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Home >> Myths About Living Trusts

Myths About Living Trusts

January 22, 2014 by Robert Kulas. Leave a Comment

Creating an estate plan that includes a revocable living trust is something that almost everyone can benefit from. Whether you want to avoid probate, ensure that your estate is kept private, or protect against the possibility of incapacity, a revocable living trust will allow you to do this. However, revocable living trusts are not suitable for all estate planning purposes. In fact, some of the widely believed myths about this estate planning tool are very inaccurate. Let us take a little time to dispel some of these commonly held and circulated myths.

Myth 1. Your revocable living trust lets you avoid estate taxes.

While this myth is completely untrue, it’s also, fortunately, not as potentially harmful as you might think. Since 2013, the estate tax exemption has been set at $5.25 million per individual, and that amount will increase slightly in 2014. What this means is that unless you have an estate worth over the exemption limit, you don’t have to worry about estate taxes at all.

If you do own assets in excess of the $5.25 million limit, however, you will want to consider potential estate tax mitigation strategies. Though these strategies include a number of different tools you might be able to use, a revocable living trust does not offer any estate tax mitigation benefits. Regardless of the type of property you own and regardless of the type of property you transfer to your living trust, a revocable living trust does nothing to reduce your estate tax bill.

Myth 2. I can simply create a revocable living trust and forget about it.

Revocable living trusts are not magic. Once you create the trust, you aren’t granted some super powerful legal protection that automatically springs into place, protecting you from the ills of probate. While revocable living trusts can give you some significant protections, you will have to work for them.

When you create your living trust document, your next step must be the funding of the trust. Funding is the process of taking some of your individually owned property and transferring it into the trust’s name. Though the trust will become the legal owner, you will still be able to use and benefit from the property it owns. You’ll also be able to transfer the property outside of probate after you die.

Yet the funding process must be done properly in order for you to obtain the benefits your trust affords. If you fail to fund all of your property, or make mistakes in the funding process, the left out property won’t be able to avoid probate.

Filed Under: living trusts Tagged With: living trusts

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Everyone treated us extremely well.  Robert explained how a trust works and the benefits of having one.  We decided to move forward and complete the process.  He was very kind and knowledgeable.  Julie was also very helpful and very patient with our questions.  We felt very comfortable with this firm handling our affairs.  We would highly recommend this firm to our friends and family.

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"Everyone treated us extremely well.  Robert explained how a trust works and the benefits of having one.  We decided to move forward and complete the process.  He was very kind and knowledgeable.  Julie was also very helpful and very patient with our questions.  We felt very comfortable with this firm handling our affairs.  We would highly recommend this firm to our friends and family."

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Janice M
Client Review
August 25, 2020
    

Robert Kulas and staff made making a will an easy to understand process. They were very knowledgeable and attentive to my wishes. All my documents were provided in an organized binder which will be a great asset to my family. I would definitely recommend them.

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Krissy L.
Client Review
August 25, 2020
    

I have worked with Mr. Kulas & staff before. And they are very professional. I am very satisfied with Mr. Kulas and his staff and give them the highest satisfaction and 5 star rating.

default image
Leo C.
Client Review
August 25, 2020
    

Mr. Kulas and his staff have been extremely helpful & knowledgeable for the over 3 years we have been associated. They are easy to talk to and explain everything without feeling rushed. Very competent and professional.

default image
Mildred W.
Client Review
August 25, 2020
    

I have known Robert Kulas for 20 years since I was co-executor for friends who had Mr. Kulas prepare a Trust for them. When I felt I needed a trust also, I came to him. I have always been completed satisfied with his work and that of his charming, competent staff.

default image
Joan C.
Client Review
August 25, 2020
    

We began our estate plan process in 2004 (12 years ago) and have been pleased with the periodic reviews we have gone through and when changes have been needed the firm has been thorough and professional in making those changes.

default image
L.G.K.
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