Living Trusts, 3rd Edition

Living Trusts Third Edition......Page 3
About the Website......Page 5
About the Author......Page 7
Contents......Page 9
Preface......Page 13
Acknowledgments......Page 15
Abbreviations, Acronyms, and Synonyms......Page 17
Part I The Revocable Living Trust in Perspective......Page 19
Transfer Tax System......Page 21
Impact of Tax Legislation......Page 27
The Economic Growth and Tax Relief Reconciliation Act of 2001......Page 30
Repeal of Stepped-Up Basis......Page 32
Other Changes Under the 2001 Act and Sunset Provision......Page 34
Continuing Need for Estate Planning......Page 35
Understanding the Five Estates in Estate Planning......Page 38
Effective Estate Planning Defined......Page 44
Misconceptions about Estate Planning......Page 46
Common Mistakes Made in Estate Planning......Page 47
Requirements to Create a Living Trust......Page 51
Components of a Revocable Living Trust......Page 52
Determining the Trustee of a Revocable Living Trust......Page 72
Is Recording a Revocable Living Trust Necessary?......Page 86
Express Trustee Powers......Page 88
Trustee Duties and Responsibilities......Page 102
Financial Guardianship Unnecessary......Page 108
Probate Unnecessary......Page 112
Record of Property Ownership......Page 121
Disinheriting a Family Member......Page 123
Nontax Disadvantages......Page 125
Alleged Tax Disadvantages......Page 133
Limitations of a Revocable Living Trust......Page 147
Part II Operation of a Revocable Living Trust and the Impact of Taxes......Page 151
Lifetime Creation of a Revocable Living Trust......Page 153
Title to Property Vested in Trustee......Page 160
Types of Revocable Living Trusts......Page 161
Revocation, Termination, and Amendment of a Revocable Living Trust......Page 166
Day-to-Day Handling of the Trust Estate......Page 171
Cost of Creating and Operating a Revocable Living Trust......Page 173
Trustee Liability......Page 180
Grantor Trust Rules......Page 182
Basis and Holding Period of Trust Property......Page 184
Professional Fees and Administration Expenses......Page 190
Sale of Trust Property between Trustor and Trustee......Page 191
Installment Sales and Installment Obligations......Page 192
Sale of Trustor’s Principal Residence......Page 193
United States Savings Bonds......Page 200
Qualified Replacement Property......Page 201
Tax Returns and Reporting Methods......Page 202
Obtaining a Taxpayer Identification Number......Page 207
Tax Year......Page 208
State Taxes......Page 209
Federal Estate Tax......Page 210
Federal Estate Tax and the Revocable Living Trust......Page 217
Person Responsible for Payment of Federal Estate Tax......Page 218
State Death and Inheritance Taxes......Page 220
Federal Gift Tax......Page 222
State Gift Tax......Page 228
Generation-Skipping Transfer Tax......Page 229
Part III Lifetime Funding of a Revocable Living Trust......Page 231
Funding Process......Page 233
Property Transfer Process......Page 235
Removing and Replacing Trust Estate Property......Page 239
Preserving the Character of Property Ownership......Page 243
Title to Real Property Conveyed to Trustee by Deed......Page 247
Real Property Subject to Indebtedness......Page 255
Federal Tax Issues......Page 258
Special Kinds of Real Property......Page 263
Other Real Property Interests......Page 270
Stocks......Page 273
Bonds......Page 276
Restricted Securities......Page 277
Mutual Fund Accounts......Page 278
Investment Limited Partnerships......Page 279
U.S. Government Obligations......Page 281
Trustor’s Business Interests......Page 285
Sole Proprietor......Page 289
Corporations......Page 292
S Corporations......Page 294
Professional Corporations......Page 302
Partnerships......Page 304
Special Tax Benefits for Closely-Held Businesses......Page 306
Day-to-Day Operation......Page 314
Retitling Accounts......Page 317
Communicating with Bank Employees......Page 319
Credit Unions......Page 323
Federal Deposit Insurance Corporation Coverage for Accounts in Revocable Living Trusts......Page 324
Deposits to Existing Accounts......Page 332
Classification of Tangible Personal Property......Page 333
Title to Tangible Personal Property......Page 334
Untitled Tangible Personal Property......Page 339
Titled Intangible Personal Property......Page 340
Untitled Intangible Personal Property......Page 342
Miscellaneous Intangible Personal Property......Page 343
Safe Deposit Box......Page 344
Qualified Retirement Plans......Page 346
Trustee as Owner of Qualified Retirement Plans......Page 347
Trustee as Beneficiary of Qualified Retirement Plans......Page 348
Employee Dies before Commencement of Distributions......Page 351
Employee Dies after Commencement of Distributions......Page 352
Tax-Free Rollover of Decedent Trustor’s Qualified Plan Benefit by Surviving Spouse......Page 357
Trustee as Intermediary Payee of Qualified Retirement Plan......Page 361
Railroad Retirement......Page 364
Other Retirement Plans......Page 365
Nonqualified Retirement Plans......Page 367
Life Insurance......Page 374
Annuities......Page 382
Part IV Supporting Documents......Page 395
Coordinating a Durable Power of Attorney with a Revocable Living Trust......Page 397
Pour-Over Will......Page 401
Bibliography......Page 409
Index......Page 417