Planning Your Future - Part 3 | Tax Tip of the Week | No. 206

You Really Need to Plan for This - Part 3

 Our death and possibility of developing an incapacitating illness are not pleasant things to think about.  But planning for them, however, must be addressed.This is part three of a four part series of Tax Tips that will highlight some of the primary legal steps you should consider. NOTE: We are NOT attorneys.  Please consult with an attorney before following any of these suggestionsRevocable Living TrustA revocable living trust is strongly recommended for everyone. It is much more flexible than a durable power of attorney.If you suffer from a disability or become incapacitated, upon the recommendation of one or two physicians your successor trustee will be empowered to manage your assets.With no revocable living trust, a family member may instead be required to obtain permission from the probate court to create a conservatorship. This will require expensive and repeated visits to the court for approval of expenditures, sale of most real property and other actions. It will greatly increase the expense and the difficulties for the person who is acting as your conservator.A successor trustee under a revocable living trust is far more flexible and less expensive. Compared with a conservatorship, the cost of creating the revocable living trust may be recovered in the first few months of the time when you need someone else to manage your property.Revocable living trusts are a legal agreement. You specify the management powers of the trustee, the general provisions for distribution of income and principal and select your successor trustee. Ordinarily, you will serve as the initial trustee. If you are incapacitated, the successor trustee will take over and manage the property. Your property will be legally transferred with a deed for real property and by creating trust accounts for mutual funds, securities and cash. It is essential to make sure that title to the selected property is properly transferred under state law rules to you as trustee of the living trust.We will conclude this series next week.

As always, give us a call with any questions or concerns you may have.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt - the guy behind TTW...until next week.