The Complete Living Trusts Program

by Martin M. Shenkman

• ISBN13: 9780471361053
• ISBN10: 0471361054
• Format: Paperback
• Copyright: 2000-03-01
• Publisher: Wiley

Summary

* Avoid probate * Manage and protect assets through disability * Eliminate the need for a court-appointed guardian * Avoid living trusts hype AVOID THE BALONEY, PUFFERY, AND SNAKE OIL OR HOW TO BEST UTILIZE LIVING TRUSTS FOR YOURSELF AND YOUR HEIRS A properly arranged living trust can be an invaluable estate and financial planning tool that ultimately insures your assets will reach heirs as quickly and cost effectively as possible. Unfortunately, this is more difficult to accomplish than it should be. The misinformation surrounding living trusts is staggering. Many trusts are poorly written, shamefully mismanaged, and improperly used. But even when correctly planned, a living trust is not necessary or beneficial for everyone. How do you decide if it's the right thing for you? And how do you do it right? Get informed. In this comprehensive book, attorney Martin M. Shenkman guides you through the confusion to gain an understanding of the process that will help you avoid pitfalls, taxes, liability manipulation, and wasted money. Here are steps to: * Minimize probate abuse * Minimize living trust abuse * Protect yourself from the legal and financial ravages of disability * Distinguish the hucksters from the real expert advisers * Use a living trust as part of a complete estate plan to reach all your personal goals * Avoid the need for a court-appointed guardian * Save taxes * Decipher documents . . . and much more. Using sample checklists, and numerous real-life examples, Shenkman provides a balanced view of living trusts that will clarify what you do and don't need.

Author Biography

MARTIN M. SHENKMAN CPA, MBA, JD, is a practicing attorney specializing in tax laws and investments. He is frequently quoted in the New York Times, the Wall Street Journal, and the Bottom Line. He lives in New Jersey, and is also the author of twenty-five books.</P>

