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Tisser's Top Ten Living Trust Tips

  1. Living Trusts do NOT avoid probate unless assets are held in the name of the trust.
  2. Having a Living Trust does NOT mean you have a completed estate plan.
  3. Having a Living Trust does NOT mean there will be no estate taxes when you die.
  4. When a person with a Living Trust dies, there IS trust administration to be done and your family should seek the advice of an experienced estate attorney.
  5. If you and your spouse have an A-B or QTIP trust and one of you dies, THE TRUST MUST BE DIVIDED INTO MULTIPLE TRUSTS, some of those trusts will have to get federal taxpayer identification numbers (similar to social security numbers) and file tax returns, and the survivor will have to open separate bank accounts for each trust.
  6. The failure to properly divide the trusts can WIPE OUT ALL THE TAX PLANNING that was done when the original trust was established.
  7. If a Living Trust is divided into several trusts, it IS necessary to divide the assets among the trusts.
  8. After allocating assets to the various trusts, it is necessary to TRACK THE TRUST ASSETS ON AN ANNUAL BASIS to make sure that they continue to be held in the proper trusts.
  9. Depending on how your trust was set up, you may not only be required to GIVE YOUR CHILDREN A COPY OF THE TRUST after your spouse dies, you may be required to GIVE YOUR CHILDREN ANNUAL ACCOUNTINGS of what is in each trust, what was earned, how much was spent, and what is left.
  10. You must continue to MEET WITH YOUR ESTATE ATTORNEY AND OTHER ADVISORS ON A REGULAR BASIS, even after the trust division has been completed, to make sure that changes in the law, as well as existing circumstances, do not require changes in the way you are administering the trust.