Living Trust - Can it save taxes and fees on your estate?
A Living Trust can save an estate from paying taxes and fees. So the short answer is Yes!
The long answer is that you need to prepare in advance.
Living Trust - How Does It Benefit To Have One?
No one likes losing money and assets to taxes when you die. You pay taxes every year on your income and then when you die your estate is taxed and more of you hard earned money goes the government. Which means less money goes to your family and heirs.
Living trusts, can be a very valuable tool in planning your estate. When you pass away: When you pass away you are deemed to have disposed of all your assets. This means that your estate must pay income taxes and capital gains taxes on all your assets as if you cashed in everything at once the day before you died. There are spousal rollovers provisions which is another point of discussion.
Having A Proper Strategy
A living Trust can be set up to defer the capital gains and other taxes when you pass away. For example, if you had a rental property set up in a trust and you passed away, then because the property is a living Trust it does not become part of your estate and therefore is not subject to any income taxes, probate fees or any other estate fees. The property would remain in the trust for the beneficiaries of the trust. This can help you defer future growth of the property to the beneficiaries of the trust and avoid all taxes and fees in your estate. It can be a great succession planning tool if used properly.
Using a living Trust to own properties and other assets, gives you control over the assets in the Trust, and it also gives you control on who will receive the assets or income from the trust. For example, you set up a Trust with your spouse and children as the beneficiaries of the trust. The beneficiaries have no say or ownership on the assets in the trust, which makes this a great tool for protecting asset from marriage breakdown if your children should get divorced in the future. Even though your children are the beneficiary they do not own the asset. You control the assets in the trust, including who will receive money and when, even after you pass away. Imagine controlling your assets from the grave.
Know The Ins & Outs Of The Benefits
One of the downsides of a Trust is if you transfer an asset to a Trust now you must pay the capital gains taxes on any transfer to the trust as you are disposing of an asset. However, after age 65 you can roll over assets to the trust without paying the gains now, but the deferral of taxes would have to be paid when you pass away.
It Starts With A Plan
We get far to many calls from people looking for help in reducing estate taxes and government fees after a loved one has passed. By then it’s too late. However, it’s never to late to start your own plan today!
We can help set you up with a plan that ensures the estate you leave behind to loved ones minimizes taxes and pitfalls and maximizes the amount you’ll save. We do this for free. All you need to do is book a meeting with our team. We learn about you and set you up with a plan that makes sense for you – no obligations. After, you’ll feel relieved at how easy it is and that you’ll rest easy you know your options.
Other Estate Planning Questions Answered
Questions. Questions. Questions.
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