An estate tax is the amount of taxes owed to the federal government upon your death. Your family’s tax liability will depend on two things:
What Is A Trust?
A Trust is essentially an agreement, or legal arrangement between the settlor or grantor, and the trustee. The settlor, also known as a grantor, agrees to transfer certain assets to the trustee and the trustee agrees to hold those assets for the benefit of named beneficiaries. In the past, trusts were used almost exclusively by wealthy families as a way to guard their assets from public scrutiny and also ensure that their assets were protected. Nowadays, people from many different income brackets are taking advantage of the benefits offered by a properly planned trust.
A living trust can be an important estate planning tool, but it is also a very precise one. This means that if one or more crucial components are missing from your living trust package, your financial goals will not be adequately met. Just what are these crucial components? Read on to find out.
1. Keep your will or trust up to date.
Many state laws invalidate any will made prior to a major life event, such as marriage, divorce, moving to a new state, or the birth or adoption of a child. Keep your legal residence address, marriage status, beneficiaries list, etc. updated.