Do I Need a Revocable Living Trust? | Mark J Kohler

Hi, Mark Kohler here with another tax and legal tip. I want to talk about four triggering events that might indicate you need to get a trust, a revocable living trust, a family trust, as part of your estate plan rather than just relying on a basic will. Number one, children under the age of 18 or children that act like they're under the age of 18. Now, it could also be children with special needs and you need to leave them, your estate in a constructive manner with special rules. Now, with all these four reasons, I'm going to assume that you do have some sort of estate. Maybe it's life insurance or retirement account, a lot of equity in your home or some investment real estate. But you don't want to just flop this money into your kids lap and create a problem where maybe it just ruins their life more than helps them. This is a good reason to have a trust because the trust can put all sorts of rules and provisions in there. They get a chunk of money at age 25, another chunk at age 30, another chunk at age 35. Maybe money to buy a home or start a business or attend college. But anyway, you can put all this into a trust. And if you have a will, it's much more difficult, it's clunky, it makes a much more elaborate and complex will where a trust can do it much more effectively. So number one, trigger an event. You have kids and you want to leave really specific rules. I think a trust is a must. Number two, you own real estate. Now, when you own real estate and you pass away, you can trigger what's called probate. Probate is the court action where a judge gets involved and has to find out what your will really said. Is it really your will? Or if you die without a will, it triggers what's called intestate probate. And that can be a very costly experience and time consuming for your heirs and family. So if you own real estate, even your primary residence, you want to have a trust, your real estate, own your home or maybe Even own your LLCs to own your rental properties so that if something happens to you, your trustee can step in and handle all of your real estate without having to go to court. Now some people say, well, I'll just have my spouse on the title with me and if I die, my spouse will get it or I'll put my kids on title and then they'll get it. Well, putting people on title to your real estate can be very scary if they have their own legal problems. And what happens if you and your spouse both pass away? What's going to happen to your real estate probate? So if you own real estate, do yourself, do your family a favor with all that work you put into it to prevent more lawyers getting at the money or the government, get a trust and avoid probate. Number three, medical concerns or needs for yourself. And what I mean by this is you might be getting a little older in age or you might be having some medical situations or health concerns and having a trust and all of your assets placed in that trust can make it easy for your loved ones to manage that trust for you while you're still alive, but maybe unable to manage your affairs. It usually includes a durable power of attorney, a springing durable power of attorney that gives someone authority, a backup trustee to run your affairs if you have a medical situation where you're not able to manage your financial affairs. So that's a good reason for a trust and a trustee that you trust to run your affairs. And that's another important reason to consider a trust when you might anticipate something like that happening. Number four, you're wealthy. That could trigger the need for a trust. And I'm talking about you being worth more than $5 million. That could be equity in real estate, equity in your home life insurance policies or in retirement accounts all combined. What happens when you pass away is the IRS takes a picture. How much are you worth on paper minus your debts? Well, if that amount is over five to six million dollars, you've got to have a trust to avoid estate tax. Now if Donald Trump and Congress get together and repeal estate tax, great. But until then, we want to do some more advanced planning. Now if you're married, this involves what is called a B trust. A B trust, and they've been around for years and years and they allow you to maximize your estate credit of this five to $6 million times two. But if you're single or you're worth more than 10 to $11 million in married, you've got to think of some other strategies as well. So this is much more advanced planning. But it starts with an AB trust if you're married, or some additional planning within a basic revocable living trust if you're single. Now those my friends, are the four main reasons why you might need a revocable living trust as part of it more well designed and a little more complex estate plan rather than just knocking something out with a will. So talk to your lawyer. If you need some help, you can always call our law firm. We'd love to be of service, but get some planning done. This is something that is really going to leave much more organized situation for your family. And if you're working so hard to build up those assets, make sure you have a constructive way of passing them on to your family or charity or whatever is important to you. Thanks for watching and if you love that video, I've got a lot more. Please subscribe to my channel and I shoot weekly videos that can help you in your business, personal life and better live your American dream. Also check out my newsletter free newsletter every week with blog articles, tips, strategies, tax deadlines. You'd love it. 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