Table of Contents

PART ONE INTRODUCTION
What is the Complete Living Trusts Program?	3	(22)
Skip the Puffery and Snake Oil	3	(4)
Why I Have a Living Trust	7	(2)
The Complete Living Trusts Program	9	(1)
Why Set Up a Revocable Living Trust?	10	(1)
What Is a Revocable Living Trust?	10	(1)
Requirements for a Valid Trust	11	(3)
Five Phases of Living Trusts	14	(4)
Six Stages in the Life of Your Living Trust: How a Living Trust Works	18	(4)
Building Blocks of the Complete Living Trusts Program Over Time	22	(1)
Summary	22	(3)
Pros and Cons of Revocable Living Trusts	25	(20)
The Problem with the ``Pros and Cons'' of Living Trusts	25	(1)
Arguments against Using Revocable Living Trusts	25	(12)
Benefits of Using a Revocable Living Trust	37	(6)
Summary	43	(2)
Probate Avoidance Without Living Trusts	45	(18)
Other Methods to Avoid Probate	45	(1)
Importance of How Assets Are Owned (Titled) and Beneficiary Designations	45	(1)
Jointly Held Property	45	(5)
Community Property Consideration	50	(1)
Tenancy by the Entirely	51	(1)
Tenancy in Common	52	(1)
Not All Joint Ownership Avoids Probate	52	(1)
Beneficiary Designations for Bank Accounts	53	(3)
Beneficiary Designations on Life Insurance Policies	56	(2)
U.S. Savings Bonds	58	(1)
Determining How Your Assets Should Be Owned	58	(2)
Summary	60	(3)
PART TWO FOUNDATION LIVING TRUST
Organize Your Finances to Plan and Implement Your Living Trust	63	(6)
You Need a Financial Snapshot to Choose the Living Trust Appropriate for You	63	(2)
Simplify and Consolidate Your Assets to Assure the Success of Your Living Trust	65	(1)
Simplifying Finances Protects Your during Disability	66	(1)
Be Careful of Costs and Issues Created by Consolidation	67	(1)
Don't Consolidate Everything	67	(1)
How to Organize and Manage Your Financial Affairs	67	(1)
Summary	68	(1)
Drafting the Foundation Living Trust	69	(6)
Ask the Important ``What If'' Questions	69	(3)
Should the Grantor Be the Sole Initial Trustee?	72	(1)
Summary	73	(2)
Operating Your Foundation Living Trust	75	(14)
Should You Fund Your Revocable Living Trust?	75	(2)
General Instructions for Funding and Implementing Your Foundation Living Trust	77	(7)
Your Foundation Living Trust while You Are Alive and Well	84	(2)
Your Foundation Living Trust on Your Disability	86	(2)
Your Foundation Living Trust Following Your Death	88	(1)
Summary	88	(1)
Additional Documents Essential to Every Plan	89	(16)
Relationship of Your Living Trust to Your Will, Power, and Living Will	89	(1)
Use Revocable Living Trusts as Part of an Overall Estate Plan	89	(3)
Safe-Keeper Pour-Over Will	92	(2)
Durable Power of Attorney	94	(3)
Living Will and Health Care Proxy	97	(3)
Letter of Instruction	100	(1)
Child Emergency Medical Form	101	(1)
Summary	101	(4)
PART THREE TAX PLANNING AND YOUR COMPLETE LIVING TRUSTS PROGRAM
The Just-in-Case (Disclaimer) Living Trust	105	(6)
What Is the Just-in-Case Living Trust?	105	(1)
What Is the Applicable Exclusion Amount?	106	(1)
How the Disclaimer Bypass Trust Works	106	(2)
Salvaging the Planning if Your Living Trust Didn't Include a Disclaimer of Regular Bypass Trust	108	(1)
Summary	109	(2)
The Family Tax Planning Living Trust	111	(10)
Integrating Basic Estate Tax Planning into Your Family Tax Planning Living Trust	111	(1)
The Basics of Estate Tax Planning	111	(2)
Family Tax Planning for Married Couples	113	(1)
Marital Trust Planning	113	(1)
General Tax Rules Governing Bequests to Your Spouse	114	(1)
Outright (i.e., No Trust) Gift or Bequest	114	(1)
QTIP Marital Trust	115	(1)
Marital Deduction for Spouse Who Is Not a Citizen	115	(1)
Planning for Married Couples When One Spouse Owns Most Assets	116	(2)
Tax Considerations for Nonmarried Taxpayers	118	(1)
Summary	119	(2)
Operating Your Family Tax Planning Living Trust	121	(8)
Your Must Monitor Your Family Tax Planning Living Trust While You Are Alive	121	(2)
Your Family Tax Planning Living Trust Following Death	123	(3)
Summary	126	(3)
Insurance and Children's Trusts Supplement Your Family Tax Planning Living Trust	129	(16)
