Trusts may be particularly appropriate for widows or widowers, if you own real property in another state, in second marriage situations, and when a couple s assets exceeds the federal estate tax exemption. I have been invited to a seminar on living trusts. You may learn something, and the coffee and cookies are usually free. Living trusts in their present form have been in existence for at least 60 years. In recent years they have become the hot new commodity to solve the estate problems of a generally unsuspecting public.
Trusts solve some problems and create others.
Do not let anyone tell you differently. If you need a trust it should be prepared specifically for you after a number of conferences with your attorney who should go over with you and explain each and every provision in the trust and related documents. Unless your estate exceeds the federal estate tax exemption, there will be no federal or estate taxes on your estate. Your personal representative or successor trustee is of course responsible for paying income taxes on your income earned during the last year of your life. If your estate exceeds the federal estate tax exemption, your estate may have both federal and state taxes to pay and these taxes can be quite confiscatory.