THE BEST ESTATE PLAN Sept. 2019

More Reasons to Give Your Family an RLT Package.

As I said in my last WealthWISe, estate planning is not just for the rich. Estate planning is for those who are rich in love for their family. My favorite estate planning approach is an RLT package. It contains a revocable living trust (RLT), power of attorney, backup will and advance care plan. As Trustee, you manage the RLT on your behalf as long as you are able.

Your surviving family members will be grateful for the RLT package. For example, a widow recently met with me to find out how to deal with her deceased husband’s trust. She had once been an executor. She was so pleased with the ease of the RLT that she bought one for her daughter and son-in-law. She exclaimed that she was not going to end up as executor for either of them!

In the last WealthWISe I gave five great reasons to give your family an RLT Package. Here you will find more, such as better management, simple taxation, asset protection, and privacy. Interested?

  • The RLT package is easy to change. The RLT is called “revocable” because you can easily change or revoke it, in writing, signed and notarized writing. So you can test drive your trust and change it as you go.
  • The RLT package offers superior management of your property. After your death or incapacity, your chosen successor trustee manages the trust according to your trust agreement. Your trust agreement instructs the Trustee to manage your estate pretty much in any way that you want. You can tell the Trustee how and when to use income and principal for the beneficiaries. For example, the trustee can provide needed funds for a minor child each year that then and then distribute his share to him at one or more ages of your choice. You can offer incentives to a student who meets certain standards.
  • After you pass away, the RLT package protects trust asses from beneficiaries’ creditors. My RLT’s contain a “spendthrift provision” that protects a beneficiary’s share from his creditors, even from a divorcing spouse!
  • The RLT package does not affect your income taxes during your life. The RLT is generally neutral, tax wise. It uses your social. security number so that during your lifetime, you pay taxes on Trust income and the Trust need not file a tax return or get a separate tax identification number. After your death the trust does pay taxes until it is terminated.
  • The RLT package offers superior privacy. If you don’t have a RLT controlling all your assets, your family will probably end up in the Probate Court to manage your estate. Your will is filed at the Courthouse, where the whole world can see it. On the other hand an RLT is a private contract. In fact, Tennessee law allows me to draft a trust agreement that is kept secret, even from the family.
  • There are many more good reasons for using an RLT Package. It is generally easier to use.

About Wis Laughlin

I help clients with tax preparation and IRS representation, estate planning, and complex contracts, including LLC's. As a former IRS tax attorney in their National Office. Law.com picked Wis in 2017 and several prior years as one of the Top Tax and Estate Lawyers in Tennessee. I am your advocate, not your accountant. I don't tell you what you can't do. I show you how to do it.
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