TRUST ACCOUNT
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KNOWLEDGEFINANCIALGROUP.COM
Trust account - a savings account deposited by someone who makes themselves the trustee for a beneficiary and who controls it during their lifetime; afterward the balance is
payable to the previously named beneficiary
------------------------------------------------
Trust Account
A trust is a legal entity that holds assets for a beneficiary - such as a child or a family member - designated to eventually receive the assets.
When a trust is established, an individual or corporate entity is designated to oversee or manage the assets in the trust. This individual or entity is called a trustee. A trustee can be a
professional with financial knowledge, a relative, a loyal friend, a corporation or another person.
The Revocable Living Trust (or Family Trust)
A Revocable Living Trust (also known as a Family Trust or Living Trust) is used primarily to avoid probate, reduce estate taxes, preserve your privacy, and manage your
financial affairs.
A Revocable Living Trust is a trust established while you are living. It is revocable, so you are able to make changes whenever you want, as well as reclaim the property transferred into it. It
describe how your property should be managed while you are alive, and how it should be distributed upon your death. It is often called a family trust.
Avoiding Probate and Protecting Privacy with a Trust
Normally, if a person without a trust dies, there must be a probate process to determine how to distribute all of the property held solely in the decedent's name. A Will can help the probate
court to determine where the property should go, but does not avoid the probate process. In fact, one primary purpose of probate is to validate the "last will" if one exists. Probate is a public
procedure and opens up an estate's distribution to the public eye.
When you have correctly set up and used a Revocable Living Trust, upon your death there will be no probate process. This is because the owner of the property (the Trust) did not die; just
the person in the role of the grantor and trustee (you). The new successor trustee will be able to take over without the long probate process.
IRREVOCABLE TRUST
A trust that can't be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the trust, effectively removes all of his or her rights of
ownership to the assets and the trust.
This is the opposite of a "revocable trust", which allows the grantor to modify the trust.
The main reason for setting up an irrevocable trust is for estate and tax considerations. The benefit of this type of trust for estate assets is that it removes all incidents of ownership,
effectively removing the trust's assets from the grantor's taxable estate. The grantor is also relieved of the tax liability on the income generated by the assets. While the tax rules will vary
between jurisdictions, in most cases, the grantor can't receive these benefits if he or she is the trustee of the trust.
The assets held in the trust can include, but are not limited to, a business, investment assets, cash and life insurance policies.
payable to the previously named beneficiary
------------------------------------------------
Trust Account
A trust is a legal entity that holds assets for a beneficiary - such as a child or a family member - designated to eventually receive the assets.
When a trust is established, an individual or corporate entity is designated to oversee or manage the assets in the trust. This individual or entity is called a trustee. A trustee can be a
professional with financial knowledge, a relative, a loyal friend, a corporation or another person.
The Revocable Living Trust (or Family Trust)
A Revocable Living Trust (also known as a Family Trust or Living Trust) is used primarily to avoid probate, reduce estate taxes, preserve your privacy, and manage your
financial affairs.
A Revocable Living Trust is a trust established while you are living. It is revocable, so you are able to make changes whenever you want, as well as reclaim the property transferred into it. It
describe how your property should be managed while you are alive, and how it should be distributed upon your death. It is often called a family trust.
Avoiding Probate and Protecting Privacy with a Trust
Normally, if a person without a trust dies, there must be a probate process to determine how to distribute all of the property held solely in the decedent's name. A Will can help the probate
court to determine where the property should go, but does not avoid the probate process. In fact, one primary purpose of probate is to validate the "last will" if one exists. Probate is a public
procedure and opens up an estate's distribution to the public eye.
When you have correctly set up and used a Revocable Living Trust, upon your death there will be no probate process. This is because the owner of the property (the Trust) did not die; just
the person in the role of the grantor and trustee (you). The new successor trustee will be able to take over without the long probate process.
IRREVOCABLE TRUST
A trust that can't be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the trust, effectively removes all of his or her rights of
ownership to the assets and the trust.
This is the opposite of a "revocable trust", which allows the grantor to modify the trust.
The main reason for setting up an irrevocable trust is for estate and tax considerations. The benefit of this type of trust for estate assets is that it removes all incidents of ownership,
effectively removing the trust's assets from the grantor's taxable estate. The grantor is also relieved of the tax liability on the income generated by the assets. While the tax rules will vary
between jurisdictions, in most cases, the grantor can't receive these benefits if he or she is the trustee of the trust.
The assets held in the trust can include, but are not limited to, a business, investment assets, cash and life insurance policies.
| ''Trust Account: Definition of a Trust; Land Trust, Living Trust, Revocable Trust, It is one of the oldest and best defined relationships known in the law. In general, a "trust" is a legal entity that is able to own property and other assets.'' |
''LAND TRUST''
A land trust is an agreement whereby one party (the trustee) agrees to hold ownership
of a piece of real property for the benefit of another party (the beneficiary). Land trusts
are used by nonprofit organizations to hold conservation easements, by corporations
and investment groups to compile large tracts of land, and by individuals to keep their
real estate ownership private, avoid probate and provide several other benefits.
A community or conservation land trust is an organization established to hold land and
to administer use of the land according to the charter of the organization. A land trust
is a useful way to manage complex divisions of the Bundle of Rights that people can
own in real estate, and can be used to manage something as large and complex as a
multi-state REIT, or as common and small as a single-family home.
Corporations sometimes set up land trusts when they want to compile large tracts of
land without arousing suspicion or alerting people to their plans (which would cause
the asking price to rise). For example, the land for Walt Disney World near Orlando
Florida was put together by using many land trusts to buy smaller tracts of land.
Individuals use land trusts mainly for privacy and to avoid probate. No one knows what
one's bank balance or stock investments are, yet anyone with an internet connection
can look up a person's real estate holdings. A person who has an auto accident or a
doctor who accidentally injures a patient is a much better target for a lawsuit if he or
she owns real estate investments. So some investors buy their properties in land
trusts so their name does not appear in the public records.
The land trust also allows the property to immediately pass to their heirs at the
moment of death, rather than go through a long probate process.
Some of the other advantages of land trusts for individuals are:
1-Sales price of the property can be kept off the public records
2-Property taxes are lower if the purchase price is kept private
3-Judgments or liens (such as IRS liens) against an individual's name are not a lien
against their land trust property
Partners can more easily continue a project if one dies or is divorced
4-Interests can be transferred quickly without recording a deed
5-Managing a rental property is easier when the trustee can be blamed
Negotiating a purchase or sale can be easier when the trustee can be blamed
6-Liability on financing can be limited to the assets of the trust
7-Investment trust companies hold property for investment purposes and non-citizens
who want long-term access to land in Mexico often enter real-estate trust agreements,
called fideicomiso, with Mexican citizens, but land trust more often refers to a
community scale organization.
8-Community land trusts are established to provide low- and moderate-income families
access to affordable housing while conservation trusts protect environmentally,
historically or culturally valuable places.
9- Land trusts are also in place to protect farmland and ranchland. Despite the use of
the term "trust," many if not most land trusts are not technically trusts, but rather
non-profit organizations that hold simple title to land and/or other property and manage
it in a manner consistent with their non-profit mission.
A land trust is an agreement whereby one party (the trustee) agrees to hold ownership
of a piece of real property for the benefit of another party (the beneficiary). Land trusts
are used by nonprofit organizations to hold conservation easements, by corporations
and investment groups to compile large tracts of land, and by individuals to keep their
real estate ownership private, avoid probate and provide several other benefits.
A community or conservation land trust is an organization established to hold land and
to administer use of the land according to the charter of the organization. A land trust
is a useful way to manage complex divisions of the Bundle of Rights that people can
own in real estate, and can be used to manage something as large and complex as a
multi-state REIT, or as common and small as a single-family home.
Corporations sometimes set up land trusts when they want to compile large tracts of
land without arousing suspicion or alerting people to their plans (which would cause
the asking price to rise). For example, the land for Walt Disney World near Orlando
Florida was put together by using many land trusts to buy smaller tracts of land.
Individuals use land trusts mainly for privacy and to avoid probate. No one knows what
one's bank balance or stock investments are, yet anyone with an internet connection
can look up a person's real estate holdings. A person who has an auto accident or a
doctor who accidentally injures a patient is a much better target for a lawsuit if he or
she owns real estate investments. So some investors buy their properties in land
trusts so their name does not appear in the public records.
The land trust also allows the property to immediately pass to their heirs at the
moment of death, rather than go through a long probate process.
Some of the other advantages of land trusts for individuals are:
1-Sales price of the property can be kept off the public records
2-Property taxes are lower if the purchase price is kept private
3-Judgments or liens (such as IRS liens) against an individual's name are not a lien
against their land trust property
Partners can more easily continue a project if one dies or is divorced
4-Interests can be transferred quickly without recording a deed
5-Managing a rental property is easier when the trustee can be blamed
Negotiating a purchase or sale can be easier when the trustee can be blamed
6-Liability on financing can be limited to the assets of the trust
7-Investment trust companies hold property for investment purposes and non-citizens
who want long-term access to land in Mexico often enter real-estate trust agreements,
called fideicomiso, with Mexican citizens, but land trust more often refers to a
community scale organization.
8-Community land trusts are established to provide low- and moderate-income families
access to affordable housing while conservation trusts protect environmentally,
historically or culturally valuable places.
9- Land trusts are also in place to protect farmland and ranchland. Despite the use of
the term "trust," many if not most land trusts are not technically trusts, but rather
non-profit organizations that hold simple title to land and/or other property and manage
it in a manner consistent with their non-profit mission.
LAND CONTRACT Difference Between a
Land Contract and a Mortgage
Land contracts are security agreements between a seller, known as a Vendor,
and a buyer, known as a Vendee. The Vendor carries the financing for the
Vendee, which may or may not contain an underlying loan. The basic difference
between a land contract and a mortgage is the buyer does not receive a DEED or
clear title to the property until the land contract is paid off.
Land contract /contract for deed or "installment sale agreement") is a contract
between the owner of the real property (called the "vendor" or the "seller") and a
person who wants to buy the property (the "vendee", "contract purchaser",
"purchaser" or "buyer")for an agreed-upon purchase price. Under a land contract
the vendor grants equitable title to the vendee (which consists of virtually all
rights to the property other than actual legal title), and the vendee agrees to pay
the purchase price to the vendor over time, usually in monthly installments, by a
certain date.
When the full amount of the purchase price is paid, the vendor is obligated to
deliver legal title to the vendee by an actual deed, and upon delivery of the deed,
the vendee owns equitable and legal title to the property.
Equitable title, for all intents and purposes, makes the purchaser the "owner" of
the property. There are several "land contract friendly" states in the US, while
other states make it extremely difficult to sell or purchase real property by means
of a land contract.
It is common for the installment payments of the purchase price to be similar to
mortgage payments in amount and effect. The amount is often determined
according to a mortgage amortization schedule.
In effect, each installment payment is partially payment of the purchase price and
partially payment of interest on the unpaid purchase price. This is similar to
mortgage payments which are part repayment of the principal amount of the
mortgage loan and part interest.
However, since land contracts can easily be written or modified by any seller or
purchaser, you may come across any variety of repayment plans. Interest only,
negative amortizations, short balloons, extremely long amortizations just to name
a few.
It is therefore even more so advisable to read your contracts and consult
professionals. Typical land contracts are easy to understand and usually only
make up 3-5 pages. It is not uncommon for land contracts to go UNrecorded. For
several reasons the vendor or vendee may decide that the contract is not to be
recorded in the register of deeds.
This does not make the contract invalid, but it does increase exposure to
undesirable side effects. Contrary to common belief, a contract is valid with only a
vendors' signature, provided it is delivered and accepted by the vendee. Contracts
without the vendee's signature, or without being notarized - although not
recommended- are therefore still valid and enforceable in court.
Although land contracts can be used for a variety of reasons, their most common
use is as a form of short-term seller financing. Usually, but not always, the date
on which the full amount of the purchase price is due will be years sooner than
when the purchase price would be paid in full according to the amortization
schedule. This results in the final payment being a large "balloon" payment. Since
the amount of the final payment is so large, the buyer usually obtains a
conventional mortgage loan from a bank to make the final payment.
Land contracts are sometimes used by buyers who do not qualify for
conventional mortgage loans offered by traditional lending institutional, for
reasons of poor credit or an insufficient down payment. Land contracts are also
used when the seller is anxious to sell and the buyer is not given enough time to
arrange for conventional financing.
Besides the obvious reasons, land contracts are a favorite amongst many real
estate investors because of their ease of use, extreme flexibility, and fast
executions
Land Contract and a Mortgage
Land contracts are security agreements between a seller, known as a Vendor,
and a buyer, known as a Vendee. The Vendor carries the financing for the
Vendee, which may or may not contain an underlying loan. The basic difference
between a land contract and a mortgage is the buyer does not receive a DEED or
clear title to the property until the land contract is paid off.
Land contract /contract for deed or "installment sale agreement") is a contract
between the owner of the real property (called the "vendor" or the "seller") and a
person who wants to buy the property (the "vendee", "contract purchaser",
"purchaser" or "buyer")for an agreed-upon purchase price. Under a land contract
the vendor grants equitable title to the vendee (which consists of virtually all
rights to the property other than actual legal title), and the vendee agrees to pay
the purchase price to the vendor over time, usually in monthly installments, by a
certain date.
When the full amount of the purchase price is paid, the vendor is obligated to
deliver legal title to the vendee by an actual deed, and upon delivery of the deed,
the vendee owns equitable and legal title to the property.
Equitable title, for all intents and purposes, makes the purchaser the "owner" of
the property. There are several "land contract friendly" states in the US, while
other states make it extremely difficult to sell or purchase real property by means
of a land contract.
It is common for the installment payments of the purchase price to be similar to
mortgage payments in amount and effect. The amount is often determined
according to a mortgage amortization schedule.
In effect, each installment payment is partially payment of the purchase price and
partially payment of interest on the unpaid purchase price. This is similar to
mortgage payments which are part repayment of the principal amount of the
mortgage loan and part interest.
However, since land contracts can easily be written or modified by any seller or
purchaser, you may come across any variety of repayment plans. Interest only,
negative amortizations, short balloons, extremely long amortizations just to name
a few.
It is therefore even more so advisable to read your contracts and consult
professionals. Typical land contracts are easy to understand and usually only
make up 3-5 pages. It is not uncommon for land contracts to go UNrecorded. For
several reasons the vendor or vendee may decide that the contract is not to be
recorded in the register of deeds.
This does not make the contract invalid, but it does increase exposure to
undesirable side effects. Contrary to common belief, a contract is valid with only a
vendors' signature, provided it is delivered and accepted by the vendee. Contracts
without the vendee's signature, or without being notarized - although not
recommended- are therefore still valid and enforceable in court.
Although land contracts can be used for a variety of reasons, their most common
use is as a form of short-term seller financing. Usually, but not always, the date
on which the full amount of the purchase price is due will be years sooner than
when the purchase price would be paid in full according to the amortization
schedule. This results in the final payment being a large "balloon" payment. Since
the amount of the final payment is so large, the buyer usually obtains a
conventional mortgage loan from a bank to make the final payment.
Land contracts are sometimes used by buyers who do not qualify for
conventional mortgage loans offered by traditional lending institutional, for
reasons of poor credit or an insufficient down payment. Land contracts are also
used when the seller is anxious to sell and the buyer is not given enough time to
arrange for conventional financing.
Besides the obvious reasons, land contracts are a favorite amongst many real
estate investors because of their ease of use, extreme flexibility, and fast
executions
LAND CONTRACT, Protecting the Seller
on a Home Land Contract Sale
If you have an underlying loan, given a choice between a straight contract or a
wrap-around contract, offer the wrap-around land contract. It will give you an override
on the existing interest rate of the first mortgage. Ask for legal advice about an
alienation clause.
1-Obtain a Credit Report on the Buyer. If the buyer has filed a bankruptcy, made late
payments to other creditors or, worse, no credit, those derogatory records are a red
flag.
2-Demand a Title Insurance Policy. Title searches of the public records will also show
liens or judgments filed against a buyer. The title company will likely ask for
satisfaction of those encumbrances before it will insure the land contract on a title
policy. Ask to see a copy of the preliminary title report (or commitment for title
insurance) to determine if a search reveals anything about the buyer.
3-Ask for a Hefty Down Payment. Buyers are less likely to walk away from a land
contract or stop paying on the installment sale contract if the buyer has made a big
down-payment. The more money invested upfront, the less likely a buyer will risk losing
it.
4-Carry the Financing Short-Term. You might amortize the payments for 30 years, but
ask for a balloon payment after five or ten years. This will let the buyer refinance or sell
the property to pay you early.
5-Verify the Buyer's Employment. Make sure the buyer is employed and has been
employed for at least two years, preferably longer.
6-Ask for Personal References. Check out the buyer's references, including past
landlords. Ask about payment history on previous rentals, not just the current rental
because sometimes landlords will say anything to get the tenant out of the property. Go
back to the landlord before the existing landlord and inquire.
7-Insist the Buyer Obtain a Homeowner Insurance Policy. You don't want to be
responsible for the home after the land contract has been signed and notarized. Make
sure the buyer names you as an additional insured and get a copy of the
homehomeowner's insurance policy.