Why Additional Trusts May Be Needed to Supplement Your Family Tax Planning Living Trust	129	(1)
Insurance Trusts	129	(7)
Children and Minors' Trusts	136	(6)
Summary	142	(3)
PART FOUR THE MULTIGENERATIONAL (GST) LIVING TRUST
The Generation-Skipping Transfer (GST) Tax	145	(10)
What Consider Multigenerational Tax Planning?	145	(4)
What Is the Generation-Skipping Transfer Tax and Why Did Congress Enact It?	149	(1)
How the GST Tax Works	149	(2)
How to Plan to Minimize the GST Tax Impact on Your Trust	151	(3)
Summary	154	(1)
Drafting the Multigenerational Living Trust	155	(6)
Why You Need Special Drafting for a Multigenerational Living Trust	155	(1)
Recital/Whereas Clauses	155	(1)
Spendthrift Provision	156	(1)
Change in Situs	156	(1)
Fiduciaries Other Than Trustees	156	(1)
Perpetuities	157	(1)
Beneficiaries' use of Assets	157	(1)
Beneficiaries	158	(1)
Distribution Provisions	158	(1)
Trust Termination	158	(1)
Trustee Selection	159	(1)
Governing Law	159	(1)
Provisions Establishing and Maintaining Nexus	160	(1)
Accounting and Tax Preparation	160	(1)
Summary	160	(1)
Operating Your Multigenerational Living Trust	161	(6)
You Must Monitor Your Multigenerational Living Trust While You Are Alive	161	(1)
Transferring Assets to Your Multigenerational Living Trust	162	(1)
Maintaining Perpetuities Benefits	162	(1)
Your Multigenerational Living Trust Following Death	163	(1)
Summary	163	(4)
PART FIVE THE COMPREHENSIVE LIVING TRUST PROGRAM
What Is the Comprehensive Living Trust Program?	167	(4)
Importance of Comprehensive Living Trust	167	(1)
Concepts Common to Your Comprehensive Living Trust Plan	167	(2)
Summary	169	(2)
Drafting the Comprehensive Living Trust	171	(6)
General Drafting Issues Affecting the Comprehensive Living Trust	171	(1)
Business Powers	171	(1)
S Corporations	172	(3)
Environmental Issues	175	(1)
Spendthrift Provision	175	(1)
Comprehensive Powers to Deal with Unique Assets	176	(1)
Selection of Skilled Trustees	176	(1)
Summary	176	(1)
Integrating Additional Sophisticated Tax Planning and Asset Protection Techniques Into Your Comprehensive Living Trust Program	177	(14)
Why Sophisticated Tax Planning Techniques and Asset Protection Techniques Are Discussed in the Same Chapter	177	(1)
Domestic Asset Protection Trusts	177	(2)
Charitable Lead Trusts	179	(2)
Charitable Remainder Trusts	181	(2)
Grantor Retained Annuity Trusts and Unitrusts	183	(2)
GRATS/GRUTS and Your Multigenerational Living Trust Plan	185	(1)
Sales to Defective Grantor Trusts (``Intentionally Defective Trusts'')	185	(1)
Family Limited Partnerships and Limited Liability Companies	186	(2)
Discounts	188	(1)
Qualified Personal Residence Trusts	189	(1)
Summary	190	(1)
Operating Your Comprehensive Living Trust Program	191	(8)
Your Comprehensive Living Trust Program Presents Special Operational Issues	191	(1)
Ancillary Entities Formed as Part of Your Comprehensive Living Trust Program	191	(1)
Ongoing Steps to Maintain Your Comprehensive Living Trust Program	192	(3)
Summary	195	(4)
PART SIX ADDITIONAL ISSUES
Living Trusts for Special Circumstances and Assets	199	(6)
Senior Citizens	199	(1)
People with Limited Safety Net of Reliable Others	199	(1)
Gays and Lesbians	200	(1)
If You Want to Minimize Publicity	201	(1)
Avoiding Ancillary Probate	201	(1)
Real Estate Assets	201	(1)
S Corporation Stock	201	(1)
Installment Notes	202	(1)
Retirement Assets	202	(1)
Life Insurance	203	(1)
Summary	203	(2)
Additional Tax Issues	205	(6)
Tax Issues and Living Trusts Generally	205	(1)
Income Tax Reporting for Your Living Trust	205	(1)
Tax Allocation Clause	205	(2)
Gift Giving and Your Living Trust	207	(1)
Treating Your Living Trust as Part of Your Estate	208	(1)
Can Living Trusts Be Used for a Special Increase in Tax Basis?	209	(1)
Miscellaneous Tax Issues Affecting Living Trusts	210	(1)
Summary	210	(1)
Additional Legal Issues	211	(12)
What Level of Competency is Required for a Grantor to Form a Revocable Living Trust?	211	(1)
Spousal Right of Election	212	(3)
Investment Decisions and the Prudent Investor Rule	215	(4)
Community Property	219	(2)
Summary	221	(2)
Index	223