NO. The purpose of creating a Living Trust is to avoid living probate, death probate, and reduce or even eliminate federal estate taxes. It's not a vehicle for reducing income taxes. In fact, if you're the trustee of your Living Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.

No. The income of the "living trust" will be taxable to the grantor as if the trust did not exist for income tax purposes. Also, if the grantor is not the trustee nor a co-trustee, then the "living trust" must obtain a separate taxpayer identification number and thereafter file annual tax returns. See similar questions...

No. As a citizen of the United States, you must report all of your income regardless of where in the world the income originated and also pay federal income tax on your income in accordance with the U.S. tax laws. While there are some tax-planning opportunities to reduce or eliminate certain taxes, all of these plans are legal and are provided for in the tax laws and regulations. See similar questions...

This is a discussion that could take days and still not answer everybody's questions as a whole. Individual tax situations vary from TRUST to TRUST just as they do from one person to another. Pure Trust Organizations (properly established and properly administrated) have no tax reporting requirements. See similar questions...

A simple probate-avoidance living trust has no effect on taxes. More complicated living trusts, however, can greatly reduce the federal estate tax bill for people who own a lot of valuable assets. The AB trust is a tax-saving living trust designed primarily for married couples with children (it can also be called a "credit shelter trust," "exemption trust," "marital life estate trust," or "marital bypass trust. See similar questions...

If your estate is subject to death tax (whether federal and/or state), the trust can save substantial taxes for a married couple (this savings is obtained by being able to use the exemption amount at each death instead of just at the death of the surviving spouse -- see the next FAQ). See similar questions...

Absolutely. A living trust can save substantial amounts of estate taxes if the trust is specifically drafted for that purpose. If the net value of your estate is more than $650,000 at your death, a federal estate tax return must be filed. The starting rate of estate tax is 37%. But, if you are married, and if you have assets valued of $1.2 million or more, an "A-B" living trust can save your beneficiaries over $200,000 in estate taxes and several thousand dollars in probate costs. See similar questions...

A properly drafted revocable Living Trust does not change your income tax liability. The Internal Revenue Service does not require any additional income tax filings when you create a Revocable Living Trust; you continue to file the same annual 1040 tax return that you file now. See similar questions...

A "Living Trust" is usually a Will substitute. The Trust avoids the delay and expense of probating a Will. Your estate remains confidential, rather than being a public Probate Court record. Tax saving provisions are often included. A "Living Trust" is like having your own corporation. You put all of your assets ? family home, bank accounts, etc. ? into the Trust (the "corporation"). You name yourself as "Trustee" (the "President"). See similar questions...

When you establish your trust, you become the Grantor (sometimes called the Trustor or Settlor) the person who creates the trust and whose property is put into the trust. If you are married and create the trust with your spouse, you both become Co-Grantors (unless you each become Grantors of your own separate trusts). Only the Grantor(s) can make changes to the terms of the trust - that is how you keep control. The person who administers the trust is the Trustee. See similar questions...

the end of the tax year, we will send you a Form 5498-SA summarizing all of your contributions, and a Form 1099-SA which reports the total distributions taken from your account for the year. We will send these forms to the IRS as well. You should attach these forms to your tax return and submit both when you file. (Please consult with your tax advisor and/or accountant before you file with the IRS.) See similar questions...

No. It is a common misconception that estate tax savings can be achieved with a "living trust" but not with a will. While use of a "living trust" will avoid probate proceedings, avoiding probate does not mean avoiding estate taxes. The assets in a "living trust" are part of a person's gross estate for estate tax purposes just the same as probate assets. See similar questions...

A-B trusts are a type of Living Trust set up by someone who is married (in California, typically one trust for both spouses) and is designed to reduce or eliminate the Federal Estate (Death) Tax that would normally be incurred upon the death of the second spouse to die. Keep in mind that everything has disadvantages, including A-B Trusts. Initial cost, complexity, and maintenance costs after the first spouse dies are some of these. See similar questions...

You, as trustor (the maker of the trust), would create and execute a trust document and transfer your assets to yourself as the trustee of your trust. In your trust documents you would name yourself as the immediate beneficiary of the trust. You would identify a subsequent or successor trustee to manage your assets upon your incapacity or death. See similar questions...

If you are acting as trustee of your own living trust and become incapacitated, whoever you have named as your successor trustee will assume the responsibility for managing your assets on your behalf. If your assets are not in your living trust, someone else must manage them. How this is accomplished may depend on whether the assets are your separate or community property. See similar questions...

Assets held in your living trust at your death can be managed by the trustee of your living trust and distributed in accordance with your directions in the trust. The trustee is also accountable to your beneficiaries for the trust assets held for their benefit after your death. The trust is not under the direct management of the probate court at and after your death and, therefore, the value and the nature of your assets and the identity of your beneficiaries do not become a public record. See similar questions...

The person you appoint to handle the trust after your death - the successor trustee - simply transfers ownership to the beneficiaries you named in the trust. Much of the time, this can be accomplished in a few weeks. When all of the property has been transferred to the beneficiaries, the living trust ceases to exist. See similar questions...

Yes. In most cases a homeowner who has put his or her home in a living trust can usually take out a reverse mortgage. A review of the trust documents would be made by the reverse mortgage lender to determine if anything in the living trust would be unacceptable. See similar questions...