Selling Or Giving Away Living Trust Property

Once a living trust has been established it still offers an extremely high level of flexibility to the trustors who, in most cases, also act as trustees.

The most popular form of a living trust is known as a revocable living trust, which can develop into being a very fluid entity. This is in line with the development of the trustor in life as his personal circumstances and the value of their personal assets change accordingly.

As the trustor's estate develops it may rapidly reach the situation where they will be liable to pay estate taxes in the event of their passing. It doesn't take too much in today's fast paced society for the trustor to break through the top surface of the estate tax ceiling, and to have accumulated sufficient assets that they will have to pay estate tax on them at a rate that can reach as high as 59%.

Anyone who is capable of acquiring assets to such an extent in this life will be capable of putting up a very fair fight to retain them on behalf of his heirs and beneficiaries in the next one. There are many ways of avoiding this, all of them legal and they without exception involve selling and especially giving away living trust property. These are obviously sensitive issues involving large sums of money, and should only be carried out under the advice of am estate planner of the highest caliber. The costs involved will be considerable, but will pale into insignificance when compared to what the taxman will take from the estate if the hatches are battened down exceedingly tight.

On a more day to day basis, one of the more popular methods of reducing or re-distributing estate value is through marital transfers.

Under current legislation neither lifetime gifts nor bequests at death to one's spouse are subject to estate taxes. However, the estate of the surviving spouse may be eligible to pay estate taxes. Unless refined, this method merely defers estate taxes and it does not entirely eliminate them. However if the couple form a A-B lifetime trust, the estates value is divided equally and portioned into two separate entities. Once one of the trustors passes away, their portion goes towards creating an irrevocable lifetime trust that cannot be subject to estate tax.

By proper estate planning, each trustor of the estate can make unlimited annual gifts of up to $11,000 per person. This usually means either children or grandchildren. The sum of $11,000 is the maximum allowable without incurring a gift tax. They can also pass on the same sums to children under the age of eighteen. However these gifts have to be held by a legal custodian become of legal age to accept them.

If there two trustors then they can each gift this sum, and gradually decrease the value of the estate, keeping it constantly below the top estate tax ceiling.

These are just a few examples of what innovative estate planning can do to enable people to enjoy and control their property while they are alive.

Under the terms of a revocable living trust, the trustees can theoretically sell and gift as much and as many of the assets of the trust as they wish. Prudent use and constant monitoring of the trust should be maintained at all times, in order to keep the fund in an ideal situation for the inevitable time when the trustors will pass on.