Estate Planning – The Benefits of Peace of Mind

For over 27 years, I have been practising primarily in the field of estate planning. Yet a question asked by a young couple last week seemed to echo in my mind like never before before. “What is the number one benefit of doing a trust?” When the old crusty cowboy told Billy Crystal, the city slicker, that he must find “City Slickers” that is important to him in life and use that as a reason to have a happy and prosperous life, my mind immediately went to the 1980’s movie “just one thing” This line made me realise that for every person, the “just one thing” in estate planning, like the movie, is different. “The true response is the it depends” quintessential cliché. Some of the most relevant considerations that people can consider will be mentioned for the purpose of this article. In the end, whatever your “just one thing” is it can inspire you to take action and give your loved ones “Peace of Mind” Visit us for great deals in Johnson Law Firm, PC – Woodbridge Car Accident Attorney
Avoiding Probate – This tends to be the most commonly cited applicable factor, although I dispute that it is the most significant reason to schedule. Probate is not the expensive, burdensome process in Arizona that it is in some states like California or New York. Yeah, it costs some money, but it costs just a few thousand dollars in most instances. The magnitude of probate is primarily based on the make-up of the estate. The more “complicated assets” you have (i.e. oil leases, close-kept family companies, partnerships, fractional real estate holdings, etc.) and the more states you own real estate in, the more easily you push up the “Probate Meter” You will have to have a probate proceeding in each state if you own real property in more than one state, which means you will also need an attorney in each state. But if your assets (a home, a car, some CDs) are “simple” and mainly located in Arizona, then the “Probate Meter” is very small.
Saving Taxes – In newspaper advertisements, people have frequently heard this term inviting individuals to public seminars put on by a “national expert” that no one has ever really heard of. But how does the Trust actually help with tax savings? A common Revocable Trust does not save taxes for most individuals under today’s tax laws. First, there are no income taxes saved by a trust. For income tax purposes, the Trust is overlooked and all of the revenue created by the Trust is charged as normal to the individual Trust Grantors. A Trust also doesn’t save any estate taxes for a single person. But a Trust will save estate taxes for a married couple. Many married couples have a Revocable Trust, divided at the death of the first partner into a “A and a “B” trust. The main explanation for this division is that it means that in order to appeal against the estate tax, the couple can get two exemptions. When the first spouse dies, one exception for the ‘B’ trust, and then a second exception against the ‘A’ trust when the surviving spouse passes. Without an A/B trust, it is likely that the first spouse’s exemption will be wasted. However since the federal estate tax limit is now set at $5 million, most couples do require only one exemption. So in the end, having a trust would not save any estate taxes for potentially 95 percent of married couples. Now, this is true as to the Revocable living trust. Don’t confuse this with the other 4 or 5 “specialty trusts” that have the particular aim of saving property taxes. An Irrevocable Life Insurance Trust (designed to keep life insurance out of the property tax system) and an Eligible Personal Residence Trust (designed to keep primary and holiday residences out of the property tax system) will be examples of a’ specialisation trust.’