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A New Year, a New….Trust?

Happy New Year! As the calendar turns to January, many of us reassess things. From earning a work promotion to finally using that gym membership, resolutions abound. Consider adding this resolution for 2017: sit down with a knowledgeable Norman, Oklahoma estate planning attorney and discuss a revocable living trust. Here are a few reasons why a trust makes sense for your estate planning:

  1. Probate Avoidance – Do you want private details about your finances to become public knowledge? Are you okay with your loved ones waiting months or years for their inheritances? I assume your answer to those questions is no. A revocable living trust is the best way to avoid probate and make certain that your estate is administered in a timely, efficient manner.
  2. Incapacity Planning – With the incidence of Alzheimer’s expected to triple by 2050, incapacity planning has taken on much greater importance. If you lose the ability to handle your affairs, who will manage your bank accounts, IRAs, life insurance policies and other assets? By appointing a successor trustee, you can ensure that the right person makes these key decisions in the event you cannot do so. An added bonus: third parties (i.e. banks and financial institutions) are generally more amenable to dealing with a successor trustee than they are an agent under a durable power of attorney.
  3. Tax Planning – The American Taxpayer Relief Act of 2012 (ATRA) significantly changed our nation’s tax laws, raising the exemption from federal estate taxes to over $5 million for individuals and in excess of $10 million for married couples. As a result, revocable living trusts created before ATRA may be overly cumbersome or even obsolete. Moreover, with Republicans now controlling both the White House and Congress, a full repeal of the estate tax is likely. Given this new reality, updating your revocable living trust is a smart move.
  4. Controlling Distributions – Let’s face it: we love our families, but nobody is perfect. Most of the time my clients want to leave their estates outright to the beneficiaries. That is, until I explain the possible consequences of doing so. Take, for example, a disabled person. This person may depend on Social Security Disability Insurance, Medicaid or other government programs to help provide for their care. Unbeknownst to many, receiving an inheritance (even a small one) can disqualify the disabled person from getting benefits under these programs. In other cases, the intended beneficiaries may simply not be in a position to deal with the money because they are a minor, are financially irresponsible or have tax or creditor problems. One can structure a revocable living trust so that the assets for such beneficiaries continue to be held in trust and do not negatively impact the beneficiary.

Probate avoidance, disability planning, tax planning and controlling distributions are great reasons to create a revocable living trust. I am a client-centered, affordable Norman, Oklahoma estate planning attorney who will review all of your options and devise an overall estate plan that meets your specific needs. I wish everyone a happy and prosperous 2017!