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PLEASE READ HELPFUL INFORMATION TO BETTER UNDERSTAND THE LEGAL NATURE OF LIVING TRUST (AS YOUR MECHANISM OF SMART ESTATE PLANNING)
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How does the Revocable Living Trust Work?
Example 1. You and your spouse, as a married couple, can provide in a revocable living trust agreement that all or part of your assets are declared to be held by you as Co-Trustees, for your benefit during your lifetimes, and upon death of either of you will go to the surviving spouse, or in the event of simultaneous deaths will go directly to designated beneficiaries. Immediately upon the death of either spouse, all legal interest in all the property automatically reverts to the surviving spouse, as sole trustee, free and clear from any probate processes or other court delays. The surviving spouse then has the option to place the assets in another revocable trust with an adult child or other family member as Co-Trustee and avoid probate again and again.
Example 2. You, as a single unmarried person, as grantor, provide in a revocable living trust agreement that all or a part of your assets are declared to be held by yourself and a third party as Co-Trustees, for the benefit of you as the grantor during your lifetime, and upon your death, to go to the beneficiaries designated in the agreement. Immediately upon your death, all legal interest in all property automatically reverts to the Co-Trustee, as the sole trustee, to be transferred as directed by you as the grantor in the agreement. If the beneficiary is an adult, he or she could be the Co-Trustee, and upon your death, he or she would automatically have title to the property for himself or herself.
Note that although trusts can avoid probate, they do not
altogether avoid estate or gift
taxes, and a trustee must file an income tax
return for the trust and pay the tax on its
taxable income unless the income
is passed through to the beneficiaries - which is usually the case with the
Revocable Living Trust.
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Is your state a dower or curtesy requirements state?
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In most states the laws give to a surviving spouse certain legal rights that
cannot be defeated by a will. Some of these state laws, but not all, also give
to a surviving spouse certain rights that cannot be defeated by gifts, the
revocable living trust or other transfers. These marital property rights are
called community property, dower, curtesy, elective rights, statutory rights
or various other terms. These rights typically give one-half, one-third, or
some other portion of the estate of the deceased to the surviving spouse.
The laws of several states require grantors to leave a certain amount of money
to their spouses. The portion of property due a wife by law is called dower,
the portion of property due a husband from his wife is called curtesy.
Nowadays, when discrimination based on sex is not an issue anymore, vast majority
of states have abolished dover and curtesy rights.
Dover and Curtesy States:
Hawaii, Kentucky, Massachusetts, Michigan, Ohio, Vermont
Community Property States: Arizona, California, Idaho, Louisiana, Nevada,
New Mexico, Texas, Washington, Wisconsin.
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Learn more 
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Living Trust Legal Information
Living Trust Frequently Asked Questions
Living Trust Legal Articles
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Many times, a trust is established primarily because the beneficiary is in a lower tax bracket than the grantor.
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The establishment of several trusts can result in tax savings on a grand scale in some circumstances.
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Even the smallest estate may benefit
from the use of
a revocable living trust.
Note finally that if the trust agreement is recorded, its revocation must also be
recorded. However, no lawyers, judges, or lengthy court proceedings are needed to
revoke a living trust. The trust may also be amended easily at any time during the
lifetimes of the founders. In fact, as family circumstances change, the trust
SHOULD be amended to reflect changes.
The grantor is in complete control of the property and it can remain
a private matter, since it is kept out of the hands of the probate lawyers.
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Marital Property Rights
In most states the laws give to a surviving spouse certain legal rights that cannot be defeated by a will. Some
of these state laws, but not all, also give to a surviving spouse certain rights that cannot be defeated by gifts, the revocable living trust, or other
transfers. These marital property rights are called community property, dower, curtesy, elective rights, statutory rights, various
other terms. These rights typically ...
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Read more useful information:
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Legal Helpmate Corp. is not a law firm and does not give legal advice. If difficult legal issues are involved,
you should consult an attorney. Legal Helpmate Corp. is a online legal document service that provides
you with an appropriate Living Trust form.
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