Some Facts About Living Trust that Might Surprise You
Are you planning to establish a living trust? Wondering about its benefits for your heirs? Well, here below are some that might surprise you – and will help you decide to finally establish your own trust.
Helps avoid probate. Living trusts are an estate planning tool that can effectively avoid the costs (and the hassle) of probate. It is also an effective way in preserving privacy while ensuring that your assets go to your intended beneficiaries after you die.
Helps boost FDIC protection. FDIC (Federal Deposit Insurance Corporation) protection is boosted with the establishment of a living trust. Usually, a person receives FDIC protection against losses on bank accounts an amount of up to USD 250,000 per account. The FDIC says that every beneficiary in your living trust adds an additional USD 250,000 in protection. When you have 3 beneficiaries, the total protection is USD 750,000. It is important to note, however, that there is a limit in this added protection when the beneficiary is more than 5. So, contact the FDIC or your living trust attorney Leucadia, CA, in case you have more questions or clarifications.
The trust cannot always be private. While it is true that privacy is one of the benefits of a living trust, there are cases that the details can be accessed in public and that is when the beneficiary contests the estate and take the trustee to court. In the process, when the trust document becomes part of the court record, it is highly likely it becomes public.
A living trust does not modify state tax obligation. Of course, not all state impose an estate or inheritance tax, and commonly, any taxes are levied by the state where the deceased person lived at the time of death. But here’s the truth: Titling assets in a living trust does not reduce or eliminate state inheritance or estate taxes. For instance, if a particular state imposes tax, tangible properties such as home or other physical assets will be subject to taxes in that state they are located – no matter where the decedent lived. And that is true even if the property is included in a living trust.
Learn more about how you can use a living trust for optimum benefits. Contact us here at the Law Offices of Ronald R. Webb at (858) 558-1191.
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