15.12 Living Trust

• Library: A Lawyer's Guide to Estate Planning: Fundamentals for the Legal Practitioner (ABA) (2018 Ed.)

15.12 Living Trust

Much is written about living trusts. Their advantage may be overestimated, but in many cases they are appropriate. The primary advantages of a living trust are privacy, avoidance of probate, and simplifying estate settlement, particularly when the estate consists of numerous stocks, bonds, mutual funds, and other similar investments. The form that follows is a simple living trust designed for estates under the applicable exemption amount. Because some assets will still pass by will, a simple pour-over will should be used. The wills at 15.3 and 15.7 can be used for this purpose. For larger estates—those that require the A-B or disclaimer planning approach because the estate exceeds the combined exclusion amount—the form at 15.3 or 15.4 should be used. By transferring assets into the trust during one's lifetime, the advantages of a living trust are obtained.

LIVING TRUST

THIS TRUST AGREEMENT is entered into by JOHN A. ROE, of Madisonville, Kentucky, as both Settlor and Trustee.

? Comment: This trust does not make use of marital deduction or portability planning. If the couple's estate approaches the combined federal estate tax exclusion amount, it is more appropriate to use the A-B trust or disclaimer trust approach to lessen federal estate taxes. See the trust at 15.3 and 15.4.

WITNESSETH:

I have delivered or will deliver to the Trustee the property described in Schedule A. Upon receipt of this property, the Trustee agrees to hold it in trust and to manage and dispose of it according to the provisions of this Trust Agreement.

ARTICLE I

A. During my lifetime, the Trustee shall pay to me and my wife, Jane D. Roe, or pay for our benefit, as much of the net income and principal from the trust as I shall request. If I make no request, due to disability or otherwise...