Revocable and Irrevocable Living Trusts
Estate planners often advise individuals to put property into living trusts. Though these trusts have been available for years, they are enjoying renewed popularity because they can save probate costs.
Trusts established during a person's life are called living trusts. They can be revocable or irrevocable. The revocable trust can be amended or discontinued at any time. An irrevocable trust cannot be modified or discontinued.
Individuals who use the revocable living trust transfer title of their property into the trust. They, as grantor, appoint themselves as the trustee (manager of the trust) and the beneficiary (receiver of the income).
To set up a living trust, you transfer the title of your assets into the trust from you, as an individual, to yourself as trustee of the trust. No income taxes are due on this transfer.
Setting up a revocable living trust does not constitute a gift, so there are no gift tax consequences in setting it up. Once established, everything transferred to the trust then belongs to the trust, but as trustee, you maintain control. You can buy and sell trust assets, and even give them away. If you may have questions about trusts you can visit www.annuitynews.net or email me at dustin@capitalcareamerica.com
Dustin J Weaver ACS PCS AAPA