How To Dispense Funds From A Living Trust ?  

Establishing a living trust is one way of safeguarding the wealth a person has earned and passing it to his or her heirs. The grantor - or person creating the trust - transfers the legal title of their property during their lifetime to a person or persons of their choice.

A living trust is a legal method by which probate and its attendant costs and delays are avoided. Living trusts need not be made public, unlike a will, and hence, the privacy of the grantor is maintained.

A living trust is useful should the grantor become incapacitated, in which case the appointed trustee continues to administer the estate. The grantor or grantors can themselves be trustees during their lifetime. In such a case they might appoint a secondary trustee in event of emergencies. The trust will comprise only the assets they own which they wish to transfer to the trust. These could be bank accounts, stocks and bonds, personal property, real estate or life insurance.

There are several implications to a living trust, so a professional opinion is advisable to know whether it is the most suitable model in an individual’s particular circumstances. Furthermore a trust requires fairly exhaustive record keeping; duties that come with the trust.

A living trust has advantages of privacy, cost saving in avoiding probate, and an early distribution of assets.

However, a living trust is not exempt from payment of estate tax if due.

At time of death of the guarantor and closure of the trust, the trustee must first discharge all liabilities pending. These can be outstanding mortgage payments, other outstanding payments for items purchased, funeral and administrative expenses or attorney’s fees. The balance will constitute the value of the estate. The trustee must also pay any personal pending taxes due form the trust.

The trustee must then establish whether the trust is liable to estate tax and remit that, if due, filing appropriate returns. Any unpaid taxes devolve on the trustee in his or her personal capacity.

The remaining assets can then be distributed according to the terms contained in the trust.

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How To Dispense Funds From A Living Trust
 

Taxation-Of-Revocable-Living-Trust-At-Death      Revocable living trusts have become a popular alternative to the traditional way to pass property on when you die. It legally evades a probate system which is expensive and protracted. Many citizens are attracted by the possibility of quicker and easier asset transfers. More..

 


 

 

 
   
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