8-Set Up a Disbursement Account. Many banks and financial institutions offer a service
that will collect the payments from the buyer and send them to you or deposit them into
your bank account. It prevents the buyer from knowing your home address, and the
arrangement frees you to travel.
9-Collect the Taxes From the Vendee. Ask the Vendee to pay the taxes to your
disbursement company. The company can then make the tax payments to your
property assessor and you can be assured the taxes will be paid on time.
10-Include a Late Payment Charge in the Land Contract. If you are paying an underlying
loan payment, you will want to receive your payments in a timely manner to avoid your
own late charges. Charge the buyer a reasonable fee for payments received late to
entice the buyer to pay on time.
11-Ensure Continued Maintenance and Care. Consider including an acceleration clause
in the contract, which will allow you to make the Vendee refinance the property if the
condition of the property becomes a risk to your financial investment.
12-Prevent the Vendee From Assigning the Contract. After you've done your homework
to approve this buyer, you don't want to give the buyer the right to assign the contract
to an unknown entity.
13-Talk to a Lawyer. It's worth it to spend a few hundred dollars to obtain legal advice
before entering into a land contract. Besides, a lawyer is likely to think of something I
have missed in this bullet-point list.
on a Home Land Contract Sale
If you have an underlying loan, given a choice between a straight contract or a
wrap-around contract, offer the wrap-around land contract. It will give you an override
on the existing interest rate of the first mortgage. Ask for legal advice about an
alienation clause.
1-Obtain a Credit Report on the Buyer. If the buyer has filed a bankruptcy, made late
payments to other creditors or, worse, no credit, those derogatory records are a red
flag.
2-Demand a Title Insurance Policy. Title searches of the public records will also show
liens or judgments filed against a buyer. The title company will likely ask for
satisfaction of those encumbrances before it will insure the land contract on a title
policy. Ask to see a copy of the preliminary title report (or commitment for title
insurance) to determine if a search reveals anything about the buyer.
3-Ask for a Hefty Down Payment. Buyers are less likely to walk away from a land
contract or stop paying on the installment sale contract if the buyer has made a big
down-payment. The more money invested upfront, the less likely a buyer will risk losing
it.
4-Carry the Financing Short-Term. You might amortize the payments for 30 years, but
ask for a balloon payment after five or ten years. This will let the buyer refinance or sell
the property to pay you early.
5-Verify the Buyer's Employment. Make sure the buyer is employed and has been
employed for at least two years, preferably longer.
6-Ask for Personal References. Check out the buyer's references, including past
landlords. Ask about payment history on previous rentals, not just the current rental
because sometimes landlords will say anything to get the tenant out of the property. Go
back to the landlord before the existing landlord and inquire.
7-Insist the Buyer Obtain a Homeowner Insurance Policy. You don't want to be
responsible for the home after the land contract has been signed and notarized. Make
sure the buyer names you as an additional insured and get a copy of the
homehomeowner's insurance policy.
8-Set Up a Disbursement Account. Many banks and financial institutions offer a service
that will collect the payments from the buyer and send them to you or deposit them into
your bank account. It prevents the buyer from knowing your home address, and the
arrangement frees you to travel.
9-Collect the Taxes From the Vendee. Ask the Vendee to pay the taxes to your
disbursement company. The company can then make the tax payments to your
property assessor and you can be assured the taxes will be paid on time.
10-Include a Late Payment Charge in the Land Contract. If you are paying an underlying
loan payment, you will want to receive your payments in a timely manner to avoid your
own late charges. Charge the buyer a reasonable fee for payments received late to
entice the buyer to pay on time.
11-Ensure Continued Maintenance and Care. Consider including an acceleration clause
in the contract, which will allow you to make the Vendee refinance the property if the
condition of the property becomes a risk to your financial investment.
12-Prevent the Vendee From Assigning the Contract. After you've done your homework
to approve this buyer, you don't want to give the buyer the right to assign the contract
to an unknown entity.
13-Talk to a Lawyer. It's worth it to spend a few hundred dollars to obtain legal advice
before entering into a land contract. Besides, a lawyer is likely to think of something I
have missed in this bullet-point list.
''TITLE OWNERSHIP BY TENANCY
TENANCY AT WILL.
A tenancy at will is a leasehold in which the tenant holds of the premises with the owner's
permission
but without a fixed term. To terminate a tenancy at will week to week is 7 days notice,month to
month is
15 days notice.
TENANCY AT SUFFERANCE.
This occurs when a tenant stays in possession of the property beyond the ending date of a legal
tenancy without the consent of the landlord.
TENANCY IN COMMON.
This is when 2 or people wish to share the ownership of a single property, they may choose to do
so
as tenants in common. It is the most frequently used form of co-ownership, except for husband
and
wife.
Tenants in common may purchase title at the same time or at a different time but with no right of
survivorship.
JOINT TENANCY:
This comes with the right of survivorship. Means that when one co-owner dies his or her share
goes
to the surviving co-owner not to the heirs.
TENANCY BY ENTIRETIES:
This is basically a joint tenancy between husband and wife with automatic right of survivorship
TENANCY AT WILL.
A tenancy at will is a leasehold in which the tenant holds of the premises with the owner's
permission
but without a fixed term. To terminate a tenancy at will week to week is 7 days notice,month to
month is
15 days notice.
TENANCY AT SUFFERANCE.
This occurs when a tenant stays in possession of the property beyond the ending date of a legal
tenancy without the consent of the landlord.
TENANCY IN COMMON.
This is when 2 or people wish to share the ownership of a single property, they may choose to do
so
as tenants in common. It is the most frequently used form of co-ownership, except for husband
and
wife.
Tenants in common may purchase title at the same time or at a different time but with no right of
survivorship.
JOINT TENANCY:
This comes with the right of survivorship. Means that when one co-owner dies his or her share
goes
to the surviving co-owner not to the heirs.
TENANCY BY ENTIRETIES:
This is basically a joint tenancy between husband and wife with automatic right of survivorship
GENERAL INVESTMENT STRATEGIES, METHODS, AND TECHNIQUES. A BETTER WAY
TO BUILD WEALTH! When it comes to reliable investments, real estate investing is
the best wealth-builder in the world.
INVESTING / METHOD AND TECHNIQUES TO INVEST IN TODAY'S MARKET FOR A
BETTER TOMORROW
STOCK MARKET: A WAY TO INVEST AND MULTIPLY YOUR MONEY. THE MARKET
HAS THOUSANDS OF COMPANIES TO BUY STOCKS, Mutual Funds, Bond Funds,
Annuity. The market in which shares are issued and traded either through
exchanges or over-the-counter markets.
REITs= REAL ESTATE INVESTMENT TRUST: A GREAT WAY TO INVEST IN REAL
ESTATE WITHOUT TAKING A MORTGAGE LOAN
FOREX MARKET: THE LARGEST MARKET IN THE WORLD TO INVEST AND GET RICHER
IF YOU USE THE RIGHT TOOLS
INSURANCE 101: THE IMPORTANCE OF INSURANCE IN SOMEONE'S LIFE. HOW TO
SAVE MONEY ON YOUR INSURANCE PREMIUM? LEARN ABOUT THE 5 INSURANCE
POLICIES EVERYBODY NEEDS AND THE 15 INSURANCE POLICIES YOU DON'T NEED.
REAL ESTATE INVESTMENT SECRETS REVEALED, REAL ESTATE CAN HELP YOU GET
RICHER THE QUICKEST, EASIEST
WAY POSSIBLE. HOW TO GET PRE-QUALIFY FOR A HOME LOAN? HOW DOES
OWNER FINANCING REALLY WORKS
SMALL BUSINESS, METHODS, TECHNIQUES, AND STRATEGIES. Business structures
101. LLP, LLC, S-corp and C-corp: It's not just alphabet soup! A breakdown of what
you need to know, in layman's terms.
Mortgage Loans Modification: SAVE YOUR HOME, SAVE YOUR CREDIT, REDUCE
YOUR MONTHLY PAYMENT, AVOID FORECLOSURE
HOME REFINANCE: 10 GREAT REASONS TO REFINANCE A PROPERTY. RATES ARE
STILL NEAR HISTORIC LOWS, IT MAY BE A GOOD TIME NOW TO REFINANCE! SOUTH
FLORIDA CALL: 786-709-6577 -- WE'RE LICENSED MORTGAGE BROKER
AMERICAN BANKING SYSTEM: BANKING HISTORY; GREAT THINGS TO KNOW ABOUT
THE AMERICAN BANKING HISTORY
BANKING AND FINANCE, COMMERCIAL BANKING: The fundamental functions of a
commercial bank during the past two centuries
SAVING: THE SECRETS OF SAVING; WAYS TO SAVE A LOT OF MONEY AND GETTING
RICHER. 66 WAYS TO SAVE MONEY
MONEY MANAGEMENT: Ten Resolutions to Make Your Financial Life Easier. 10
Ways to Avoid Overdraft and Bounced Check Fees
THE 16 DAYS THAT SHOOCK THE US ECONOMY IN SEPTEMBER, 2008. A shocking
series of events that forever changed the financial markets.
AMERICA’S MONEY CRISIS / Bailout 101: What new law says. Here's a rundown of
key provisions of the financial rescue plan that United State Senate voted,
Wednesday October 1; and the house voted Friday October 3, 2008.
FORTUNE, CREATION AND INTRODUCTION: When you invest in stock, you buy
ownership shares in a company. Before You Invest; Before undertaking any
investment program, it is critical that you assess your current situation and form
goals. Evaluating a Stock, Creating an Emergency Fund
Trust Account: Definition of a Trust; Land Trust, Living Trust, Revocable Trust. In
general, a "trust" is a legal entity that is able to own property and other assets.
TO BUILD WEALTH! When it comes to reliable investments, real estate investing is
the best wealth-builder in the world.
INVESTING / METHOD AND TECHNIQUES TO INVEST IN TODAY'S MARKET FOR A
BETTER TOMORROW
STOCK MARKET: A WAY TO INVEST AND MULTIPLY YOUR MONEY. THE MARKET
HAS THOUSANDS OF COMPANIES TO BUY STOCKS, Mutual Funds, Bond Funds,
Annuity. The market in which shares are issued and traded either through
exchanges or over-the-counter markets.
REITs= REAL ESTATE INVESTMENT TRUST: A GREAT WAY TO INVEST IN REAL
ESTATE WITHOUT TAKING A MORTGAGE LOAN
FOREX MARKET: THE LARGEST MARKET IN THE WORLD TO INVEST AND GET RICHER
IF YOU USE THE RIGHT TOOLS
INSURANCE 101: THE IMPORTANCE OF INSURANCE IN SOMEONE'S LIFE. HOW TO
SAVE MONEY ON YOUR INSURANCE PREMIUM? LEARN ABOUT THE 5 INSURANCE
POLICIES EVERYBODY NEEDS AND THE 15 INSURANCE POLICIES YOU DON'T NEED.
REAL ESTATE INVESTMENT SECRETS REVEALED, REAL ESTATE CAN HELP YOU GET
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WAY POSSIBLE. HOW TO GET PRE-QUALIFY FOR A HOME LOAN? HOW DOES
OWNER FINANCING REALLY WORKS
SMALL BUSINESS, METHODS, TECHNIQUES, AND STRATEGIES. Business structures
101. LLP, LLC, S-corp and C-corp: It's not just alphabet soup! A breakdown of what
you need to know, in layman's terms.
Mortgage Loans Modification: SAVE YOUR HOME, SAVE YOUR CREDIT, REDUCE
YOUR MONTHLY PAYMENT, AVOID FORECLOSURE
HOME REFINANCE: 10 GREAT REASONS TO REFINANCE A PROPERTY. RATES ARE
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AMERICAN BANKING SYSTEM: BANKING HISTORY; GREAT THINGS TO KNOW ABOUT
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BANKING AND FINANCE, COMMERCIAL BANKING: The fundamental functions of a
commercial bank during the past two centuries
SAVING: THE SECRETS OF SAVING; WAYS TO SAVE A LOT OF MONEY AND GETTING
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MONEY MANAGEMENT: Ten Resolutions to Make Your Financial Life Easier. 10
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THE 16 DAYS THAT SHOOCK THE US ECONOMY IN SEPTEMBER, 2008. A shocking
series of events that forever changed the financial markets.
AMERICA’S MONEY CRISIS / Bailout 101: What new law says. Here's a rundown of
key provisions of the financial rescue plan that United State Senate voted,
Wednesday October 1; and the house voted Friday October 3, 2008.
FORTUNE, CREATION AND INTRODUCTION: When you invest in stock, you buy
ownership shares in a company. Before You Invest; Before undertaking any
investment program, it is critical that you assess your current situation and form
goals. Evaluating a Stock, Creating an Emergency Fund
Trust Account: Definition of a Trust; Land Trust, Living Trust, Revocable Trust. In
general, a "trust" is a legal entity that is able to own property and other assets.
11 Great things to do with your money in financial crisis, in difficult economic
time
Trust Account: Definition of a Trust; Land Trust, Living Trust, Revocable Trust,
Land Contract. It is one of the oldest and best defined relationships known in
the law
How to protect yourself and a business against malicious law-suits?
Will & Living trust
What is a will and what is living trust? How does a living trust avoid probate?
{Investment} The Ultimate Retirement Guide for Everyone; Retire Rich, Retire
Early
How can I protect my assets? {Business 101 --- Corp., S - Corp., LLC, General
Partnership, Limited partnership, Trust Account, Will and Living-Trust}
time
Trust Account: Definition of a Trust; Land Trust, Living Trust, Revocable Trust,
Land Contract. It is one of the oldest and best defined relationships known in
the law
How to protect yourself and a business against malicious law-suits?
Will & Living trust
What is a will and what is living trust? How does a living trust avoid probate?
{Investment} The Ultimate Retirement Guide for Everyone; Retire Rich, Retire
Early
How can I protect my assets? {Business 101 --- Corp., S - Corp., LLC, General
Partnership, Limited partnership, Trust Account, Will and Living-Trust}
Real Estate Investment,
Home-Buying Guide, Home-Selling Guide,
Mortgage Loan Modification to Avoid
Foreclosure,
Home Refinancing Since Interest Rate has
Dropped to the bottom low, Real Estate
Financing No Matter what you from the
news you still can purchase, Begin buying
process with Mortgage Pre-Qualification.
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PROPERTY IN SOUTH FLORIDA ; LET A
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BUY ALL YOU WANT RIGHT HERE; THE
BEST QUALITY PRODUCTS FROM THE
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Home-Buying Guide, Home-Selling Guide,
Mortgage Loan Modification to Avoid
Foreclosure,
Home Refinancing Since Interest Rate has
Dropped to the bottom low, Real Estate
Financing No Matter what you from the
news you still can purchase, Begin buying
process with Mortgage Pre-Qualification.
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PROPERTY IN SOUTH FLORIDA ; LET A
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The Ultimate Retirement Guide for Everyone; Retire
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THE BEST RETIREMENT GUIDE EVER; WHAT ARE 401K,
ROTH 401K, INDIVIDUAL 401K, 403B, 457 PLAN, THRIFT
SAVINGS PLAN.
What is a SEP IRA? What is a SIMPLE IRA? --- SEE
BELOW!
Long-term care insurance?
Is a long-term care insurance policy really provides
money to help cover the costs of living if you are no
longer able to take care of yourself.?
SOCIAL SECURITY RETIREMENT GUIDE. HOW DOES
SOCIAL SECURITY WORK?
What is the importance and benefits of life insurance in
real life, and at retirement age?
Pension Plans / IRA / INDIVIDUAL RETIREMENT
ACCOUNT. What is an IRA? And what does it matter?
What is Annuity Insurance Investment, Annuity &
Pension Insurance? Are Annuities Planning today for a
secure tomorrow?
Rich, Retire Early.
THE BEST RETIREMENT GUIDE EVER; WHAT ARE 401K,
ROTH 401K, INDIVIDUAL 401K, 403B, 457 PLAN, THRIFT
SAVINGS PLAN.
What is a SEP IRA? What is a SIMPLE IRA? --- SEE
BELOW!
Long-term care insurance?
Is a long-term care insurance policy really provides
money to help cover the costs of living if you are no
longer able to take care of yourself.?
SOCIAL SECURITY RETIREMENT GUIDE. HOW DOES
SOCIAL SECURITY WORK?
What is the importance and benefits of life insurance in
real life, and at retirement age?
Pension Plans / IRA / INDIVIDUAL RETIREMENT
ACCOUNT. What is an IRA? And what does it matter?
What is Annuity Insurance Investment, Annuity &
Pension Insurance? Are Annuities Planning today for a
secure tomorrow?
What kinds of trusts are there?
There are two basic types of trusts: living trusts and testamentary trusts. A living trust or an "inter-vivos" trust is set up during the person's lifetime. A Testamentary trust is set up in a will
and established only after the person's death when the will goes into effect.
Living trusts can be either "revocable" or "irrevocable."
Revocable trusts allow you to retain control of all the assets in the trust, and you are free to revoke or change the terms of the trust at any time.
With irrevocable trusts, the assets in it are no longer yours, and typically you can't make changes without the beneficiary's consent. But the appreciated assets in the trust aren't subject to
estate taxes.
