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‘Tax planning’ crucial when considering a living trust.

By April 20, 2017No Comments

No doubt, you’ve read, or heard, something concerning the makeup of a living trust  and how it can give instructions on how to distribute your financial assets upon your death. In addition, a living trust can also be used to dictate the disposition of property in other states. Both scenarios require solid, tax planning strategies.

Simply put, a living trust not only carries out your wishes after your death, but also gives a directive to your appointed trustee to manage your assets if you’re deemed not capable of doing so.

Why it’s called a living trust.

Remember, while you’re alive, you can designate how you want your assets distributed, and provide your heirs with a modicum of protection from burdensome estate taxes. After you die, everything is in place to give your wishes the continuity you expected when you were alive—always, always consult with an attorney and financial partner before going down this road.

Can it be changed?

Your attorney will help you understand the pros and cons of the revocable and irrevocable trusts.

For example, by using an irrevocable trust the grantor (you) can make sure that the assets you transfer into the trust are safe from estate taxes after your death. Also, a life insurance policy placed in the trust may be appropriate, thereby allowing the trust’s proceeds to be removed from the policy owner’s taxable estate.

The irrevocable trust is just that: you can’t change it, and that’s why you receive all of its added advantages.

If you are a business owner, or an individual investor, contact us to start this very important conversation.