Family Living Trust

Only within the last ten to fifteen years have families become aware of the many advantages afforded to them by not so recent legislation passed through the US Congress. Until that point, there were too many families living in the United States who like lemmings, worked hard all their lives, paid their taxes and having been spared to enjoy a few short years of rest passed on to the next life, knowing that their estate would be ravaged by the need for their loved ones to pay inheritance tax. And this after all their affairs would be debated over in public through the courts, and lawyers would feed off the spoils of the largely antiquated law of probate.

What they have discovered is that all this is indeed unnecessary and outmoded, and by establishing a family living trust can be avoided with the minimum of effort and expense. The living trust concept is there to provide a vehicle to protect and manage the trustee's property during their lifetime. If established and administered properly, then it will leave these assets intact within the family, to be dispersed and retained as they see fit, and not after 30 to 40% of the value of the estate has been eroded by taxation and court costs.

So what does a family need to do to set up a living trust? As the advantages of establishing a family living trust has become more widely known, then the ability to create a trust has become simpler and certainly less expensive. There are many legal firms who specialize in the field, and as a result of increased competition, prices have fallen considerably. Lawyers, experienced in all aspect of tax laws, will draw up the living trust fund documentation, requiring only a complete and accurate list of all the assets to be included in it. The simplest living trust usually contains very few items, usually the family home, such stocks and shares that are long term investments and items of appreciating value, such as antiques or jewellry.

If budgets are tight, or the trustee is aware that his assets are fairly straightforward and not of particularly high value, then they may decide to purchase one of the several family living trust fund kits to prepare their own trust. This can be really inexpensive, and the only direct legal fees will be to hire a notary public to register the trust deed. For those who are either weak in computer knowledge or are unsure of what and where to fill in the details, then these legal software suppliers usually provide a help desk including software experts or virtual lawyers to make the task as simple and pleasant as follows.

Once the family living trust has been established, notarized and recorded, then they next stage should be to hold quarterly or bi-annually meetings to discuss the state of the family living trust. Theoretically speaking, as the trustor usually acts as his own trustee, it is possible that he can hold the meeting with himself. However in most cases it means the family sitting down together, updating any details and chatting up the state of the trust assets. Most married couples act as joint trustors. They usually also protect their assets further through the establishment of a marital life estate trust. The logic behind this trust to protect the surviving spouse when one of them passes on. Through this variation on a family living trust, the surviving trustor is allowed to take full advantage of the estate's assets. In the event that the surviving spouse chooses to remain the trustee, they can also decide to include the proceeds of any life insurance pay outs into the fund.

The establishment of a family living trust is one of the finest examples of how prudent and objective estate planning, can act only to the benefit of the family.

Till now the retention of the family home and valuable memorabilia within the family was a privilege of the wealthy. Now it is available to us all.