Living trusts are appealing to those who want to avoid probate (the legal process of paying the deceased’s debts and distributing the estate to heirs). A living trust is simply a trust you create while you’re alive, as opposed to a trust that is created upon your death according to the terms of your will. A trust can also have benefits like helping save on estate taxes or setting up long-term property management, depending on how the trust is set up. Creating a basic living trust will not affect income or estate taxes. However, living trusts can be set up in a way to reduce your federal estate tax bill. The cost of setting up a living trust varies greatly. Living trusts can be relatively simple or extremely complex. This allows for a range of costs of creating a living trust. However, these costs must be compared to the time and costs of probate court. Upon your death, the successor trustee transfers ownership to the named beneficiaries. It is a relatively fast process, that takes about a month in many cases. Once the property has been transferred, the living trust ceases to exist. A living trust’s terms do not have to be made public, unlike a will. Generally, it is worth looking into creating a living trust if you are older and expect to pay a good deal of estate tax, or if you want to avoid probate court. If you are young, there really is no need to create a living will because the likelihood of premature death is quite small. It isn’t worth the cost of creating a living trust. However, you will want to have a will, and probably some life insurance.
As the end of the year is fast approaching, we should consider any last-minute strategies that might help reduce your 2019 tax bill. Last year