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SEXTON BAILEY ATTORNEYS, PA an Arkansas Estate Planning & Trust Information Center

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Home / General / 4 Common Revocable Living Trust Urban Legends (Part 2 of 2)

4 Common Revocable Living Trust Urban Legends (Part 2 of 2)

February 10, 2012 by Deb Sexton Leave a Comment

Have you been fooled by these revocable living trust urban legends?  Below, we set the record straight.  Be sure to review part one of this article for facts dispelling the urban legend that all revocable living trusts avoid probate and protect assets from the nursing home.  If you hear of any other living trust “facts” that you suspect might be an urban legend, consult with a qualified estate planning attorney.

URBAN LEGEND 3.  Revocable Living Trusts are Just for the Wealthy

TRUTH 1.  Most people and their families would benefit from having a living trust.  Your asset base (i.e. wealth or lack of it) is considered, but is not a deciding factor.  Living trusts are easy to use and not complicated.

Living trusts are used by people of all income levels and asset bases to stay in control, avoid court interference, plan for incapacity, avoid probate, provide for all beneficiaries and incorporate federal estate tax planning.

Trusts keep your personal life and finances private and organized.  They make life much easier on your family if you become incapacitated and when you die.

URBAN LEGEND 3.  Revocable Living Trusts Save Taxes

TRUTH 4.  Not all revocable living trusts save taxes.  If you have a federally taxable estate when you die and you’re married, your estate planning attorney will likely recommend that you include tax planning within your revocable living trust.  This is AB tax planning, though your attorney may call it by another name.

The AB tax planning keeps all of your assets from going directly to your spouse upon your death.  Instead, the assets go into a trust for the benefit of your spouse (and children) and your unified credit/federal tax exemption is used for any assets titled in the name of your trust or of which you named the trust as beneficiary.

Please refer to part one of this article, 4 Common Revocable Living Trust Urban Legends, to learn about two more revocable living trust urban legends.

 

 

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Deb Sexton
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