There are many more complicated types of trusts, too, that apply to specific situations. Some include:
Credit shelter trusts: With a credit-shelter trust (also called a bypass or family trust), you write a will bequeathing an amount to the trust up to but not exceeding the estate-tax
exemption. Then you pass the rest of your estate to your spouse tax-free. And there's an added bonus: Once money is placed in a bypass trust, it is forever free of estate tax, even if it
grows.
Generation-skipping trusts: A generation-skipping trust (also called a dynasty trust) allows you to transfer a substantial amount of money tax-free to beneficiaries who are at
least two generations your junior - typically your grandchildren.
Qualified personal residence trusts: A qualified personal residence trust can remove the value of your home or vacation dwelling from your estate and is particularly useful if
your home is likely to appreciate in value.
Irrevocable life insurance trusts: An irrevocable life insurance trust can remove your life insurance from your taxable estate, help pay estate costs, and provide your heirs with
cash for a variety of purposes. To remove the policy from your estate, you surrender ownership rights, which means you may no longer borrow against it or change beneficiaries. In return,
the proceeds from the policy may be used to pay any estate costs after you die and provide your beneficiaries with tax-free income.
Qualified terminable interest property trusts: If you're part of a family in which there have been divorces, remarriages, and stepchildren, you may want to direct your
assets to particular relatives through a qualified terminable interest property trust. Your surviving spouse will receive income from the trust, and the beneficiaries you specify (e.g., your
children from a first marriage) will get the principal or remainder after your spouse dies.
--------------
What's the difference between a trust and a will?
A trust does not replace a will. Most trusts deal only with specific assets, such as life insurance or a piece of property, while a will governs distribution of nearly everything else in your
estate.
There are two basic types of trusts: living trusts and testamentary trusts. A living trust or an "inter-vivos" trust is set up during the person's lifetime. A Testamentary trust is set up in a will
and established only after the person's death when the will goes into effect.
Living trusts can be either "revocable" or "irrevocable."
Revocable trusts allow you to retain control of all the assets in the trust, and you are free to revoke or change the terms of the trust at any time.
With irrevocable trusts, the assets in it are no longer yours, and typically you can't make changes without the beneficiary's consent. But the appreciated assets in the trust aren't subject to
estate taxes.
There are many more complicated types of trusts, too, that apply to specific situations. Some include:
Credit shelter trusts: With a credit-shelter trust (also called a bypass or family trust), you write a will bequeathing an amount to the trust up to but not exceeding the estate-tax
exemption. Then you pass the rest of your estate to your spouse tax-free. And there's an added bonus: Once money is placed in a bypass trust, it is forever free of estate tax, even if it
grows.
Generation-skipping trusts: A generation-skipping trust (also called a dynasty trust) allows you to transfer a substantial amount of money tax-free to beneficiaries who are at
least two generations your junior - typically your grandchildren.
Qualified personal residence trusts: A qualified personal residence trust can remove the value of your home or vacation dwelling from your estate and is particularly useful if
your home is likely to appreciate in value.
Irrevocable life insurance trusts: An irrevocable life insurance trust can remove your life insurance from your taxable estate, help pay estate costs, and provide your heirs with
cash for a variety of purposes. To remove the policy from your estate, you surrender ownership rights, which means you may no longer borrow against it or change beneficiaries. In return,
the proceeds from the policy may be used to pay any estate costs after you die and provide your beneficiaries with tax-free income.
Qualified terminable interest property trusts: If you're part of a family in which there have been divorces, remarriages, and stepchildren, you may want to direct your
assets to particular relatives through a qualified terminable interest property trust. Your surviving spouse will receive income from the trust, and the beneficiaries you specify (e.g., your
children from a first marriage) will get the principal or remainder after your spouse dies.
--------------
What's the difference between a trust and a will?
A trust does not replace a will. Most trusts deal only with specific assets, such as life insurance or a piece of property, while a will governs distribution of nearly everything else in your
estate.
How to write your own Will and Testament? The Five Most Important Wishes of
a Living Will
What is Estate Planning? How to do an Estate Planning? 10 Things Estate
Planning CAN DO FOR YOU!
a Living Will
What is Estate Planning? How to do an Estate Planning? 10 Things Estate
Planning CAN DO FOR YOU!
How to write your own Will and Testament? The Five Most Important Wishes of a
Living Will
What is Estate Planning? How to do an Estate Planning? 10 Things Estate
Planning CAN DO FOR YOU!
Living Will
What is Estate Planning? How to do an Estate Planning? 10 Things Estate
Planning CAN DO FOR YOU!
How to write your own Will and Testament? // The Five Most Important Wishes of a
Living Will
What is Estate Planning? How to do an Estate Planning? /// 10 Things Estate Planning
CAN DO FOR YOU!
Living Will
What is Estate Planning? How to do an Estate Planning? /// 10 Things Estate Planning
CAN DO FOR YOU!
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IMPORTANT INFORMATION ABOUT THE UNITED STATES
FIVE [5] BIGGEST FINANCIAL INSTITUTIONS...
Bank of America Financial Services
Wells Fargo Financial Services
PNC-National City Mortgage Financial Services
Citibank,Citifinancial, Citimortgage, Citigroup
JPMorgan-Chase Financial Services
How & where to find money to invest in real estate? &
How to make the Bank say, "Yes You're Approved"
Learn here the most effective ways to get the best loan
rates, and the best terms
IMPORTANT INFORMATION ABOUT THE UNITED STATES
FIVE [5] BIGGEST FINANCIAL INSTITUTIONS...
Bank of America Financial Services
Wells Fargo Financial Services
PNC-National City Mortgage Financial Services
Citibank,Citifinancial, Citimortgage, Citigroup
JPMorgan-Chase Financial Services
How & where to find money to invest in real estate? &
How to make the Bank say, "Yes You're Approved"
Learn here the most effective ways to get the best loan
rates, and the best terms
=// Self-Directed IRA = // // Retirement Planning // Rollover Account // Retirement Plan // Life Insurance //
IRA/Roth IRA // Estate Planning // Annuity // Trust Account // Pension Plan // Living Trust // Financial Planning
// - Personal Finance //
IRA/Roth IRA // Estate Planning // Annuity // Trust Account // Pension Plan // Living Trust // Financial Planning
// - Personal Finance //
''What Are Different Types of
Trusts?''
----
Trusts come in a variety of forms
and can be established in many
different situations.
Asset Protection Trust - A type
of Trust that is designed to
protect a person's assets from
claims of future creditors,
frequently established in foreign
countries.
charitable trust - A Trust - and there
are many different types of charitable Trusts -
established to benefit a particular charity or the
public. Typically charitable Trusts are established as
part of an estate plan to lower or avoid imposition of
Federal (and some states') estate and gift taxes.
Constructive Trust - An implied
Trust establish by operation of law. While a person
may take legal title to property, equitable
considerations require that the equitable title of such
property remain with others. Typically fraud is a
requirement for the establishment of a constructive
Trust, the person who took legal title to the property
did so as a result of a fraud brought upon the prior
legal title holder.
Express Trusts - are those specifically created by the
grantor under a Trust agreement or declaration of
Trust.
Implied Trusts - arise from particular
facts and circumstances in which courts determine
that although there was not any formal declaration of a
Trust, there was an intention on the part of the
property owner that the property be used for a
particular purpose or go to a particular person. For
example, if a neighbor asks you to take care of her car
for her when she is on vacation, and never returns,
there was an implied Trust, as she was not making you
a gift of the car.
Inter Vivos Trust - A Trust that is
created during the lifetime of the grantor. A common
type is a revocable "living" Trust in which the grantor
transfers title to property to a Trust, serves as the
initial Trustee, and has the ability to remove the
property from the Trust during his/her lifetime.
Irrevocable Trust - A Trust that cannot be altered,
changed, modified or revoked after its creation
(absent extreme extenuating circumstances). Once a
grantor transfers property to an irrevocable Trust, the
grantor can no longer take the property back from the
Trust.
Living" Trust - A Trust created during
the lifetime of a grantor which can be altered,
changed, modified or revoked. Typically the grantor is
the initial Trustee as well as the initial beneficiary of
the Trust, with his/her spouse and children as the
ultimate beneficiaries of the Trust.
Resulting Trust - A Trust that arises
from, or is created by operation of law, when the legal
title to property is transferred, but the beneficial
interest is to be enjoyed by someone other than the
person who got the legal title.
Special Needs Trust - A Trust
that is established for a person who receives
government benefits so as not to disqualify the
beneficiary from such government benefits. Ordinarily
when a person is receiving government benefits, an
inheritance or receipt of a gift could reduce or
eliminate the person's eligibility for such benefits.
By establishing a Trust which provides for luxuries or
other benefits which otherwise could not be obtained
by the beneficiary, the beneficiary can obtain the
benefits from the Trust without defeating his/her
eligibility for government benefits. Often a Special
Needs Trust includes a trigger which terminates the
Trust in the event that it could be used to make the
beneficiary ineligible for government benefits.
Spendthrift Trust A Trust that is
established for a beneficiary which does not allow the
beneficiary to sell or pledge away his or her interests
in the Trust. A spendthrift Trust is beyond the reach of
the beneficiaries creditors, until such time as the
Trust property is distributed out of the Trust and
placed in the hands of the beneficiary.
Tax By-Pass Trust - A type of
Trust that is created to allow one spouse to leave
money to the other, while limiting the amount of
Federal Estate tax bite that would be payable on the
death of the second spouse.
Testamentary Trust - A Trust that
is included under the terms and conditions
established in a Will. Such Trusts take effect after the
death of the person making the Will.
Totten Trust - A Trust that is created
during the lifetime of the grantor by depositing money
into an account at a financial institution in his or her
name as the Trustee for another. This is a type of
revocable Trust in which the gift is not completed until
the grantor's death, or an unequivocal act reflecting
the gift during the grantor's lifetime.
Many Trusts themselves
establish "sub-Trusts". For
example, a revocable "living" Trust might establish
spendthrift Trust and a tax by-pass Trusts upon the
death of the first. Trusts can be structured to handle a
variety of situations but careful drafting is essential to
make the plan work.
================
Revocable Trusts
Living trusts help you manage your assets during your
lifetime as well as after your death. The trustee can
take control if you become mentally or physically
incapacitated. You can set up a living trust as either
revocable or irrevocable.
Revocable trusts give you more
flexibility than irrevocable trusts.
You still have ultimate control over the details of the
trust and may make changes or revoke the entire
agreement.
Irrevocable Trusts
Irrevocable trusts allow you to exclude the
value of certain assets from the rest of your estate to
reduce the taxes due upon your death. You may not
terminate an irrevocable trust, and the underlying
assets are permanently transferred to the trust.
If the beneficiary consents, you may change the terms
of the trust, but you cannot regain ownership of the
trust's assets.
Irrevocable trusts are often used to transfer a
valuable life insurance policy out of the estate. Once
the trust takes ownership, you may not change the
beneficiary or take out a loan against the policy.
Testamentary Trusts
Testamentary trusts do not take effect
until after death. The trust must be created as part of a
legally valid last will and testament. These trusts are
often used to pay an inheritance to a child when he
reaches a certain age or graduates from school. The
will must designate a trustee to manage the trust's
assets during the time period between the grantor's
death and the satisfaction of the trust's conditions.
Trusts?''
----
Trusts come in a variety of forms
and can be established in many
different situations.
Asset Protection Trust - A type
of Trust that is designed to
protect a person's assets from
claims of future creditors,
frequently established in foreign
countries.
charitable trust - A Trust - and there
are many different types of charitable Trusts -
established to benefit a particular charity or the
public. Typically charitable Trusts are established as
part of an estate plan to lower or avoid imposition of
Federal (and some states') estate and gift taxes.
Constructive Trust - An implied
Trust establish by operation of law. While a person
may take legal title to property, equitable
considerations require that the equitable title of such
property remain with others. Typically fraud is a
requirement for the establishment of a constructive
Trust, the person who took legal title to the property
did so as a result of a fraud brought upon the prior
legal title holder.
Express Trusts - are those specifically created by the
grantor under a Trust agreement or declaration of
Trust.
Implied Trusts - arise from particular
facts and circumstances in which courts determine
that although there was not any formal declaration of a
Trust, there was an intention on the part of the
property owner that the property be used for a
particular purpose or go to a particular person. For
example, if a neighbor asks you to take care of her car
for her when she is on vacation, and never returns,
there was an implied Trust, as she was not making you
a gift of the car.
Inter Vivos Trust - A Trust that is
created during the lifetime of the grantor. A common
type is a revocable "living" Trust in which the grantor
transfers title to property to a Trust, serves as the
initial Trustee, and has the ability to remove the
property from the Trust during his/her lifetime.
Irrevocable Trust - A Trust that cannot be altered,
changed, modified or revoked after its creation
(absent extreme extenuating circumstances). Once a
grantor transfers property to an irrevocable Trust, the
grantor can no longer take the property back from the
Trust.
Living" Trust - A Trust created during
the lifetime of a grantor which can be altered,
changed, modified or revoked. Typically the grantor is
the initial Trustee as well as the initial beneficiary of
the Trust, with his/her spouse and children as the
ultimate beneficiaries of the Trust.
Resulting Trust - A Trust that arises
from, or is created by operation of law, when the legal
title to property is transferred, but the beneficial
interest is to be enjoyed by someone other than the
person who got the legal title.
Special Needs Trust - A Trust
that is established for a person who receives
government benefits so as not to disqualify the
beneficiary from such government benefits. Ordinarily
when a person is receiving government benefits, an
inheritance or receipt of a gift could reduce or
eliminate the person's eligibility for such benefits.
By establishing a Trust which provides for luxuries or
other benefits which otherwise could not be obtained
by the beneficiary, the beneficiary can obtain the
benefits from the Trust without defeating his/her
eligibility for government benefits. Often a Special
Needs Trust includes a trigger which terminates the
Trust in the event that it could be used to make the
beneficiary ineligible for government benefits.
Spendthrift Trust A Trust that is
established for a beneficiary which does not allow the
beneficiary to sell or pledge away his or her interests
in the Trust. A spendthrift Trust is beyond the reach of
the beneficiaries creditors, until such time as the
Trust property is distributed out of the Trust and
placed in the hands of the beneficiary.
Tax By-Pass Trust - A type of
Trust that is created to allow one spouse to leave
money to the other, while limiting the amount of
Federal Estate tax bite that would be payable on the
death of the second spouse.
Testamentary Trust - A Trust that
is included under the terms and conditions
established in a Will. Such Trusts take effect after the
death of the person making the Will.
Totten Trust - A Trust that is created
during the lifetime of the grantor by depositing money
into an account at a financial institution in his or her
name as the Trustee for another. This is a type of
revocable Trust in which the gift is not completed until
the grantor's death, or an unequivocal act reflecting
the gift during the grantor's lifetime.
Many Trusts themselves
establish "sub-Trusts". For
example, a revocable "living" Trust might establish
spendthrift Trust and a tax by-pass Trusts upon the
death of the first. Trusts can be structured to handle a
variety of situations but careful drafting is essential to
make the plan work.
================
Revocable Trusts
Living trusts help you manage your assets during your
lifetime as well as after your death. The trustee can
take control if you become mentally or physically
incapacitated. You can set up a living trust as either
revocable or irrevocable.
Revocable trusts give you more
flexibility than irrevocable trusts.
You still have ultimate control over the details of the
trust and may make changes or revoke the entire
agreement.
Irrevocable Trusts
Irrevocable trusts allow you to exclude the
value of certain assets from the rest of your estate to
reduce the taxes due upon your death. You may not
terminate an irrevocable trust, and the underlying
assets are permanently transferred to the trust.
If the beneficiary consents, you may change the terms
of the trust, but you cannot regain ownership of the
trust's assets.
Irrevocable trusts are often used to transfer a
valuable life insurance policy out of the estate. Once
the trust takes ownership, you may not change the
beneficiary or take out a loan against the policy.
Testamentary Trusts
Testamentary trusts do not take effect
until after death. The trust must be created as part of a
legally valid last will and testament. These trusts are
often used to pay an inheritance to a child when he
reaches a certain age or graduates from school. The
will must designate a trustee to manage the trust's
assets during the time period between the grantor's
death and the satisfaction of the trust's conditions.
''Understanding Trusts''
A trust is one of the fundamental documents of estate planning, but they come in many forms, from revocable
and irrevocable trusts to living and testamentary trusts. Learn which trust is best for you and your family.
A trust is one of the fundamental documents of estate planning, but they come in many forms, from revocable
and irrevocable trusts to living and testamentary trusts. Learn which trust is best for you and your family.
''Living Will vs. Trust - Definitions and
Differences.''
Living Wills and Living Trusts are
Very Different..
A living will vs. a living trust -- what's the difference? Many
people confuse living wills with living trusts because they're
both estate planning options and they sound much alike.
But, in fact, living wills and living trusts serve two completely
different purposes. Learn what a living will is and what a living
trust is so you'll never again confuse these two documents.
Living Wills vs. Living Trusts
A living trust covers three phases of your life - while you're
alive and well, while you're alive but not so well, and after your
death.
A living will only covers what
happens to you if you are near death.
What is a Living Will?
A living will is a document that allows you to explain your
wishes with regard to what medical procedures you want or
don't want when your health is critical and you can't voice your
wishes.
You might be in an irreversible coma or you've suffering from a
terminal illness and you're no longer lucid. You might have
suffered a severe injury and you're not expected to fully
recover.
