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How to do Living Trust Planning When you are considering living trust as the main estate planning document, you should consider living trust planning if the total values of the estate you and your spouse own is greater than 3.5 million dollars. The 3.5 million dollar figure is usually the value the federal government will allow you to be able to pass to your heirs without having to assess the amount of your estate tax. To be able to know if this will affect you; you should add the value of your real and personal property plus your financial assets, retirement assets and the death benefits from the life insurance. In the event that the value you have surpasses the 3.5 million dollars then it is critical to consider to have a credit sheltered trust otherwise called bypass trust to be incorporated into your document with the goal of reducing your estate taxes. Many married couples will usually use wills as ways in which they will leave properties to each other, in this plan the first to die will not use the their estate tax exemption and they will therefore lose it, this process is very expensive and it takes a long time. Having living trust you will have the ability to use the estate tax exemption and you will have the ability to avoid probate, if for example if you and your spouse have 7 million dollars one half in each of your trust, and you die, you can leave your better half 3.5 million dollars in a credit trust which will be without estate taxes. Your significant other will now have 3.5 million dollars in her trust and the other 3.5 million dollars in your credit sheltered trust.
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The spouse that is surviving is typically the essential recipient to the credit sheltered trust and it will likewise be named as trustee. The remainder of the life of the surviving spouse, the income as well as the principal of the trust can be used by them for the care of their health, education maintenance as well as support. When the surviving spouse dies then the assets can now go to the children and it will not be included in the estate of the surviving spouse, the entire 7 million dollars will pass to the family without the estate taxes and this is a good tax planning strategy.
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On the off chance that this procedure is not utilized 1.5 million dollars will be the estate tax that will be charged upon the demise of the second spouse. The bypass trust can likewise offer protection from claims made by creditors and it will guarantee that the property will stay in the family and if the surviving spouse remarries then they won’t have the capacity to give the property to the new spouse.


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