Unfunded Living Trusts-Don't Let It Happen To You

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living Will

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I wanted to share with you a couple of key points about estate planning that you should know. One is about unfunded living trusts. What is that? You go to the attorney who sets up this document called a revocable living trust. You can access the money and it avoids probate. Sounds good, right? Well, if there is nothing in the trust, then it doesn?t work and your estate can go into probate which is a lengthy and expensive process. So how do you put assets in a trust? You title them correctly. For example, you wanted your savings account in a trust. The title on the savings account would say Fern Alix LaRocca, trustee for the LaRocca Revocable Living Trust. That way the bank knows that the savings account is part of a trust. Every asset that you want in the trust should have special titling that says so. If not, then it isn?t in the trust and if it isn?t in the trust, then that portion goes into probate if it exceeds $100,000.

There are many ?trust mills? that were out there promoting these revocable living trust documents. They meant well but they didn?t do the dirty work of going through every asset and changing the title. They expected the clients to do that. They used boiler plate documents that you filled in the blanks.

Now is the time to pull out those documents and see what is in your trust and what isn?t, and make the corrections. Why now? Because right now you need an estate worth $5,000,000 to be subject to estate tax but that will be expiring at the end of 2012 and then it is reduced to $1,000,000 unless it is?repealed?by the end of this year.

Of course if you have a simple estate that is less than a million, you can get by these:

Simple Will

Beneficiary designations on all accounts

Powers of Attorney

Durable power of attorney for financial care

Advanced Medical Directive

Joint Tenancy with rights of?Survivorship?titling (JTWROS)

Check your parents estate plan while they still have their wits about them and yours at the same time. You will be glad you did. Don?t make me drag out horror stories of what can go wrong when you don?t do this simple thing. It ain?t pretty.

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Tagged as: estate plan, trust, unfunded living trusts, will

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