A living will is specifically designed to deal with
questions about life-ending vs. life-sustaining
procedures.
A living will can be incorporated into an advance directive,
also called an advance medical directive.
This is a legal document that allows you to designate someone
else to make health care decisions for you if you're unable to
do so yourself.
It's not the same thing as a living will, which does not name or
appoint someone else to speak for you.
A living will simply states when and under what circumstances
you want health care providers to attempt to prolong your life
or to cease life-sustaining measures. Do you want your heart
resuscitated if it stops?
Would you rather not be placed on a ventilator even if it means
saving your life? A living will can also address issues of
palliative care and organ donation.
It allows you to express your wishes at a time when your life is
not yet threatened and You're thinking
clearly.
What is a Living Trust?
A living trust is a legal document created by an individual
called the trustmaker or sometimes the grantor. It holds and
owns his assets after he transfers him into the trust. This
property is invested and spent for the benefit of the
beneficiary, who is typically the trustmaker himself. It's
managed by its trustee, who is also usually the trustmaker.
As you can see, there's a big difference between having a
living will vs. a living trust. If you're not sure if you have a
living will, a revocable living trust or both, meet with an estate
planning attorney to review your documents and make sure
you have all of your bases covered.
There are other ways to pass your estate on to
beneficiaries, but only a living will can state your
wishes for end of life without debate.
''What is a Revocable Living Trust?
How Does a Revocable Living Trust
Work?
A revocable living trust -- sometimes simply called a living trust
-- is a legal entity created to hold ownership of an individual's
assets.
The person who forms the trust is called the grantor or
trustmaker, and in most cases, he also serves as the trustee,
controlling and managing the assets he placed there. Some
trustmakers prefer to have an institution or attorney acts as
trustee, although this is somewhat uncommon with this type of
trust.
A revocable living trust covers three
phases of the trustmaker's life: his lifetime,
possible incapacitation, and what happens after his death.
Phase One of a Revocable Living Trust: The Trustmaker is Alive
and Well
The trust's formation documents should include specific
provisions allowing the trustmaker to invest and spend the
trust assets for his own benefit during his lifetime.
He can go about business as usual with the assets that have
been transferred or funded into the trust's ownership,
assuming he hasn't appointed someone else to act as trustee.
In this case, the trustee would typically take direction from him.
The trustmaker reserves the right to
undo a revocable trust -- thus the term
"revocable." He can reclaim assets he's placed into it, divert
the trust's income to himself or to another beneficiary, sell the
assets or place more assets into it. He maintains final control.
A revocable living trust does not have its own taxpayer
identification number, unlike an irrevocable trust -- one where
the trustmaker gives up all control. A revocable trust and its
trustmaker share the same Social Security number. Trust taxes
are filed on the trustmaker's Form 1040, just as though he
continued to hold ownership of the assets personally.
Phase Two of a Revocable Living
Trust: The Trustmaker Becomes
Mentally Incapacitated
The trust agreement should also specify what happens if the
trustmaker becomes mentally incapacitated and can no longer
manage his own affairs and those of the trust. The trust
documents should name a "successor trustee," someone to
step in and take over management of the trust if the
trustmaker is determined to be mentally incompetent.
The successor trustee can then
manage the trustmaker's finances and
the assets that have been placed into
the trust.
Phase Three of a Revocable Living
Trust: The Trustmaker's Death
A revocable trust automatically becomes irrevocable when the
trustmaker dies because he can no longer make changes to it.
The named successor trustee steps in now as well, paying the
trustmaker's final bills, debts and taxes, just as he would if the
trustmaker became incapacitated. In the case of death,
however, he would then distribute the remaining assets to the
trust's beneficiaries according to instructions included in the
trust's formation documents.
Differences.''
Living Wills and Living Trusts are
Very Different..
A living will vs. a living trust -- what's the difference? Many
people confuse living wills with living trusts because they're
both estate planning options and they sound much alike.
But, in fact, living wills and living trusts serve two completely
different purposes. Learn what a living will is and what a living
trust is so you'll never again confuse these two documents.
Living Wills vs. Living Trusts
A living trust covers three phases of your life - while you're
alive and well, while you're alive but not so well, and after your
death.
A living will only covers what
happens to you if you are near death.
What is a Living Will?
A living will is a document that allows you to explain your
wishes with regard to what medical procedures you want or
don't want when your health is critical and you can't voice your
wishes.
You might be in an irreversible coma or you've suffering from a
terminal illness and you're no longer lucid. You might have
suffered a severe injury and you're not expected to fully
recover.
A living will is specifically designed to deal with
questions about life-ending vs. life-sustaining
procedures.
A living will can be incorporated into an advance directive,
also called an advance medical directive.
This is a legal document that allows you to designate someone
else to make health care decisions for you if you're unable to
do so yourself.
It's not the same thing as a living will, which does not name or
appoint someone else to speak for you.
A living will simply states when and under what circumstances
you want health care providers to attempt to prolong your life
or to cease life-sustaining measures. Do you want your heart
resuscitated if it stops?
Would you rather not be placed on a ventilator even if it means
saving your life? A living will can also address issues of
palliative care and organ donation.
It allows you to express your wishes at a time when your life is
not yet threatened and You're thinking
clearly.
What is a Living Trust?
A living trust is a legal document created by an individual
called the trustmaker or sometimes the grantor. It holds and
owns his assets after he transfers him into the trust. This
property is invested and spent for the benefit of the
beneficiary, who is typically the trustmaker himself. It's
managed by its trustee, who is also usually the trustmaker.
As you can see, there's a big difference between having a
living will vs. a living trust. If you're not sure if you have a
living will, a revocable living trust or both, meet with an estate
planning attorney to review your documents and make sure
you have all of your bases covered.
There are other ways to pass your estate on to
beneficiaries, but only a living will can state your
wishes for end of life without debate.
''What is a Revocable Living Trust?
How Does a Revocable Living Trust
Work?
A revocable living trust -- sometimes simply called a living trust
-- is a legal entity created to hold ownership of an individual's
assets.
The person who forms the trust is called the grantor or
trustmaker, and in most cases, he also serves as the trustee,
controlling and managing the assets he placed there. Some
trustmakers prefer to have an institution or attorney acts as
trustee, although this is somewhat uncommon with this type of
trust.
A revocable living trust covers three
phases of the trustmaker's life: his lifetime,
possible incapacitation, and what happens after his death.
Phase One of a Revocable Living Trust: The Trustmaker is Alive
and Well
The trust's formation documents should include specific
provisions allowing the trustmaker to invest and spend the
trust assets for his own benefit during his lifetime.
He can go about business as usual with the assets that have
been transferred or funded into the trust's ownership,
assuming he hasn't appointed someone else to act as trustee.
In this case, the trustee would typically take direction from him.
The trustmaker reserves the right to
undo a revocable trust -- thus the term
"revocable." He can reclaim assets he's placed into it, divert
the trust's income to himself or to another beneficiary, sell the
assets or place more assets into it. He maintains final control.
A revocable living trust does not have its own taxpayer
identification number, unlike an irrevocable trust -- one where
the trustmaker gives up all control. A revocable trust and its
trustmaker share the same Social Security number. Trust taxes
are filed on the trustmaker's Form 1040, just as though he
continued to hold ownership of the assets personally.
Phase Two of a Revocable Living
Trust: The Trustmaker Becomes
Mentally Incapacitated
The trust agreement should also specify what happens if the
trustmaker becomes mentally incapacitated and can no longer
manage his own affairs and those of the trust. The trust
documents should name a "successor trustee," someone to
step in and take over management of the trust if the
trustmaker is determined to be mentally incompetent.
The successor trustee can then
manage the trustmaker's finances and
the assets that have been placed into
the trust.
Phase Three of a Revocable Living
Trust: The Trustmaker's Death
A revocable trust automatically becomes irrevocable when the
trustmaker dies because he can no longer make changes to it.
The named successor trustee steps in now as well, paying the
trustmaker's final bills, debts and taxes, just as he would if the
trustmaker became incapacitated. In the case of death,
however, he would then distribute the remaining assets to the
trust's beneficiaries according to instructions included in the
trust's formation documents.
What Are the Essential Estate Planning Documents?
Documents that Should be a Part of Every Estate Plan..
Estate planning is the systematic approach to organizing your personal and financial
affairs in order to deal with the possibility of mental incapacity and certain death.
Depending on your current family and financial situations, your foundational estate plan
will include four or five essential legal estate planning documents. Aside from these
essential documents, the laws of your state may dictate the creation of other estate
planning documents.
Your estate planning attorney will be able to assist you with preparing all of the estate
planning documents that you will need for your situation.
Will-Based Estate Planning
If your current family and financial situations do not warrant the need for a Revocable
Living Trust, then your foundational estate plan will include the following four important
legal documents:
Last Will and Testament
Advance Medical Directive
Living Will
Financial Power of Attorney
Trust-Based Estate Planning
If your current family and/or financial situations warrant the need for a more sophisticated
estate plan, then your foundational estate plan will include the following five important
legal documents:
Pour Over Will
Revocable Living Trust
Advance Medical Directive
Living Will
Financial Power of Attorney
Here is a summary of the purpose of each
essential estate planning document listed
above:
Last Will and Testament or Pour Over Will
If you have a will-based estate plan, then your Last Will and Testament will contain a
detailed list of instructions as to how your property should be distributed after you die.
If you have minor children, it will also contain provisions for designating a guardian for
your children.
If you have a trust-based estate plan, then your Last Will and Testament will only be used
as a safety net to catch assets that you did not transfer into your trust prior to your death
and put them in there after your death.
This type of will is referred to as a Pour Over Will and contains minimal instructions since
your Revocable Trust is the main document governing your estate plan.
Revocable Living Trust
A Revocable Living Trust contains a detailed set of
instructions covering three important periods of your
life:
Documents that Should be a Part of Every Estate Plan..
Estate planning is the systematic approach to organizing your personal and financial
affairs in order to deal with the possibility of mental incapacity and certain death.
Depending on your current family and financial situations, your foundational estate plan
will include four or five essential legal estate planning documents. Aside from these
essential documents, the laws of your state may dictate the creation of other estate
planning documents.
Your estate planning attorney will be able to assist you with preparing all of the estate
planning documents that you will need for your situation.
Will-Based Estate Planning
If your current family and financial situations do not warrant the need for a Revocable
Living Trust, then your foundational estate plan will include the following four important
legal documents:
Last Will and Testament
Advance Medical Directive
Living Will
Financial Power of Attorney
Trust-Based Estate Planning
If your current family and/or financial situations warrant the need for a more sophisticated
estate plan, then your foundational estate plan will include the following five important
legal documents:
Pour Over Will
Revocable Living Trust
Advance Medical Directive
Living Will
Financial Power of Attorney
Here is a summary of the purpose of each
essential estate planning document listed
above:
Last Will and Testament or Pour Over Will
If you have a will-based estate plan, then your Last Will and Testament will contain a
detailed list of instructions as to how your property should be distributed after you die.
If you have minor children, it will also contain provisions for designating a guardian for
your children.
If you have a trust-based estate plan, then your Last Will and Testament will only be used
as a safety net to catch assets that you did not transfer into your trust prior to your death
and put them in there after your death.
This type of will is referred to as a Pour Over Will and contains minimal instructions since
your Revocable Trust is the main document governing your estate plan.
Revocable Living Trust
A Revocable Living Trust contains a detailed set of
instructions covering three important periods of your
life:
A Revocable Living Trust contains a
detailed set of instructions covering
three important periods of your life:
What happens while you
are alive and well;
What happens if you
become mentally
incapacitated;
and What happens after
your death.
In addition, assets held in the name of your Revocable
Living Trust at the time of your death will avoid probate.
Advance Medical Directive
An Advance Medical Directive, also
called a Medical Power of Attorney or Designation of
Health Care Surrogate, allows you to designate a health
care agent to make medical decisions for you if, for any
reason, you are unable to make them for yourself.
It can also be used to designate someone to serve as
your guardian or conservator in the event a court
determines that you have become mentally
incapacitated.
Living Will
A Living Will contains a written set of
instructions to your physician as to whether or not you
want to receive life-sustaining procedures if you have
been diagnosed with a terminal condition, end stage
condition, or are in a persistent vegetative state.
It also gives guidelines for your family members to
follow if you become terminally ill.
Financial Power of Attorney
A Financial Power of Attorney allows
you to delegate to the person of your choice the ability
to manage assets that are titled in your individual
name, including retirement plans, and assets titled in
joint names as tenants in common.
It can also be used to transfer assets into your
Revocable Living Trust if you become mentally
incapacitated before the trust has been fully funded.
Financial Powers of Attorney
come in two forms:
A Durable Power of Attorney, which
goes into effect as soon as you sign it; and
A Springing Power of Attorney, which only goes into
effect after you have been declared mentally
incapacitated.
detailed set of instructions covering
three important periods of your life:
What happens while you
are alive and well;
What happens if you
become mentally
incapacitated;
and What happens after
your death.
In addition, assets held in the name of your Revocable
Living Trust at the time of your death will avoid probate.
Advance Medical Directive
An Advance Medical Directive, also
called a Medical Power of Attorney or Designation of
Health Care Surrogate, allows you to designate a health
care agent to make medical decisions for you if, for any
reason, you are unable to make them for yourself.
It can also be used to designate someone to serve as
your guardian or conservator in the event a court
determines that you have become mentally
incapacitated.
Living Will
A Living Will contains a written set of
instructions to your physician as to whether or not you
want to receive life-sustaining procedures if you have
been diagnosed with a terminal condition, end stage
condition, or are in a persistent vegetative state.
It also gives guidelines for your family members to
follow if you become terminally ill.
Financial Power of Attorney
A Financial Power of Attorney allows
you to delegate to the person of your choice the ability
to manage assets that are titled in your individual
name, including retirement plans, and assets titled in
joint names as tenants in common.
It can also be used to transfer assets into your
Revocable Living Trust if you become mentally
incapacitated before the trust has been fully funded.
Financial Powers of Attorney
come in two forms:
A Durable Power of Attorney, which
goes into effect as soon as you sign it; and
A Springing Power of Attorney, which only goes into
effect after you have been declared mentally
incapacitated.
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Blind trust:
A blind trust is a trust in which the
fiduciaries, namely the trustees or those
who have been given power of attorney,
have full discretion over the assets, and
the trust beneficiaries have no
knowledge of the holdings of the trust
and no right to intervene in their
handling.
A blind trust is a trust in which the
fiduciaries, namely the trustees or those
who have been given power of attorney,
have full discretion over the assets, and
the trust beneficiaries have no
knowledge of the holdings of the trust
and no right to intervene in their
handling.
''A trust is a relationship whereby
property is held by one party for the
benefit of another''.
A trust is created by a settlor, who
transfers property to a trustee.
The trustee holds that property for
the trust's beneficiaries. Trusts exist
mainly in common law jurisdictions
and similar systems existed since
Roman times
----------
A blind trust is a trust in which the trust
beneficiaries have no knowledge of the holdings of the
trust, and no right to intervene in their handling.
In a blind trust, the trustees (fiduciaries, or those who
have been given power of attorney) have full discretion
over the assets.
Blind trusts are generally used when a trust creator
(sometimes called a settlor, trustor, grantor, or donor)
wishes for the beneficiary to be unaware of the specific
assets in the trust, such as to avoid conflict of interest
between the beneficiary and the investments
property is held by one party for the
benefit of another''.
A trust is created by a settlor, who
transfers property to a trustee.
The trustee holds that property for
the trust's beneficiaries. Trusts exist
mainly in common law jurisdictions
and similar systems existed since
Roman times
----------
A blind trust is a trust in which the trust
beneficiaries have no knowledge of the holdings of the
trust, and no right to intervene in their handling.
In a blind trust, the trustees (fiduciaries, or those who
have been given power of attorney) have full discretion
over the assets.
Blind trusts are generally used when a trust creator
(sometimes called a settlor, trustor, grantor, or donor)
wishes for the beneficiary to be unaware of the specific
assets in the trust, such as to avoid conflict of interest
between the beneficiary and the investments
''Special needs trust''
A special needs trust is a trust designed for
beneficiaries who are disabled, either
physically or mentally.
It is written so the beneficiary can enjoy the
use of property that is held in the trust for his
or her benefit, while at the same time allowing
the beneficiary to receive essential
needs-based government benefits.
-------------
''A special needs trust is a trust designed for
beneficiaries with disabilities, either
physically or mentally challenged.
It is written so the beneficiary can enjoy the
use of property that is held in the trust for his
or her benefit, while at the same time allowing
the beneficiary to receive essential
needs-based government benefits.
In addition to the public benefits preservation
reasons for such a trust, there will be
administrative advantages of using a trust to
hold and manage property intended for the
benefit of the beneficiary if the beneficiary
lacks the legal capacity to handle his or her
own financial affairs.
Special needs trusts are sometimes known
as supplemental needs trusts in the United
States.
A special needs trust is a trust designed for
beneficiaries who are disabled, either
physically or mentally.
It is written so the beneficiary can enjoy the
use of property that is held in the trust for his
or her benefit, while at the same time allowing
the beneficiary to receive essential
needs-based government benefits.
-------------
''A special needs trust is a trust designed for
beneficiaries with disabilities, either
physically or mentally challenged.
