There are only two sure things in this world – death and taxes. When it comes to the former, most states have a process called probate, which is used to wind up a decedent’s (The person who passed away) assets. When a decedent owns a home or multiple properties, had minor children, maintains assets and finances overseas or seeks to disinherit a family member, a trust can be a great planning tool. There are many, many different types of trusts, including a Revocable Living Trust (The most common), Irrevocable Trusts, Qualified Terminable Interest Property (QTIP - common for second marriages), Qualified Domestic Trusts (QDOT – when only one spouse is a U.S. citizen), Qualified Personal Residence Trust (QPRT – when a person wants to gift their home but retain a life estate) and many more.
For most individuals and/or spouses with a net worth of $5.34 million or $10.68 million combined will be adequately protected under a Revocable Living Trust. While the Revocable Living Trust does not provide tax protection (as an Irrevocable Living Trust may), it does provide important estate safeguards:
· Probate: As long as you place the home into the trust prior to death, then the home will not have to go through a comprehensive probate – which can save tens of thousands of dollars. Moreover, if you have various properties in different states, it can significantly reduce travel-time and provide more structure to your estate distribution.
· Guardianship: If you have minor children, it allows you to designate guardians so that in the case of an unforeseen death of both spouses, the children will be taken care of.
· Distributions in Stages: If you have minor children, it is important that your passing on does not result in a financial windfall that they can access at age 18 (age of majority). Most teenagers do not have the foresight to save and prepare for the future – and that money you worked so hard for will be wasted in no time at all.
· Peace of Mind: By having a notarized and funded trust in place, you will be providing your loved one’s with a much simpler method for winding up your estate (estate administration)
If you are interested in learning more about trusts, please feel free to contact our office today!
SEAN M. GOLDING, ESQ, EA
Sean M. Golding is one of only a few attorneys licensed in both New York & California and has accumulated 15 years of legal experience. He is also an Enrolled Agent, the highest credential awarded by the IRS. He represents clients worldwide in matters involving Civil & Criminal Tax, Probate, Estate Planning, and International Law. Sean’s clients include U.S. and foreign citizens living throughout the states, as well as abroad. Past and current clients reside in Iraq, Japan, Afghanistan, Indonesia, South Africa, Morocco, India, Pakistan, Taiwan, Nicaragua, Switzerland, Canada, Mexico, Philippines, Hong Kong, and Korea. Sean is currently enrolled in one of the nation’s Top Master of Tax Law Programs at the University of Denver in a distance program designed for experienced professionals. He worked his way through school, graduating University of Denver and Whittier Law School and earning Dean’s List distinction at both institution. He is a Partner in the law firm of Golding & Golding. (http://www.goldinglawyers.com/