Are Trusts Only for the Rich?

If you are beginning to devise your estate plan, you may assume that you should use a last will as a primary vehicle of asset transfer because you are not wealthy. Some people are under the impression that trusts are only useful for high net worth individuals. Some people who have been very successful from a financial standpoint are exposed to the federal estate tax. To be exposed, your assets must exceed $5.43 million in 2015. Individuals who are in this position do in fact use trusts to gain estate tax efficiency. However, there are trusts that can be useful for people who are not extraordinarily wealthy. Let s look at the facts. Revocable Living Trusts The trusts that are commonly used by wealthy people to gain estate tax efficiency are irrevocable trusts. You cannot revoke or dissolve this type of trust, so you cannot change your mind and take back the assets. As a result, you are surrendering incidents of ownership, and assets in the trust would not be part of your taxable estate


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