It is written so the beneficiary can enjoy the
use of property that is held in the trust for his
or her benefit, while at the same time allowing
the beneficiary to receive essential
needs-based government benefits.
In addition to the public benefits preservation
reasons for such a trust, there will be
administrative advantages of using a trust to
hold and manage property intended for the
benefit of the beneficiary if the beneficiary
lacks the legal capacity to handle his or her
own financial affairs.
Special needs trusts are sometimes known
as supplemental needs trusts in the United
States.
Special needs trusts can provide benefits to, and protect the assets of, the physically challenged or the mentally challenged.
Special needs trusts are frequently used to receive an inheritance or personal injury settlement proceeds on behalf of a person with
disability or are founded from the proceeds of compensation for criminal injuries, litigation or insurance settlements.
A common feature of trusts in all common law jurisdictions is that they may be run either by family members
(a private trust) or by trustees appointed by the court.
Especially where a trust is to be established for a child or young person with disability, great care is generally taken in the choice of
appropriate trustees to manage the trust assets and to deal with future replacement appointments
Special needs trusts are frequently used to receive an inheritance or personal injury settlement proceeds on behalf of a person with
disability or are founded from the proceeds of compensation for criminal injuries, litigation or insurance settlements.
A common feature of trusts in all common law jurisdictions is that they may be run either by family members
(a private trust) or by trustees appointed by the court.
Especially where a trust is to be established for a child or young person with disability, great care is generally taken in the choice of
appropriate trustees to manage the trust assets and to deal with future replacement appointments
Alphabetic list of trust types
Trusts go by many different names, depending on the characteristics or the purpose of the trust.
Because trusts often have multiple characteristics or purposes, a single trust might accurately be
described in several ways.
For example, a living trust is often an express trust, which is also a revocable trust, and might include an
incentive trust, and so forth.
--------------
Community land trust: A community land trust is a nonprofit corporation that develops and
stewards affordable housing, community gardens, civic buildings, commercial spaces and other
community assets on behalf of a community.
“CLTs” balance the needs of individuals to access land and maintain security of tenure with a
community’s need to maintain affordability, economic diversity and local access to essential services.
--------------
Constructive trust: Unlike an express trust, a constructive trust is not created by an agreement
between a settlor and the trustee. A constructive trust is imposed by the law as an "equitable remedy".
This generally occurs due to some wrongdoing, where the wrongdoer has acquired legal title to some
property and cannot in good conscience be allowed to benefit from it.
A constructive trust is, essentially, a legal fiction. For example, a court of equity recognizing a
plaintiff's request for the equitable remedy of a constructive trust may decide that a constructive trust
has been created and simply order the person holding the assets to deliver them to the person who
rightfully should have them.
The constructive trustee is not necessarily the person who is guilty of the wrongdoing, and in
practice it is often a bank or similar organization.
The distinction may be finer than the preceding exposition in that there are also said to be two forms of
constructive trust, the institutional constructive trust and the remedial constructive trust. The latter is an
"equitable remedy" imposed by law being truly remedial; the former arising due to some defect in the
transfer of property.
-----------------
Discretionary trust: In a discretionary trust, certainty of object is satisfied if it can be said that
there is a criterion which a person must satisfy in order to be a beneficiary (i.e., whether there is a 'class'
of beneficiaries, which a person can be said to belong to). In that way, persons who satisfy that criterion
(who are members of that class) can enforce the trust. Re Baden’s Deed Trusts;
----------------
Directed trust: In these types, a directed trustee is directed by a number of other trust participants
in implementing the trust's execution; these participants may include a distribution committee, trust
protector, or investment advisor.
The directed trustee's role is administrative which involves following investment instructions, holding
legal title to the trust assets, providing fiduciary and tax accounting, coordinating trust participants and
offering dispute resolution among the participants
----------------
Dynasty trust (also known as a generation-skipping trust): A type of trust in which assets are
passed down to the grantor's grandchildren, not the grantor's children. The children of the grantor never
take title to the assets.
This allows the grantor to avoid the estate taxes that would apply if the assets were transferred to his or
her children first. Generation-skipping trusts can still be used to provide financial benefits to a grantor's
children, however, because any income generated by the trust's assets can be made accessible to the
grantor's children while still leaving the assets in trust for the grandchildren.
-------------
Express trust: An express trust arises where a settlor deliberately and consciously decides to
create a trust, over their assets, either now, or upon his or her later death.
In these cases this will be achieved by signing a trust instrument, which will either be a will or a trust
deed. Almost all trusts dealt with in the trust industry are of this type. They contrast with resulting and
constructive trusts.
The intention of the parties to create the trust must be shown clearly by their language or conduct. For an
express trust to exist, there must be certainty to the objects of the trust and the trust property. In the USA
Statute of Frauds provisions require express trusts to be evidenced in writing if the trust property is
above a certain value, or is real estate.
--------------
Fixed trust: In a fixed trust, the entitlement of the beneficiaries is fixed by the settlor. The trustee
has little or no discretion. Common examples are: a trust for a minor ("to x if she attains 21");
a life interest ("to pay the income to x for her lifetime"); and
a remainder ("to pay the capital to y after the death of x")
Grantor retained annuity trust (GRAT): GRAT is an irrevocable trust whereby a grantor transfers asset(s),
as a gift, into a trust and receives an annual payment from the trust for a period of time specified in the
trust instrument.
At the end of the term, the financial property is transferred (tax-free) to the named beneficiaries. This trust
is commonly used in the U.S. to facilitate large financial gifts that are not subject to a gift tax.
----------------
Hybrid trust: A hybrid trust combines elements of both fixed and discretionary trusts. In a hybrid
trust, the trustee must pay a certain amount of the trust property to each beneficiary fixed by the settlor.
But the trustee has discretion as to how any remaining trust property, once these fixed amounts have
been paid out, is to be paid to the -beneficiaries.
--------------
Implied trust: An implied trust, as distinct from an express trust, is created where some of the legal
requirements for an express trust are not met, but an intention on behalf of the parties to create a trust
can be presumed to exist.
A resulting trust may be deemed to be present where a trust instrument is not properly drafted and a
portion of the equitable title has not been provided for.
In such a case, the law may raise a resulting trust for the benefit of the grantor (the creator of the trust). In
other words, the grantor may be deemed to be a beneficiary of the portion of the equitable title that was
not properly provided for in the trust document.
Improvement trust: Improvement trusts can be set up by urban or local government to hold
funds for the development or improvement of an area. The trust is often run by a committee, and can act
similarly to a development agency, depending on the provisions of its charter.
------------
Incentive trust: A trust that uses distributions from income or principal as an incentive to
encourage or discourage certain behaviors on the part of the beneficiary.
The term "incentive trust" is sometimes used to distinguish trusts that provide fixed conditions for
access to trust funds from discretionary trusts that leave such decisions up to the trustee.
Inter vivos trust (or living trust):
A settlor who is living at the time the trust is established creates an inter vivos trust.
--------------
Irrevocable trust: In contrast to a revocable trust, an irrevocable trust is one in which the terms
of the trust cannot be amended or revised until the terms or purposes of the trust have been completed.
Although in rare cases, a court may change the terms of the trust due to unexpected changes in
circumstances that make the trust uneconomical or unwieldy to administer, under normal circumstances
an irrevocable trust may not be changed by the trustee or the beneficiaries of the trust.
---------------
Land Trust: A private, nonprofit organization that, as all or part of its mission, actively works to
conserve land by undertaking or assisting in land or conservation easement acquisition, or by its
stewardship of such land or easements; or an agreement whereby one party (the trustee) agrees to hold
ownership of a piece of real property for the benefit of another party (the beneficiary).
------------------
Offshore trust: Strictly speaking, an offshore trust is a trust which is resident in any jurisdiction
other than that in which the settlor is resident. However, the term is more commonly used to describe a
trust in one of the jurisdictions known as offshore financial centers or, colloquially, as tax havens.
Offshore trusts are usually conceptually similar to onshore trusts in common law countries, but usually
with legislative modifications to make them more commercially attractive by abolishing or modifying
certain common law restrictions.
By extension, "onshore trust" has come to mean any trust resident in a high-tax jurisdiction.
---------------
Personal injury trust: A personal injury trust is any form of trust where funds are held by
trustees for the benefit of a person who has suffered an injury and funded exclusively by funds derived
from payments made in consequence of that injury.
---------------
Private and public trusts: A private trust has one or more particular individuals as its
beneficiary. By contrast, a public trust (also called a charitable trust) has some charitable end as its
beneficiary. In order to qualify as a charitable trust, the trust must have as its object certain purposes
such as alleviating poverty, providing education, carrying out some religious purpose, etc.
The permissible objects are generally set out in legislation, but objects not explicitly set out may also be
an object of a charitable trust, by analogy.
Charitable trusts are entitled to special treatment under the law of trusts and also the law of taxation.
------------
Protective trust: Here the terminology is different between the UK and the USA: In the UK, a
protective trust is a life interest that terminates upon the happening of a specified event; such as the
bankruptcy of the beneficiary, or any attempt by an individual to dispose of his or her interest. They have
become comparatively rare.
In the USA, a protective trust is a type of trust that was devised for use in estate planning. (In another
jurisdiction this might be thought of as one type of asset protection trust.)
Often a person, A, wishes to leave property to another person B. A, however, fears that the property
might be claimed by creditors before A dies, and that therefore B would receive none of it.
A could establish a trust with B as the beneficiary, but then A would not be entitled to use of the property
before they died. Protective trusts were developed as a solution to this situation.
A would establish a trust with both A and B as beneficiaries, with the trustee instructed to allow A use of
the property until they died, and thereafter to allow its use to B. The property is then safe from being
claimed by A's creditors, at least so long as the debt was entered into after the trust's establishment.
This use of trusts is similar to life estates and remainders, and is frequently used as an alternative to
them.
-----------
Purpose trust: Or, more accurately, non-charitable purpose trust (all charitable trusts are purpose
trusts). Generally, the law does not permit non-charitable purpose trusts outside of certain anomalous
exceptions which arose under the eighteenth century common law (and, arguable, Quistclose trusts).
Certain jurisdictions (principally, offshore jurisdictions) have enacted legislation validating non-
charitable purpose trusts generally.
---------------
QTIP Trust: Short for "qualified terminal interest property." A trust recognized under the tax laws of
the United States which qualifies for the marital gift exclusion from the estate tax.
----------------
Resulting trust: A resulting trust is a form of implied trust which occurs where a trust fails, wholly
or in part, as a result of which the settlor becomes entitled to the assets; or a voluntary payment is made
by A to B in circumstances which do not suggest gifting. B becomes the resulting trustee of A's payment.
----------------
Revocable trust: A trust of this kind may be amended, altered or revoked by its settlor at any time,
provided the settlor is not mentally incapacitated.
Revocable trusts are becoming increasingly common in the US as a substitute for a will to minimize
administrative costs associated with probate and to provide centralized administration of a person's final
affairs after death.
------------
Secret trust: A post mortem trust constituted externally from a will but imposing obligations as a
trustee on one, or more, legatees of a will.
------------
Semi-secret trust: A trust in which a will demonstrates the intention to create a trust, names a
trustee, but does not identify the intended beneficiary
Special trust: In the US, a special trust, also called complex trust, contrasts with a simple trust (see
above). It does not require the income be paid out within the subject tax year. The funds from a complex
trust can also be used to donate to a charity or for charitable purposes.
----------------
Special Power of Appointment trust (SPA Trust): A trust implementing a special
power of appointment to provide asset protection features.
------
Spendthrift trust: It is a trust put into place for the benefit of a person who is unable to control
their spending. It gives the trustee the power to decide how the trust funds may be spent for the benefit
of the beneficiary.
------------
Standby Trust (or Pourover Trust): The trust is empty at creation during life and the will
transfers the property into the trust at death. This is a statutory trust.
---------------
Statutory Business Trust: A trust created pursuant to a state's business trust statute used
primarily for commercial purposes. Two prominent variants of Statutory Business Trusts are
Delaware statutory trusts and Massachusetts business trusts. The Uniform Law
Commission promulgated a final amended draft of the Uniform Statutory Entity Act , no states have
adopted the Uniform Statutory Entity Act
Testamentary trust (or Will Trust): A trust created in an individual's will is called a
testamentary trust. Because a will can become effective only upon death, a testamentary trust is
generally created at or following the date of the settlor's death.
---------------
Unit trust: A trust where the beneficiaries (called unitholders) each possess a certain share (called
units) and can direct the trustee to pay money to them out of the trust property according to the number
of units they possess.
A unit trust is a vehicle for collective investment, rather than disposition, as the person who gives the
property to the trustee is also the beneficiary
Trusts go by many different names, depending on the characteristics or the purpose of the trust.
Because trusts often have multiple characteristics or purposes, a single trust might accurately be
described in several ways.
For example, a living trust is often an express trust, which is also a revocable trust, and might include an
incentive trust, and so forth.
--------------
Community land trust: A community land trust is a nonprofit corporation that develops and
stewards affordable housing, community gardens, civic buildings, commercial spaces and other
community assets on behalf of a community.
“CLTs” balance the needs of individuals to access land and maintain security of tenure with a
community’s need to maintain affordability, economic diversity and local access to essential services.
--------------
Constructive trust: Unlike an express trust, a constructive trust is not created by an agreement
between a settlor and the trustee. A constructive trust is imposed by the law as an "equitable remedy".
This generally occurs due to some wrongdoing, where the wrongdoer has acquired legal title to some
property and cannot in good conscience be allowed to benefit from it.
A constructive trust is, essentially, a legal fiction. For example, a court of equity recognizing a
plaintiff's request for the equitable remedy of a constructive trust may decide that a constructive trust
has been created and simply order the person holding the assets to deliver them to the person who
rightfully should have them.
The constructive trustee is not necessarily the person who is guilty of the wrongdoing, and in
practice it is often a bank or similar organization.
The distinction may be finer than the preceding exposition in that there are also said to be two forms of
constructive trust, the institutional constructive trust and the remedial constructive trust. The latter is an
"equitable remedy" imposed by law being truly remedial; the former arising due to some defect in the
transfer of property.
-----------------
Discretionary trust: In a discretionary trust, certainty of object is satisfied if it can be said that
there is a criterion which a person must satisfy in order to be a beneficiary (i.e., whether there is a 'class'
of beneficiaries, which a person can be said to belong to). In that way, persons who satisfy that criterion
(who are members of that class) can enforce the trust. Re Baden’s Deed Trusts;
----------------
Directed trust: In these types, a directed trustee is directed by a number of other trust participants
in implementing the trust's execution; these participants may include a distribution committee, trust
protector, or investment advisor.
The directed trustee's role is administrative which involves following investment instructions, holding
legal title to the trust assets, providing fiduciary and tax accounting, coordinating trust participants and
offering dispute resolution among the participants
----------------
Dynasty trust (also known as a generation-skipping trust): A type of trust in which assets are
passed down to the grantor's grandchildren, not the grantor's children. The children of the grantor never
take title to the assets.
This allows the grantor to avoid the estate taxes that would apply if the assets were transferred to his or
her children first. Generation-skipping trusts can still be used to provide financial benefits to a grantor's
children, however, because any income generated by the trust's assets can be made accessible to the
grantor's children while still leaving the assets in trust for the grandchildren.
-------------
Express trust: An express trust arises where a settlor deliberately and consciously decides to
create a trust, over their assets, either now, or upon his or her later death.
In these cases this will be achieved by signing a trust instrument, which will either be a will or a trust
deed. Almost all trusts dealt with in the trust industry are of this type. They contrast with resulting and
constructive trusts.
The intention of the parties to create the trust must be shown clearly by their language or conduct. For an
express trust to exist, there must be certainty to the objects of the trust and the trust property. In the USA
Statute of Frauds provisions require express trusts to be evidenced in writing if the trust property is
above a certain value, or is real estate.
--------------
Fixed trust: In a fixed trust, the entitlement of the beneficiaries is fixed by the settlor. The trustee
has little or no discretion. Common examples are: a trust for a minor ("to x if she attains 21");
a life interest ("to pay the income to x for her lifetime"); and
a remainder ("to pay the capital to y after the death of x")
Grantor retained annuity trust (GRAT): GRAT is an irrevocable trust whereby a grantor transfers asset(s),
as a gift, into a trust and receives an annual payment from the trust for a period of time specified in the
trust instrument.
At the end of the term, the financial property is transferred (tax-free) to the named beneficiaries. This trust
is commonly used in the U.S. to facilitate large financial gifts that are not subject to a gift tax.
----------------
Hybrid trust: A hybrid trust combines elements of both fixed and discretionary trusts. In a hybrid
trust, the trustee must pay a certain amount of the trust property to each beneficiary fixed by the settlor.
But the trustee has discretion as to how any remaining trust property, once these fixed amounts have
been paid out, is to be paid to the -beneficiaries.
--------------
Implied trust: An implied trust, as distinct from an express trust, is created where some of the legal
requirements for an express trust are not met, but an intention on behalf of the parties to create a trust
can be presumed to exist.
A resulting trust may be deemed to be present where a trust instrument is not properly drafted and a
portion of the equitable title has not been provided for.
In such a case, the law may raise a resulting trust for the benefit of the grantor (the creator of the trust). In
other words, the grantor may be deemed to be a beneficiary of the portion of the equitable title that was
not properly provided for in the trust document.
