Trust Planning for the Middle Class

1. Estate Taxes Inflation has turned the tax problems of the wealthy into the tax problems of the middle class. A living trust, if properly drawn, will allow a married couple to pass $1,200,000 before the estate tax kicks in. Charitable remainder trusts can be used in larger estates to provide additional savings on estate and income taxes.
2. Probate avoidance Probate is expensive and it is time consuming. In Florida you can not probate a will with an out-of-state executor unless it's a blood relative. This is a full employment law meant to protect banks, trust companies, and lawyers. The statutory executor fee for a $2 million estate is $55,000, and that is in addition to court costs and legal fees.
3. Privacy Everything that happens in probate is a matter of public record. This is not true of the actions of the trustee of a living trust. Real estate deeds are open to public inspection at anytime. However, trust documents that spell out the real owner of property held in a trust are private.
4. Protection from Dispute It is a lot harder for a disgruntled heir to upset your estate planning. For example, Florida has rules that prevent the disinheritance of a spouse in a will. Many times in a second marriage it is the desire of the parent to protect his or her children from the first marriage. This is a situation where you can use a trust to make sure that your property passes to the people that you want it to, without interference from the state statute.
5. Remove Life Insurance from Your Estate A irrevocable life insurance trust can be used to avoid estate taxes on life insurance, if your estate is larger than $1,200,000 for a couple or $600,000 for a single person.