Is Your Financial House Built on a Solid Foundation?

By David Kauwe, CLU, ChFC, LUTCF, RFC 
Associate with Consultus, LLC

A Solid Foundation is Necessary to Insure the Stability of Any Structure.

Many Folks are Looking to a Revocable Living Trust to Help Built that Strong, Solid Foundation for Your Financial House.  Here’s Why:

1.       First of all, any asset that is placed into the Living Trust is not subject to the probate process.  The average cost to probate an estate across the US is 5% of the Gross Estate.  The Gross Estate means the Current Market Value of the asset without subtracting out any loans owed on the asset. 
2.       By avoiding Probate you eliminate the average time it takes to go through the process which is 12-18 months. 
3.       By avoiding Probate you also keep your estate private as a Living Trust is not a matter of public record unlike a Will.
4.    A Living Trust avoids the need for a conservator appointed in a “Living Probate” situation in the event of a mental or physical incapacitation.  This allows a spouse with one signature to carry on the affairs of the couple when one becomes incapacitated due to illness or injury. 
5.  A Living Trust allows any appreciable asset to receive a “Stepped-Up Basis when it is passed to the beneficiaries.  This means there is less capital gains to have to pay taxes on.  
6.   A Living Trust allows for greater control on when assets are distributed to heirs. 
7.   A Living Trust allows for protection for children from previous marriages to receive their inheritance and not be unknowingly disinherited.   
8.   Properly structured a Living Trust with a Credit Shelter Provision will allow both spouses to take advantage of the Federal Unified Credit Exemption of $5,430,000 saving Millions in Estate Taxes. 
9.   By using a QTIP - Qualified Terminable Interest Property provision in your Living Trust, you will also be allowed to defer any Estate Taxes that would have been due on the amount over the Unified Credit of $5,430,000 for the deceased spouse until the death of the second  spouse.

In Building Your Financial House Think About Using a Revocable Living Trust to Start as the Foundation.  You Can Co-Ordinate Other Types of Trusts Easily with a Living Trust.  Irrevocable Life Insurance Trusts, Charitable Remainder Trusts, Generation Skipping Trusts and So on!

Don’t Be Foolish With Your Foundation!  Make it Solid as a Rock with a Revocable Living Trust.

David A. Kauwe, CLU, ChFC, LUTCF, RFC is an Associate with Consultus LLC, a Financial and Estate Planning Firm located in Durham, NC. dave@hawaiiandaves.com or at (919) 698-8832 cell.