Improvement trust: Improvement trusts can be set up by urban or local government to hold
funds for the development or improvement of an area. The trust is often run by a committee, and can act
similarly to a development agency, depending on the provisions of its charter.
------------
Incentive trust: A trust that uses distributions from income or principal as an incentive to
encourage or discourage certain behaviors on the part of the beneficiary.
The term "incentive trust" is sometimes used to distinguish trusts that provide fixed conditions for
access to trust funds from discretionary trusts that leave such decisions up to the trustee.
Inter vivos trust (or living trust):
A settlor who is living at the time the trust is established creates an inter vivos trust.
--------------
Irrevocable trust: In contrast to a revocable trust, an irrevocable trust is one in which the terms
of the trust cannot be amended or revised until the terms or purposes of the trust have been completed.
Although in rare cases, a court may change the terms of the trust due to unexpected changes in
circumstances that make the trust uneconomical or unwieldy to administer, under normal circumstances
an irrevocable trust may not be changed by the trustee or the beneficiaries of the trust.
---------------
Land Trust: A private, nonprofit organization that, as all or part of its mission, actively works to
conserve land by undertaking or assisting in land or conservation easement acquisition, or by its
stewardship of such land or easements; or an agreement whereby one party (the trustee) agrees to hold
ownership of a piece of real property for the benefit of another party (the beneficiary).
------------------
Offshore trust: Strictly speaking, an offshore trust is a trust which is resident in any jurisdiction
other than that in which the settlor is resident. However, the term is more commonly used to describe a
trust in one of the jurisdictions known as offshore financial centers or, colloquially, as tax havens.
Offshore trusts are usually conceptually similar to onshore trusts in common law countries, but usually
with legislative modifications to make them more commercially attractive by abolishing or modifying
certain common law restrictions.
By extension, "onshore trust" has come to mean any trust resident in a high-tax jurisdiction.
---------------
Personal injury trust: A personal injury trust is any form of trust where funds are held by
trustees for the benefit of a person who has suffered an injury and funded exclusively by funds derived
from payments made in consequence of that injury.
---------------
Private and public trusts: A private trust has one or more particular individuals as its
beneficiary. By contrast, a public trust (also called a charitable trust) has some charitable end as its
beneficiary. In order to qualify as a charitable trust, the trust must have as its object certain purposes
such as alleviating poverty, providing education, carrying out some religious purpose, etc.
The permissible objects are generally set out in legislation, but objects not explicitly set out may also be
an object of a charitable trust, by analogy.
Charitable trusts are entitled to special treatment under the law of trusts and also the law of taxation.
------------
Protective trust: Here the terminology is different between the UK and the USA: In the UK, a
protective trust is a life interest that terminates upon the happening of a specified event; such as the
bankruptcy of the beneficiary, or any attempt by an individual to dispose of his or her interest. They have
become comparatively rare.
In the USA, a protective trust is a type of trust that was devised for use in estate planning. (In another
jurisdiction this might be thought of as one type of asset protection trust.)
Often a person, A, wishes to leave property to another person B. A, however, fears that the property
might be claimed by creditors before A dies, and that therefore B would receive none of it.
A could establish a trust with B as the beneficiary, but then A would not be entitled to use of the property
before they died. Protective trusts were developed as a solution to this situation.
A would establish a trust with both A and B as beneficiaries, with the trustee instructed to allow A use of
the property until they died, and thereafter to allow its use to B. The property is then safe from being
claimed by A's creditors, at least so long as the debt was entered into after the trust's establishment.
This use of trusts is similar to life estates and remainders, and is frequently used as an alternative to
them.
-----------
Purpose trust: Or, more accurately, non-charitable purpose trust (all charitable trusts are purpose
trusts). Generally, the law does not permit non-charitable purpose trusts outside of certain anomalous
exceptions which arose under the eighteenth century common law (and, arguable, Quistclose trusts).
Certain jurisdictions (principally, offshore jurisdictions) have enacted legislation validating non-
charitable purpose trusts generally.
---------------
QTIP Trust: Short for "qualified terminal interest property." A trust recognized under the tax laws of
the United States which qualifies for the marital gift exclusion from the estate tax.
----------------
Resulting trust: A resulting trust is a form of implied trust which occurs where a trust fails, wholly
or in part, as a result of which the settlor becomes entitled to the assets; or a voluntary payment is made
by A to B in circumstances which do not suggest gifting. B becomes the resulting trustee of A's payment.
----------------
Revocable trust: A trust of this kind may be amended, altered or revoked by its settlor at any time,
provided the settlor is not mentally incapacitated.
Revocable trusts are becoming increasingly common in the US as a substitute for a will to minimize
administrative costs associated with probate and to provide centralized administration of a person's final
affairs after death.
------------
Secret trust: A post mortem trust constituted externally from a will but imposing obligations as a
trustee on one, or more, legatees of a will.
------------
Semi-secret trust: A trust in which a will demonstrates the intention to create a trust, names a
trustee, but does not identify the intended beneficiary
Special trust: In the US, a special trust, also called complex trust, contrasts with a simple trust (see
above). It does not require the income be paid out within the subject tax year. The funds from a complex
trust can also be used to donate to a charity or for charitable purposes.
----------------
Special Power of Appointment trust (SPA Trust): A trust implementing a special
power of appointment to provide asset protection features.
------
Spendthrift trust: It is a trust put into place for the benefit of a person who is unable to control
their spending. It gives the trustee the power to decide how the trust funds may be spent for the benefit
of the beneficiary.
------------
Standby Trust (or Pourover Trust): The trust is empty at creation during life and the will
transfers the property into the trust at death. This is a statutory trust.
---------------
Statutory Business Trust: A trust created pursuant to a state's business trust statute used
primarily for commercial purposes. Two prominent variants of Statutory Business Trusts are
Delaware statutory trusts and Massachusetts business trusts. The Uniform Law
Commission promulgated a final amended draft of the Uniform Statutory Entity Act , no states have
adopted the Uniform Statutory Entity Act
Testamentary trust (or Will Trust): A trust created in an individual's will is called a
testamentary trust. Because a will can become effective only upon death, a testamentary trust is
generally created at or following the date of the settlor's death.
---------------
Unit trust: A trust where the beneficiaries (called unitholders) each possess a certain share (called
units) and can direct the trustee to pay money to them out of the trust property according to the number
of units they possess.
A unit trust is a vehicle for collective investment, rather than disposition, as the person who gives the
property to the trustee is also the beneficiary
Wills and Estate Planning
Will your loved ones be taken care of after you're gone? If you don't properly plan your estate, it's no sure thing. Learn how to draft a
will, avoid probate, appoint an executor, establish a trust, plan for tax considerations, and other important estate-planning tasks.
Estate and Gift Taxes
It's critical to navigate the tax code when planning an estate. Learn about the taxes that affect every estate, including gift taxes, estate
taxes, generation skipping transfer taxes and income taxes. And find out how to minimize or even eliminate estate taxes if your estate
is taxable.
===========
Understanding Ownership of Property
If you want to know who will inherit your property after you die, then you'll need to understand the different types of property
ownership. From sole ownership to joint tenants and everything in between, each type of ownership will result in different
beneficiaries after death.
===========
What Are Non Probate Assets?
Non Probate Property Avoids Costly Probate..
Non probate assets are a special type of property that won't need to go through the probate process after you die and will instead
pass directly to your heirs.
Owning non probate property is one of the easiest ways to avoid costly and time-consuming probate. Non probate property will
generally be available to your heirs within a short period of time after your death once your heirs receive a death certificate.
=========
A Word of Caution About Non Probate Property
While avoiding probate may on the surface appear be a good result, sometimes non probate property will end up in the hands of
beneficiaries, or worse yet, creditors, you didn't intend to have it.
non probate property should only be used after understanding exactly who will inherit it after you die as well as the legal
consequences of adding owners to accounts or real estate deeds.
In general, there are six different types of non probate assets which are described in detail below.
6 Types of Non Probate Assets
Assets you own in your sole name but have a payable on death (POD), transfer on death (TOD), or in trust for (ITF) designation will
avoid probate after you die. This includes Health Savings Accounts and Transfer on Death or Beneficiary Deeds which are available
in a handful of states. However, if all of the designated beneficiaries predecease the account or property owner, then the account or
real estate will have to go through probate.
=============
Assets you own jointly with your spouse or others, such as a child or sibling, through rights of survivorship (joint tenants with rights
of survivorship, or JTWROS) will avoid probate after you die.
Assets you own with your spouse in a special type of joint ownership recognized in some states called tenants by the entirety (or
TBE) will avoid probate after you die.
Assets owned by your Revocable Living Trust at the time of your death will avoid probate after you die. Assets that aren't owned by
your trust at the time of your death but remain in your individual name without some type of beneficiary designation will not avoid
probate after you die.
Assets in which you retain a life estate and the remainder passes to a non-charitable beneficiary other than yourself, including real
estate owned in certain states by an enhanced life estate deed, will avoid probate after you die.
Assets owned by you through contract rights which are payable to a designated beneficiary after your death, including life insurance
policies, IRAs, 401(k)s and annuities, will avoid probate after you die.
However, if all of the designated beneficiaries of any of these types of assets predecease the account owner, then the asset will need
to go through probate.
============
Advice on Easy Ways to Avoid Probate
How to Avoid Probate - 4 Easy Ways..
In most cases probate is easy to avoid, and yet many people fail to do so. Below you will find a list of the only four ways to avoid
probate. What will work in your situation will depend on how your assets are titled and who you want to inherit your estate after you
die.
=============
#1 - Get Rid of All of Your Property
The most extreme way to avoid the probate of your estate is to get rid of all of your property, because without any property you will
not have an estate that will need to be probated.
Of course, this really isn't practical since you will need money to live on until your death, but in certain cases giving most of your
assets away through the use of a special type of trust of which you can be a beneficiary may make sense. Using this type of trust
combined with one or more of the other techniques described below for any assets that are not transferred into the trust will mean no
probate assets and, therefore, no probate estate.
=============
#2 - Use Joint Ownership With Rights of Survivorship or Tenancy by the Entirety
Adding a joint owner to a bank account or investment account or to the deed for real estate will also avoid probate, provided that it is
clear that the account is owned as joint tenants with rights of survivorship and not as tenants in common. If you are married, then in
certain states you and your spouse can own property with rights of survivorship in the form of tenancy by the entirety.
There are, however, several drawbacks to relying on joint ownership with rights of survivorship or tenancy by the entirety to avoid
probate:
In many cases adding a joint owner to an account or deed will be a taxable gift that needs to be reported to the IRS on a federal gift tax
return (IRS Form 709).
If a joint owner is sued or gets divorced, then a judgment creditor or divorcing spouse may be able to take some or even all of
the assets in the joint account.
If a joint owner dies before you do, then 50% or even 100% of the joint account could be included in the deceased owner's estate for
estate tax purposes.
If you are in a second or later marriage, leaving your property to your spouse by right of survivorship or tenancy by the entirety will
mean that your spouse will be free to do whatever he or she wants with your property after your spouse later dies.
This may not be what you want - in other words, you may want your spouse to have use of your property after you die, but then after
your spouse later dies you may want your property to go to your own children.
In this situation, joint ownership with right of survivorship or tenancy by the entirety will not accomplish your final wishes since your
spouse may freely choose to leave your property to your spouse's children instead of your children or even to a new spouse.
======
#3 - Use Beneficiary Designations
If you own life insurance or assets held in a retirement account such as an IRA, 401(k) or annuity, then you are already taking
advantage of probate avoidance through the use of beneficiary designations. What you may not know is that most states allow you to
designate beneficiaries for your bank accounts (this is referred to as a "payable on death" or "POD" account), and also for your non-
retirement investment accounts (this is referred to as a "transfer on death" or "TOD" account). In addition, a handful of states allow
you designate beneficiaries for your real estate through the use of a transfer on death deed or beneficiary deed or affidavit.
In other states you can use a life estate deed to retain ownership of real estate during your lifetime and then pass the property on to
the beneficiaries of your choice after you die without the need to probate the real estate.
#4 - Use a Revocable Living Trust
A revocable living trust is a written agreement which covers three phases of your life:
While you are alive and well; If you become mentally incapacitated; and After you die.
But signing the revocable living trust agreement by itself is not enough to avoid the probate of your property after you die. Instead,
once the trust agreement is signed, you will need to take your assets and title them in the name of your trust. Only after your revocable
living trust has become the record owner of your assets will the assets owned by the trust (instead of you) avoid probate.
This is called funding the trust, and if you visualize your trust as a bucket, then you need to fill the bucket with your assets in order to
insure that the assets will avoid probate after you die.
If any of your assets sit outside of the trust (bucket) at the time of your death, then the unfunded assets will need to be probated
unless they have a beneficiary designation or are owned with rights of survivorship with someone who survives you.
=============
How Property is Titled Dictates Who Inherits It After You Die
Understanding Ownership of Property - The Real Key to Good Estate Planning..
While in general estate planning can be a complicated process with a multitude of factors to be considered and decisions to be made,
time and time again I find that it all simply boils down to one common denominator - how property is titled. Understanding who owns
what is the one real key to creating a good estate plan, because without property being titled as expected, even the most
sophisticated and well thought-out estate plan will fail miserably.
=============
Understanding Ownership of Property
When an estate planning attorney meets with a new client, one of the first questions the attorney asks is "What do you own and how
is it titled?" But what exactly does the attorney mean by this question? The most simple way to understand it is to break down how
property is titled into three basic concepts:
Sole ownership - Joint ownership - title by contract
These are the only three ways property can be titled, and yet you may be surprised how many clients estate planning attorneys work
with who don't know exactly how all of their property is titled. Here is a brief overview of each type of property ownership:
=============
Sole Ownership - Sole ownership of property simply means that it is owned by one person in his or her individual name and without
any transfer on death designation. Examples include bank accounts and investments accounts held in one individual's name without
a "payable on death," "transfer on death," or "in trust for" designation, or real estate that is titled in one individual's name in "fee
simple absolute," meaning that the individual owns 100% of the property in his or her sole name without the remainder being
transferred to someone else after the individual's death.
============
Joint Ownership - Joint ownership comes in two forms, with rights of survivorship and without
rights of survivorship.
Joint ownership with rights of survivorship means that two or more individuals own the account or real estate together and after one
owner dies, the remaining owner(s) continue to own the property. “Tenancy by the entirety" is a special type of joint ownership with
rights of survivorship between married couples that is recognized in some states, while "community property" is another special type
of joint ownership between married couples that is recognized in some states.
Joint ownership without rights of survivorship means that two or more individuals own a specific percentage of the account or real
estate, such as one individual owning 80% and a second individual owning 20%. Joint ownership of property without rights of
survivorship is referred to as owning the property as "tenants in common."
===========
Title by Contract - Title by contract refers to property that has a beneficiary named to receive the property after the owner dies,
including bank accounts or investments accounts that have a "payable on death," "transfer on death" or "in trust for" beneficiary
designated; life insurance that has a beneficiary designated; retirement accounts, including IRAs, 401(k)s and annuities that have a
beneficiary designated; life estates that have a remainderman designated; transfer on death or beneficiary deeds that have a
beneficiary designated; and trusts that have a beneficiary designated.
============
Understanding Where Property Will Go After Death
Once you understand the three types of property ownership, you will need to understand who will inherit each type of property after
the owner dies.
In this sense property can be viewed in two ways: probate assets vs. non probate assets.
Probate assets are simply that - assets that will need to go through court-supervised probate after the owner dies. In other words,
after the owner dies, the only way to get the asset out of the deceased owner's name and into the name of the deceased owner's
beneficiaries is to take the asset through probate.
Probate assets include sole ownership property and tenants in common property (or property owned jointly without rights of
survivorship).
Non probate assets are simply that - assets that will not need to go through court-supervised probate after the owner dies. In other
words, after the owner dies, other owners or beneficiaries will take over control of the deceased owner's property simply because
they survived the deceased owner.
Non probate assets include property owned jointly with rights of survivorship (including tenancy by the entirety property and certain
community property) and any type of asset that has a beneficiary named to inherit the asset after the owner dies.
========
Will your loved ones be taken care of after you're gone? If you don't properly plan your estate, it's no sure thing. Learn how to draft a
will, avoid probate, appoint an executor, establish a trust, plan for tax considerations, and other important estate-planning tasks.
Estate and Gift Taxes
It's critical to navigate the tax code when planning an estate. Learn about the taxes that affect every estate, including gift taxes, estate
taxes, generation skipping transfer taxes and income taxes. And find out how to minimize or even eliminate estate taxes if your estate
is taxable.
===========
Understanding Ownership of Property
If you want to know who will inherit your property after you die, then you'll need to understand the different types of property
ownership. From sole ownership to joint tenants and everything in between, each type of ownership will result in different
beneficiaries after death.
===========
What Are Non Probate Assets?
Non Probate Property Avoids Costly Probate..
Non probate assets are a special type of property that won't need to go through the probate process after you die and will instead
pass directly to your heirs.
Owning non probate property is one of the easiest ways to avoid costly and time-consuming probate. Non probate property will
generally be available to your heirs within a short period of time after your death once your heirs receive a death certificate.
