Retirement & Financial Planning Report

Don’t create a revocable living trust for tax benefits, because such trusts don’t save estate or income tax. So why would you consider this type of trust?

[] Probate avoidance. Assets held in trust aren’t subject to the time and expense of probate, which may be substantial. At your death, a successor trustee takes over the trust assets without court oversight. Moreover, if you place any property you own in another state into the trust, that property will avoid “ancillary” probate, which generally affects out-of-state holdings.

[] Incompetency protection. If you lose the ability to manage your own finances, a successor trustee will step in. That trustee will have a fiduciary responsibility to manage trust assets for your well-being.

If you do create a revocable living trust, it’s critical to re-title assets so they’re held by the trust. Otherwise, you and your heirs won’t get the advantages such a trust can offer.