day, 7-day-a-week environment.
  • How To Protect Your Retirement Savings For Your Golden Years - By: Gregg Hall
    Retirement is a glorious time every working individual looks forward to. It is a time of freedom, rest, and relaxation. It is also a time to do what you did not have time or resources to do when you were working.
  • Some Simple Strategies For Protecting Your Assets - By: Gregg Hall
    As elementary as it may sound, no matter how much money you make, you still need to find ways to hold onto it. There are many small steps to take that will add up to big savings in the end. If you value the assets you have accumulated, or if you feel you should be accumulating more, take this advice and make some minor changes.
  • Reverse Mortgage Supplemental Retirement Financing Strategy - By: Jon Hansen
    A reverse mortgage is a loan for senior citizens. It is often used to cover medical expenses, and is becoming a common way for retired persons to supplement their existing monthly retirement income.This is a loan that senior home owners may take against their current home.
  • Understanding The Benefits Of Forming Trusts - By: Alexander Gordon
    What is a Trust And Who Are The Settlor, Trustee And Beneficiaries?A trust is an institute of a special type of structure capable of holding title of the property-providing benefits to one or more people. It is a lawful relationship between the two people, the settlor and the trustee.
  • Trust Deeds – Breath A Debt Free Life at Easy Terms - By: Linda R Davis
    Trust deeds are considered as a convenient settlement of debts a debtor is no more able to pay off. The trust deeds are a method used in Scotland for easy clearance of debts. Usually elsewhere for lessening and time bound pay off of debts, debt management program is sought by the debt ridden person.
  • Ira Trusts: What's All The Hype About - By: Perry Fields
    A recent new development in estate planning is helping thousands of affluent people across the country with IRAs over 100,000 transcend estate tax and income tax. It keeps your beneficiaries from blowing all of the money you’ve worked so hard for.Its gives YOU the control over the conditions which must exist before your beneficiary can access the funds (other than the mandatory IRA distributions).
  • Enduring Power of Attorney Being Phased Out - By: Adrian Tatum
    In the UK the new mental capacity act is due to come into force on the first Monday in April 2007.The Act governs decision-making on behalf of adults who lack mental capacity, both where they lose capacity at some point in their lives, and where the incapacitating condition has been present since birth.This act covers all decisions, including personal welfare and financial matters, and covers decision-making on their behalf by attorneys, or court-appointed "deputies".
  • Probate and Estate Sales - By: Mika Hamilton
    “It's all about quality of life and finding a happy balance between work and friends and family.”-Philip GreenProbate and estate sales usually occur when someone wealthy dies. Estate sales have to be conducted because the decedent did not leave a will and everything is in his name.
  • Anguilla as a Offshore Jurisdiction - By: Gissela Martinez
    Anguilla is another jurisdiction with misleading bank secrecy. Commercial confidentiality is contained in the statues, BUT the government of Anguilla will co-operate fully with law enforcement agencies and regulators in other jurisdictions, think wholesale fishing expeditions and inquiries related to “possible” income tax violations. In other words records may be requested just to see if in fact there were any taxation violations that citizens of a certain country may have committed using Anguilla as a jurisdiction.