=========
A Word of Caution About Non Probate Property
While avoiding probate may on the surface appear be a good result, sometimes non probate property will end up in the hands of
beneficiaries, or worse yet, creditors, you didn't intend to have it.
non probate property should only be used after understanding exactly who will inherit it after you die as well as the legal
consequences of adding owners to accounts or real estate deeds.
In general, there are six different types of non probate assets which are described in detail below.
6 Types of Non Probate Assets
Assets you own in your sole name but have a payable on death (POD), transfer on death (TOD), or in trust for (ITF) designation will
avoid probate after you die. This includes Health Savings Accounts and Transfer on Death or Beneficiary Deeds which are available
in a handful of states. However, if all of the designated beneficiaries predecease the account or property owner, then the account or
real estate will have to go through probate.
=============
Assets you own jointly with your spouse or others, such as a child or sibling, through rights of survivorship (joint tenants with rights
of survivorship, or JTWROS) will avoid probate after you die.
Assets you own with your spouse in a special type of joint ownership recognized in some states called tenants by the entirety (or
TBE) will avoid probate after you die.
Assets owned by your Revocable Living Trust at the time of your death will avoid probate after you die. Assets that aren't owned by
your trust at the time of your death but remain in your individual name without some type of beneficiary designation will not avoid
probate after you die.
Assets in which you retain a life estate and the remainder passes to a non-charitable beneficiary other than yourself, including real
estate owned in certain states by an enhanced life estate deed, will avoid probate after you die.
Assets owned by you through contract rights which are payable to a designated beneficiary after your death, including life insurance
policies, IRAs, 401(k)s and annuities, will avoid probate after you die.
However, if all of the designated beneficiaries of any of these types of assets predecease the account owner, then the asset will need
to go through probate.
============
Advice on Easy Ways to Avoid Probate
How to Avoid Probate - 4 Easy Ways..
In most cases probate is easy to avoid, and yet many people fail to do so. Below you will find a list of the only four ways to avoid
probate. What will work in your situation will depend on how your assets are titled and who you want to inherit your estate after you
die.
=============
#1 - Get Rid of All of Your Property
The most extreme way to avoid the probate of your estate is to get rid of all of your property, because without any property you will
not have an estate that will need to be probated.
Of course, this really isn't practical since you will need money to live on until your death, but in certain cases giving most of your
assets away through the use of a special type of trust of which you can be a beneficiary may make sense. Using this type of trust
combined with one or more of the other techniques described below for any assets that are not transferred into the trust will mean no
probate assets and, therefore, no probate estate.
=============
#2 - Use Joint Ownership With Rights of Survivorship or Tenancy by the Entirety
Adding a joint owner to a bank account or investment account or to the deed for real estate will also avoid probate, provided that it is
clear that the account is owned as joint tenants with rights of survivorship and not as tenants in common. If you are married, then in
certain states you and your spouse can own property with rights of survivorship in the form of tenancy by the entirety.
There are, however, several drawbacks to relying on joint ownership with rights of survivorship or tenancy by the entirety to avoid
probate:
In many cases adding a joint owner to an account or deed will be a taxable gift that needs to be reported to the IRS on a federal gift tax
return (IRS Form 709).
If a joint owner is sued or gets divorced, then a judgment creditor or divorcing spouse may be able to take some or even all of
the assets in the joint account.
If a joint owner dies before you do, then 50% or even 100% of the joint account could be included in the deceased owner's estate for
estate tax purposes.
If you are in a second or later marriage, leaving your property to your spouse by right of survivorship or tenancy by the entirety will
mean that your spouse will be free to do whatever he or she wants with your property after your spouse later dies.
This may not be what you want - in other words, you may want your spouse to have use of your property after you die, but then after
your spouse later dies you may want your property to go to your own children.
In this situation, joint ownership with right of survivorship or tenancy by the entirety will not accomplish your final wishes since your
spouse may freely choose to leave your property to your spouse's children instead of your children or even to a new spouse.
======
#3 - Use Beneficiary Designations
If you own life insurance or assets held in a retirement account such as an IRA, 401(k) or annuity, then you are already taking
advantage of probate avoidance through the use of beneficiary designations. What you may not know is that most states allow you to
designate beneficiaries for your bank accounts (this is referred to as a "payable on death" or "POD" account), and also for your non-
retirement investment accounts (this is referred to as a "transfer on death" or "TOD" account). In addition, a handful of states allow
you designate beneficiaries for your real estate through the use of a transfer on death deed or beneficiary deed or affidavit.
In other states you can use a life estate deed to retain ownership of real estate during your lifetime and then pass the property on to
the beneficiaries of your choice after you die without the need to probate the real estate.
#4 - Use a Revocable Living Trust
A revocable living trust is a written agreement which covers three phases of your life:
While you are alive and well; If you become mentally incapacitated; and After you die.
But signing the revocable living trust agreement by itself is not enough to avoid the probate of your property after you die. Instead,
once the trust agreement is signed, you will need to take your assets and title them in the name of your trust. Only after your revocable
living trust has become the record owner of your assets will the assets owned by the trust (instead of you) avoid probate.
This is called funding the trust, and if you visualize your trust as a bucket, then you need to fill the bucket with your assets in order to
insure that the assets will avoid probate after you die.
If any of your assets sit outside of the trust (bucket) at the time of your death, then the unfunded assets will need to be probated
unless they have a beneficiary designation or are owned with rights of survivorship with someone who survives you.
=============
How Property is Titled Dictates Who Inherits It After You Die
Understanding Ownership of Property - The Real Key to Good Estate Planning..
While in general estate planning can be a complicated process with a multitude of factors to be considered and decisions to be made,
time and time again I find that it all simply boils down to one common denominator - how property is titled. Understanding who owns
what is the one real key to creating a good estate plan, because without property being titled as expected, even the most
sophisticated and well thought-out estate plan will fail miserably.
=============
Understanding Ownership of Property
When an estate planning attorney meets with a new client, one of the first questions the attorney asks is "What do you own and how
is it titled?" But what exactly does the attorney mean by this question? The most simple way to understand it is to break down how
property is titled into three basic concepts:
Sole ownership - Joint ownership - title by contract
These are the only three ways property can be titled, and yet you may be surprised how many clients estate planning attorneys work
with who don't know exactly how all of their property is titled. Here is a brief overview of each type of property ownership:
=============
Sole Ownership - Sole ownership of property simply means that it is owned by one person in his or her individual name and without
any transfer on death designation. Examples include bank accounts and investments accounts held in one individual's name without
a "payable on death," "transfer on death," or "in trust for" designation, or real estate that is titled in one individual's name in "fee
simple absolute," meaning that the individual owns 100% of the property in his or her sole name without the remainder being
transferred to someone else after the individual's death.
============
Joint Ownership - Joint ownership comes in two forms, with rights of survivorship and without
rights of survivorship.
Joint ownership with rights of survivorship means that two or more individuals own the account or real estate together and after one
owner dies, the remaining owner(s) continue to own the property. “Tenancy by the entirety" is a special type of joint ownership with
rights of survivorship between married couples that is recognized in some states, while "community property" is another special type
of joint ownership between married couples that is recognized in some states.
Joint ownership without rights of survivorship means that two or more individuals own a specific percentage of the account or real
estate, such as one individual owning 80% and a second individual owning 20%. Joint ownership of property without rights of
survivorship is referred to as owning the property as "tenants in common."
===========
Title by Contract - Title by contract refers to property that has a beneficiary named to receive the property after the owner dies,
including bank accounts or investments accounts that have a "payable on death," "transfer on death" or "in trust for" beneficiary
designated; life insurance that has a beneficiary designated; retirement accounts, including IRAs, 401(k)s and annuities that have a
beneficiary designated; life estates that have a remainderman designated; transfer on death or beneficiary deeds that have a
beneficiary designated; and trusts that have a beneficiary designated.
============
Understanding Where Property Will Go After Death
Once you understand the three types of property ownership, you will need to understand who will inherit each type of property after
the owner dies.
In this sense property can be viewed in two ways: probate assets vs. non probate assets.
Probate assets are simply that - assets that will need to go through court-supervised probate after the owner dies. In other words,
after the owner dies, the only way to get the asset out of the deceased owner's name and into the name of the deceased owner's
beneficiaries is to take the asset through probate.
Probate assets include sole ownership property and tenants in common property (or property owned jointly without rights of
survivorship).
Non probate assets are simply that - assets that will not need to go through court-supervised probate after the owner dies. In other
words, after the owner dies, other owners or beneficiaries will take over control of the deceased owner's property simply because
they survived the deceased owner.
Non probate assets include property owned jointly with rights of survivorship (including tenancy by the entirety property and certain
community property) and any type of asset that has a beneficiary named to inherit the asset after the owner dies.
========
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'' ' ''Real Estate Investing: Here are more than 15 ways to start investing in real estate to make money...''
------------------
'' Investment Properties Knowledge And Useful Information... Everything To Know About Rental Property For Monthly Cash-flow From A To Z. ...
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''Types of Property Ownership: There are a variety of forms of ownership of
property people need to know about...
---------
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''How to Make Money in Real Estate? Types of Real Estate to Invest in... Real Estate Invesing, Active vs Passive??
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How to Make Money in Real Estate: 10 basic Ways ...
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Determining the cost of and the return on an investment property are just as important as figuring out its value.''
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'' Income Property - Everything People Need To Know About Rental Property. What are the
best ways to make money in real estate? LEARN MORE..
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'' Types of Property Ownership...
There are a variety of forms of ownership of property.----
'' How to Invest In Real Estate without Having to Buy Houses?
-----------
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Owning a home is a pricey endeavor. It requires attention and upkeep simply because things get old a need to be
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It’s often said “You make your money when you buy.” There are many
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// Self-Directed IRA = // // Retirement Planning // Rollover Account // Social Security // Life
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- Personal Finance // = Affirmative Action - // - Terminsurance // = Custodial Account - //
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Inurancequote = //
Personal Finance:
Where are the safe places to
put your money in time of
financial crises, economic
turmoil?
---------------
Finance: Fixed Income
Security Investment: Types Of
Fixed Income Investments..
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Preferred Stocks
vs. Common
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Femkonsa Capital:
Best Index Funds vs Best
ETF"s = Exchange Traded
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Portfolio: Passive
Income - Residual Income -
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101 Ways to Make Money
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Entrepreneur:
Business Ideas And
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Economic: Different
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Freeknowledge:
Things to Know About
Government Bonds &
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-------------
Resource Center:
Different ways to protect your
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What to do when we have a
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Last Will And Testament...
What Not to Include When
Making a Will...
Ways to Avoid Probate...
LEARN MORE HERE...
Where are the safe places to
put your money in time of
financial crises, economic
turmoil?
---------------
Finance: Fixed Income
Security Investment: Types Of
Fixed Income Investments..
---------------
Preferred Stocks
vs. Common
Stocks. = // Types of
Preferred Stocks... Why Do
Companies Issue Preferred
Stock? = LEARN MORE
HERE...
--------------
Femkonsa Capital:
Best Index Funds vs Best
ETF"s = Exchange Traded
Funds.
LEARN MORE HERE...
-------------------
Millionaire
Portfolio: Passive
Income - Residual Income -
Earned Income - Portfolio
Income. HERE ARE MUCH
MORE... = Research &
Learning -/
-----------------
Dividend Stocks: List
Of Dividend Paying
Companies. Quarterly
monthly cash-flow = Return
On Investment... LEARN
MUCH MORE HERE...
-----------------
Knowledge Center:
101 Ways to Make Money
Online We often recommend
earning some extra income
on the side .
---------------
Entrepreneur:
Business Ideas And
Opportunities.
---------------
Economic: Different
Types Of Market To Invest in...
--------------
Freeknowledge:
Things to Know About
Government Bonds &
Municipal Bonds...
-------------
Resource Center:
Different ways to protect your
money…
What to do when we have a
market panic, or economic
uncertainty...
Last Will And Testament...
What Not to Include When
Making a Will...
Ways to Avoid Probate...
LEARN MORE HERE...
=====
How AB Trust Planning Works
Here is how the AB Trust system works to maximize the use of both spouses' estate tax exemptions:
The couple includes the appropriate AB Trust language in their Last Will and Testaments or Revocable Living Trusts. Note that this should not be
attempted without the assistance of a qualified estate planning attorney.
The couple divides their assets so that each spouse has about the same value of assets in his or her individual name or in the name of his or her
Revocable Living Trust. This is an important step and must be done in order for the AB Trust system to work. Many times couples leave their
assets in joint accounts and this completely voids the use of the AB Trust system since the joint assets will pass outright to the surviving spouse
instead of through the deceased spouse's Last Will or Revocable Living Trust.
If the first spouse died in 2013, then the first $5,250,000 would be funded into the B Trust, and if the first spouse died in 2014, then the first
$5,340,000 would be funded into the B Trust. This effectively uses the federal exemption from estate taxes of the first spouse to die. The B Trust
can be relatively flexible and used for the benefit of the surviving spouse and descendants or other beneficiaries.
If the deceased spouse's assets exceed $5,250,000 in 2013 or $5,340,000 in 2014, then the excess is funded into the A Trust. This will defer the
payment of estate taxes on the assets above the deceased spouse's exemption until after the surviving spouse's death. Because of this estate
tax deferment, the A Trust is less flexible and can only be used for the benefit of the surviving spouse. In addition, federal law requires that the
surviving spouse must receive all of the income from the A Trust in order for it to qualify for the unlimited marital deduction.
When the surviving spouse later dies, the surviving spouse will still have his or her own estate tax exemption. If the exemption is $5,340,000
when the surviving spouse dies, then the first $5,340,000 of the surviving spouse's separate assets will pass estate tax free to the final
beneficiaries. Anything over $5,340,000 will be taxed.
The assets remaining in the B Trust pass estate tax free to the final beneficiaries. This is because the B Trust used up the federal estate tax
exemption of the first spouse to die, so anything left in the B Trust will pass estate tax free. This can provide a significant windfall to the final
beneficiaries if the surviving spouse does not need to use the assets from the B Trust and they continue to grow in value during the surviving
spouse's remaining lifetime.
The assets remaining in the A Trust will be taxed as part of the surviving spouse's estate. As mentioned above, the estate tax on the A Trust is
effectively deferred until after the surviving spouse dies.
The balance of the A Trust that remains after the estate tax bill is paid passes to the final beneficiaries. Note that the beneficiaries of the A Trust
and B Trust can be different.
As illustrated above, effective use of the AB Trust system allows married couples to pass on up to $10,680,000 to their final beneficiaries, free
from any federal estate taxes. AB Trust planning also allows married couples to minimize estate taxes while insuring that the their separate
estates will ultimately pass to the beneficiaries of their choice and in the manner of their choice.
How AB Trust Planning Works
Here is how the AB Trust system works to maximize the use of both spouses' estate tax exemptions:
The couple includes the appropriate AB Trust language in their Last Will and Testaments or Revocable Living Trusts. Note that this should not be
attempted without the assistance of a qualified estate planning attorney.
The couple divides their assets so that each spouse has about the same value of assets in his or her individual name or in the name of his or her
Revocable Living Trust. This is an important step and must be done in order for the AB Trust system to work. Many times couples leave their
assets in joint accounts and this completely voids the use of the AB Trust system since the joint assets will pass outright to the surviving spouse
instead of through the deceased spouse's Last Will or Revocable Living Trust.
If the first spouse died in 2013, then the first $5,250,000 would be funded into the B Trust, and if the first spouse died in 2014, then the first
$5,340,000 would be funded into the B Trust. This effectively uses the federal exemption from estate taxes of the first spouse to die. The B Trust
can be relatively flexible and used for the benefit of the surviving spouse and descendants or other beneficiaries.
If the deceased spouse's assets exceed $5,250,000 in 2013 or $5,340,000 in 2014, then the excess is funded into the A Trust. This will defer the
payment of estate taxes on the assets above the deceased spouse's exemption until after the surviving spouse's death. Because of this estate
tax deferment, the A Trust is less flexible and can only be used for the benefit of the surviving spouse. In addition, federal law requires that the
surviving spouse must receive all of the income from the A Trust in order for it to qualify for the unlimited marital deduction.
When the surviving spouse later dies, the surviving spouse will still have his or her own estate tax exemption. If the exemption is $5,340,000
when the surviving spouse dies, then the first $5,340,000 of the surviving spouse's separate assets will pass estate tax free to the final
beneficiaries. Anything over $5,340,000 will be taxed.
The assets remaining in the B Trust pass estate tax free to the final beneficiaries. This is because the B Trust used up the federal estate tax
exemption of the first spouse to die, so anything left in the B Trust will pass estate tax free. This can provide a significant windfall to the final
beneficiaries if the surviving spouse does not need to use the assets from the B Trust and they continue to grow in value during the surviving
spouse's remaining lifetime.
The assets remaining in the A Trust will be taxed as part of the surviving spouse's estate. As mentioned above, the estate tax on the A Trust is
effectively deferred until after the surviving spouse dies.
The balance of the A Trust that remains after the estate tax bill is paid passes to the final beneficiaries. Note that the beneficiaries of the A Trust
and B Trust can be different.
As illustrated above, effective use of the AB Trust system allows married couples to pass on up to $10,680,000 to their final beneficiaries, free
from any federal estate taxes. AB Trust planning also allows married couples to minimize estate taxes while insuring that the their separate
estates will ultimately pass to the beneficiaries of their choice and in the manner of their choice.
