Many estate plans rely upon faulty or erroneous ideas of what constitutes a true estate plan.   One of the greatest miscalculations or misconceptions is that you may only need one type of trust to solve all of your estate planning needs.

 At TrustlockUSA we provide you with an array of trust options that include the revocable living trust but also includes an insurance trust or a “special needs” trust if one is necessary for one of your family members.

 Often an irrevocable trust is necessary in order to shelter assets from creditors including the IRS or other government entity.

 Check out the following chart to determine what solutions you are seeking from your planning documents.

 You may be surprised by what you find!

 

FEATURES/BENEFITS REVOCABLE TRUST (REVOCABLE LIVING TRUST) IRREVOCABLE TRUST
Asset Protection ABSOLUTELY NO Asset Protection. NONE. The Grantor, The Trustee, and the Beneficiary are generally the same person. The Grantor did not give-up control of the asset(s). YES. The Grantor no longer owns the assets. Assets have been transferred to the Trustee who has a fiduciary duty to manage the assets for the benefit of all beneficiaries, which may include the Grantor.
Eliminate Probate YES YES
Eliminate Estate Taxes NO YES. Assets are not subject to the Estate Tax. The deceased did not “own” the assets or have assets in his possession at the time of his death.
Defer / Reduce Capital Gains Taxes NO YES. Assets transferred to the Trust can be structured without capital gains taxes.
     
Form 1040 income tax benefits NO. You have done nothing. You still “own” the assets. All Income and Expenses flow-through to the Grantor’s form 1040. YES. All expenses of trust administration are deductible including auto expenses; home office expenses; medical and life insurance, etc.
Comments: The Revocable Trust is designed to eliminate probate. DOES NOT eliminate estate taxes; ABSOLUTELY NO asset protection.The Revocable Trust is nothing more than an extension of your will. For asset protection purposes the trust is irrevocable. Under certain conditions, the trust can be designed to be a pass-through trust for income taxes.

For further information:

www.forbes.com

www.motleyfool.com

www.estateplanning.com


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About TrustlockUSA

The TrustLockUSA Estate Planning system helps you to create all of your essential estate planning documents. Our Cloud-based system securely gives you and the loved ones you assign, access to all your important legal documents anytime, anywhere in the world using your computer or smart phone.

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