Understanding What Happens to Assets That Go Through Probate
So where do probate assets go after the owner dies? This will depend on whether the owner has, or does not have, a last will and testament. If
the owner has a will, then who will inherit the owner's probate assets will be determined by the will. If the owner does not have a will, then who
will inherit the owner's non probate assets will be determined by the intestacy laws of the state where the owner lived at the time of death as
well as the intestacy laws of any other state where the owner owned real estate.
#1 - Get Rid of All of Your Florida Property
If you aren't a Florida resident but own real estate there, then one way to avoid ancillary probate in Florida is to get rid of all of your Florida real
estate, because without owning any property located in Florida, you won't have an estate that will need to be probated in Florida.
Of course, this may not be practical or desirable, but it may make sense for you to gift your Florida real estate to your children or other
beneficiaries in order to both reduce the value of your estate and avoid Florida probate.
======
#2 - Use Joint Ownership With Rights of Survivorship or Tenancy by the Entirety
Adding a joint owner to a bank account or investment account or to the deed for real estate will avoid probate in Florida, provided that it is clear
that the account or real estate is owned as joint tenants with rights of survivorship and not as tenants in common.
If you're married, then in Florida you and your spouse can own bank accounts, investment accounts, tangible personal property and real estate
with rights of survivorship in a special form called tenancy by the entirety.
But beware of relying on joint ownership with rights of survivorship or tenancy by the entirety to avoid probate because there are several
downsides to doing so:
In many cases adding a joint owner to an account or deed will be a taxable gift that needs to be reported to the IRS on a federal gift tax return
(IRS Form 709).
If a joint owner is sued or gets divorced, then a judgment creditor or divorcing spouse may be able to take the assets in the joint account or real
estate that is owned jointly.
If a joint owner dies before you do, then 50% or even 100% of the joint account could be included in the deceased owner's estate for estate tax
purposes.
If you're in a second or later marriage, leaving your property to your spouse by right of survivorship or tenancy by the entirety will mean that
your spouse will be free to do whatever he or she wants with your property after your spouse later dies. This may not be what you want - in other
words, you may want your spouse to have use of your property after you die, but then after your spouse later dies you may want your property to
go to your own children.
In this situation, joint ownership with right of survivorship or tenancy by the entirety will not accomplish your final wishes since your spouse may
freely choose to leave your property to your spouse's children or even to a new spouse instead of your children.
======
#3 - Use Beneficiary Designations or Life Estate Deeds
If you own life insurance or assets held in a retirement account such as an IRA, 401(k) or annuity, then you are already taking advantage of
probate avoidance through the use of beneficiary designations.
What you may not know is that in Florida you are allowed to designate beneficiaries for your bank accounts (this is referred to as a "payable on
death" or "POD" account), and also for your non-retirement investment accounts (this is referred to as a "transfer on death" or "TOD" account).
In addition, in Florida you can use a special type of life estate deed called an enhanced life estate deed, also known as a "Ladybird Deed," to
retain ownership of Florida real estate during your lifetime and then pass the property on to the beneficiaries of your choice after you die
without the need to probate the real estate in Florida.
#4 - Use a Revocable Living Trust
A Revocable Living Trust is a written agreement which covers three phases of your life:
While you're alive and well; If you become mentally incapacitated; and
After you die.
Aside from allowing you to make a plan for what happens if you become incapacitated or after you die, a Revocable Living Trust is also a
powerful estate planning tool that will keep your estate plan private since it will keep your final wishes outside of Florida's public probate court
records.
But signing the Revocable Living Trust agreement by itself isn't enough to avoid the probate of your property in Florida after you die. Instead,
once the trust agreement is signed, you will need to take your assets and title them in the name of your trust - this is referred to as "funding the
trust."
Only after your Revocable Living Trust has become the record owner of your assets will the assets owned by the trust (instead of you) avoid
probate in Florida.
If you visualize your trust as a bucket, then "funding the trust" means that you need to fill the bucket with your assets in order to insure that the
assets will avoid probate after you die.
If any of your assets sit outside of the trust (bucket) at the time of your death, then the unfunded assets will need to be probated in Florida
unless they have a beneficiary designation or are owned with rights of survivorship with someone who survives you.
=============
The Bottom Line on Avoiding Probate in Florida
As you can see, there are only a limited number of ways to avoid probate in Florida. What will actually work the best for you and your family will
depend on your own unique situation and should be discussed with your Florida estate planning attorney.
But regardless of what you choose to do, if you use one or more of the techniques described above to avoid the probate of your property in
Florida, then you will be creating peace of mind for you as well as peace of mind for your loved ones during a difficult time.
=============
Overview of Types of Property Ownership
Property Ownership, Individual Ownership, Joint Ownership and Title by Contract..
.
Individual ownership refers to property that is owned in your sole name without any other owners or a beneficiary designation. After you die,
property owned in your individual name will usually have to go through probate to get it out of your name and into the names of your loved ones.
============
Joint ownership comes in several different forms:
Joint tenancy with right of survivorship - With this type of ownership, all of the owners hold an equal right to the property. In
other words, any owner can withdraw the funds from an account without the knowledge or permission of the other owners. However, with jointly
owned real estate, in most states, the property cannot be sold or mortgaged without the consent of all of the owners.
When one joint owner dies, ownership of the property automatically passes to the surviving joint tenants without the need for probate. In
general, all that the surviving owners will need to do is produce a death certificate or record one in the appropriate land records in order to
confirm their ownership of the property. Abbreviated as JTWROS or JT TEN.
Tenancy by the entirety - This is a type of joint ownership with rights of survivorship that is recognized in some states and can only
exist between a husband and wife. Either spouse can withdraw the funds from an account without the knowledge or permission of the other
spouse.
However, with real estate, in most states, the property cannot be sold or mortgaged without the consent of both spouses. When one spouse
dies, ownership of the property automatically passes to the surviving spouse without the need for probate. In general, all that the surviving
spouse will need to do is produce a death certificate or record one in the appropriate land records in order to confirm their ownership of the
property. Abbreviated as TBE.
==========
Community property - This is a type of joint ownership that is recognized in some states and can only exist between a husband and
wife. Each spouse's ownership rights in community property are set by specific state laws.
===========
Tenancy in common - With this type of joint ownership, each individual "tenant in common" owns a specific percentage of the property and can
withdraw, mortgage, or sell his or her own separate piece of the property. When a tenant in common dies, his or her share of the property
passes to his or her own beneficiaries and not to the surviving tenants in common. Abbreviated as TIC or TEN COM.
==========
Title by contract covers payable on death (POD), transfer on death (TOD) accounts and deeds; in trust for (or ITF) accounts; Totten trusts; life
insurance; retirement accounts including IRAs and 401(k)s; annuities; life estates; and Revocable Living Trusts.
The owner of the property has full control of it during life (with the exception of life estates - check applicable state law), but then after death,
the property passes outside of probate to the beneficiaries designated by the owner.
In general, the beneficiary will need to produce a death certificate or record one in the appropriate land records in order to claim ownership of
the property.
==============
Understanding Federal Estate Taxes
Find out everything you need to know about federal estate taxes, including how they are calculated, what IRS forms are needed, and how to
minimize or even eliminate them.
========
How to Minimize Death Taxes
Spend, Gift, Plan, and Move Your Way to a Lower Death Tax Bill..
While the federal estate tax was originally repealed in 2010, it came back retroactively on January 1, 2010 with a $5,000,000 exemption that was
also in effect in 2011 and then increased to $5,120,000 in 2012.
On January 1, 2013 the estate tax exemption was supposed to decrease to $1,000,000, but on January 2, 2013 President Obama signed the
American Taxpayer Relief Act into law, which has made permanent changes to the federal estate tax laws All You Need to Know About Estate
Taxes For this year and the next year...
===========
Spend assets.
Brand X Pictures/Getty Images
This is the quickest and easiest way to reduce the value of an estate. The obvious problem with this approach is that no one knows how long
they will live and how much money they will need. Thus, drastic spending is only an option for people who have accumulated a significant
amount of wealth and aren't afraid of running out of money before they die.
Gift assets.
This option will only work well for those who feel comfortable giving away part of their estate while they're still alive. As mentioned above, often
times people are resistant to give anything away because they're afraid they'll run out of money before they die and once they decide to give it
away, they can't easily get it back.
As with spending it, gifting directly to family members, friends or charity will only work well for those who aren't afraid of running out of money.
Create a foundational estate plan.
For married couples, including same sex married couples, the use of basic AB Trusts or ABC Trusts in their estate plan can significantly reduce
or even eliminate both federal and state estate taxes assessed against their estates. (Note: Beginning in 2011, the federal estate tax exemption
has been made "portable" between married couples, which has eliminated the need for AB Trust or ABC Trust planning for many couples. See
more on this below in #4 below.)
For both married couples and individuals, the use of an Irrevocable Life Insurance Trust ("ILIT" for short) to hold and own life insurance offers
two benefits:
(1) life insurance owned by an ILIT will remove the value of the insurance proceeds from the insured's taxable estate; and (2) the insurance
proceeds can provide immediate cash to pay bills, expenses and taxes.
----------
4
Get married.
As mentioned above, beginning in 2011 the federal estate tax exemption has been made "portable" between married couples, which now
includes same sex married couples.
This means that if one spouse dies in 2011 or a later year and his or her federal estate tax exemption isn't entirely needed to avoid estate taxes,
then the unused portion can be added to the surviving spouse's exemption.
This, in essence, will allow married couples to pass on up to $10,000,000+ free from federal estate taxes. So, if you're in a committed relationship
but not legally married, then consider marriage as a way to minimize estate taxes. But some couples need to be cautious about eliminating AB
Trust or ABC Trust planning from their estate plans.
For example, if you and your spouse have different final beneficiaries (in other words, you each have your own children or other beneficiaries
who you want to inherit your separate estates), then you and your spouse cannot rely on portability to minimize federal estate taxes in both
estates.
In addition, to date Hawaii is the only state that collects a state estate tax that has adopted portability and it will go into effect in Maryland in 2019,
so AB Trust or ABC Trust planning may still be required to plan for state estate taxes in some states.
-----
5
Use advanced estate planning techniques.
There are a variety of advanced planning options that are designed to reduce estate taxes and yet allow you to maintain an income stream for
life, which should alleviate the fear of running out of money before you die. Gifting through a Family Limited Liability Company offers both estate
tax reduction and asset protection.
Married couples can take advantage of annual exclusion gifts and their lifetime gift tax exemptions by creating Spousal Lifetime Access Trusts,
or "SLATs," for the benefit of each other. Creating a charitable trust, such as a Charitable Remainder Trust, gives you a charitable income tax
deduction when the trust is funded and gives your estate a charitable estate tax deduction after you die.
A Qualified Personal Residence Trust allows you to live in your home for a period of years and then the home will pass to your heirs at a reduced
value for estate and gift tax purposes after the period ends.
==========
What is an AB Trust?
Tax Planning for Married Couples
Married couples can maximize the use of both of their federal exemptions from estate taxes by using AB Trusts as part of their estate plan. The
AB Trust system can be set up under the couples' Last Will and Testaments or Revocable Living Trusts. The "A Trust" is also commonly referred
to as the "Marital Trust," "QTIP Trust," or "Marital Deduction Trust." The "B Trust" is also commonly referred to as the "Bypass Trust," "Credit
Shelter Trust," or "Family Trust."
AB Trusts and Portability of the Estate Tax Exemption
Note that beginning in 2011, the federal estate tax exemption was made transferable between married couples. This is referred to as "
portability of the estate tax exemption" and means that if one spouse dies in 2011 or later and his or her entire federal estate tax exemption is
not needed to avoid estate taxes, then the unused portion of the deceased spouse's estate tax exemption can be added to the surviving
spouse's estate tax exemption. This, in essence, means that in 2014 a married couple will be able to pass on up to $10,680,000 to their heirs free
from federal estate taxes without the need to use AB Trust planning.
So has portability of the estate tax exemption led to the extinction of AB Trusts? Not exactly. If the spouses have different sets of final
beneficiaries, such as in the case of a second or later marriage where each spouse has their own children that they want to inherit their
separate assets after both spouses are deceased, then the couple will want to make use of AB Trust planning in order to ensure that their
separate beneficiaries will be their ultimate beneficiaries.
In addition, since currently Hawaii is the only state among the states that collect an estate tax that has made its state estate tax exemption
portable between married couples, AB Trust or ABC Trust planning may be required in these states in order to take advantage of both spouses'
state estate tax exemptions.
Finally, the federal generation-skipping transfer tax exemption is not portable, so couples who want to double the use of their GST exemptions
will need to use AB Trust or ABC Trust planning to do so.
============
Tax Planning for Married Couples
Married couples can maximize the use of both of their federal exemptions from estate taxes by using AB Trusts as part of their estate plan. The
AB Trust system can be set up under the couples' Last Will and Testaments or Revocable Living Trusts. The "A Trust" is also commonly referred
to as the "Marital Trust," "QTIP Trust," or "Marital Deduction Trust." The "B Trust" is also commonly referred to as the "Bypass Trust," "Credit
Shelter Trust," or "Family Trust."
AB Trusts and Portability of the Estate Tax Exemption
Note that beginning in 2011, the federal estate tax exemption was made transferable between married couples. This is referred to as "
portability of the estate tax exemption" and means that if one spouse dies in 2011 or later and his or her entire federal estate tax exemption is
not needed to avoid estate taxes, then the unused portion of the deceased spouse's estate tax exemption can be added to the surviving
spouse's estate tax exemption. This, in essence, means that in 2014 a married couple will be able to pass on up to $10,680,000 to their heirs free
from federal estate taxes without the need to use AB Trust planning.
So has portability of the estate tax exemption led to the extinction of AB Trusts? Not exactly. If the spouses have different sets of final
beneficiaries, such as in the case of a second or later marriage where each spouse has their own children that they want to inherit their
separate assets after both spouses are deceased, then the couple will want to make use of AB Trust planning in order to ensure that their
separate beneficiaries will be their ultimate beneficiaries.
In addition, since currently Hawaii is the only state among the states that collect an estate tax that has made its state estate tax exemption
portable between married couples, AB Trust or ABC Trust planning may be required in these states in order to take advantage of both spouses'
state estate tax exemptions.
Finally, the federal generation-skipping transfer tax exemption is not portable, so couples who want to double the use of their GST exemptions
will need to use AB Trust or ABC Trust planning to do so.
============
Personal Finance: Where are the safe places to put your money in time of financial crises, economic turmoil?
---------------
Finance: Fixed Income Security Investment: Types Of Fixed Income Investments..
---------------
Preferred Stocks vs. Common Stocks. = // Types of Preferred Stocks... Why Do Companies Issue
Preferred Stock? = LEARN MORE HERE...
--------------
How the Fed Keeps Track of Our Money Supply? // INVESTMENT'S SECRETS REVEALED, THE
ABC's OF INVESTMENTS...
------------------
Femkonsa Capital: Best Index Funds vs Best ETF"s = Exchange Traded Funds.
LEARN MORE HERE...
-------------------
Millionaire Portfolio: Passive Income - Residual Income - Earned Income - Portfolio Income. HERE ARE
MUCH MORE... = Research & Learning -/
-----------------
Dividend Stocks: List Of Dividend Paying Companies. Quarterly monthly cash-flow = Return On Investment...
LEARN MUCH MORE HERE...
-----------------
Knowledge Center: 101 Ways to Make Money Online We often recommend earning some extra income on the
side .
---------------
Entrepreneur: Business Ideas And Opportunities.
---------------
Economic: Different Types Of Market To Invest in...
--------------
Freeknowledge: Things to Know About Government Bonds & Municipal Bonds...
-------------
Resource Center: Different ways to protect your money…
What to do when we have a market panic, or economic uncertainty...
Last Will And Testament...
What Not to Include When Making a Will...
Ways to Avoid Probate... LEARN MORE HERE...
---------------
Finance: Fixed Income Security Investment: Types Of Fixed Income Investments..
---------------
Preferred Stocks vs. Common Stocks. = // Types of Preferred Stocks... Why Do Companies Issue
Preferred Stock? = LEARN MORE HERE...
--------------
How the Fed Keeps Track of Our Money Supply? // INVESTMENT'S SECRETS REVEALED, THE
ABC's OF INVESTMENTS...
------------------
Femkonsa Capital: Best Index Funds vs Best ETF"s = Exchange Traded Funds.
LEARN MORE HERE...
-------------------
Millionaire Portfolio: Passive Income - Residual Income - Earned Income - Portfolio Income. HERE ARE
MUCH MORE... = Research & Learning -/
-----------------
Dividend Stocks: List Of Dividend Paying Companies. Quarterly monthly cash-flow = Return On Investment...
LEARN MUCH MORE HERE...
-----------------
Knowledge Center: 101 Ways to Make Money Online We often recommend earning some extra income on the
side .
---------------
Entrepreneur: Business Ideas And Opportunities.
---------------
Economic: Different Types Of Market To Invest in...
--------------
Freeknowledge: Things to Know About Government Bonds & Municipal Bonds...
-------------
Resource Center: Different ways to protect your money…
What to do when we have a market panic, or economic uncertainty...
Last Will And Testament...
What Not to Include When Making a Will...
Ways to Avoid Probate... LEARN MORE HERE...