A

AARP, 12,13,61

A-B living trust

• explanation of, 76-91
• providing for surviving spouse with, 80
• keeping control with, 80
• dividing assets, 82, 201, 202
• common vs. separate, 76, 83, 88, 90
• if spouse is incapacitated, 85
• Medicaid and, 86
• if spouse is not U.S. citizen, 87
• if you are not married, 87
• if prepared before 2012, 87, 191
• at death of first spouse, 196, 199-204

A-B trust in a will, 85

A-B-C living trust

• explanation of, 92-97
• additional control with, 92
• delaying estate taxes with, 94
• providing for surviving spouse with, 94
• dividing assets, 95, 201-204
• at death of first spouse, 196, 199-204

Accumulation trust, 178

Adjusted gross income (AGI), 158, 222, 236-238

Affordable Care Act of 2010, 236

Alaska, 26, 84, 250, 254

American Taxpayer Relief Act of 2012, 69, 236

Annual personal exemptions, 221

Annual tax-free gifts, 71, 232-233

Appreciation, planning for, 70

Asset protection planning, 165, 248-250

Assignment, 152

Automobiles, 165

Attorney

• fees in probate, 13, 14
• benefits of using an experienced, 134
• how to find the right, 135
• how to evaluate, 138
• meeting with to prepare trust, 143
• assistance with funding, 152, 154

ATM withdrawals, 58

B

Bacall, Lauren, 128

Bankruptcy protection, 57

Bar associations, 136, 137

Basis

• explanation of, 27, 199, 212
• stepped-up, 27, 84, 153, 154, 199, 211, 235

Beneficiaries

• explanation of, 36
• controlling when they inherit, 43, 116
• who can be, 36, 111
• determining amount of inheritance, 116
• distribution options for, 44, 117
• irresponsible, 119
• protecting assets from creditors of, 41, 118, 120
• with special needs, 121-124
• charities as, 36, 129, 239-243

Beneficiary designations

• problems with, 29
• why change to living trust, 41
• time required to change, 53
• for IRA and other tax deferred plans, 42, 173-182

Boats, 165

Bonds, 163, 164

Boston Globe, 254

Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE), 172

Bush, George W., 68

Business succession planning, 130, 246

Bypass trust, 76

C

Calendar year vs. fiscal year, 220

California, 13, 26, 42, 156, 236

Capital gains tax, 27-28, 66, 135, 199, 235, 237

• on sale of personal residence, 157

CERCLA, 59

Certificate of trust, 147, 160, 163

Certificates of Deposit, 70, 160

Certified copy of trust, 147

Changing titles (see “Funding”)

Charitable foundation, 179, 240

Charitable lead trust, 239

Charitable remainder trust, 179, 239

Charitable “set aside,” 221

Charities

• as beneficiaries, 36, 129, 239-243
• qualifying a, 243

Checking accounts, 159

Children’s trust

• in a will, 22, 39
• in a living trust, 38
• Club memberships, 169

Common trust, 76-77, 83, 88

Community property

• listing of states, 26
• retaining status in living trust, 153
• Conduit trust, 178

Conservation rights, 242

Conservatorship, 18

Contesting, 16, 45, 129

Copyrights, 169

Corporate trustee

• explanation of, 35, 105
• when to use, 101, 103-107, 120, 123
• benefits of, 47, 107
• safety of trust assets with, 108
• fees, 53, 108
• disadvantages of, 109
• how to evaluate, 109

Corporation

• closely held, 167
• professional, 184
• subchapter S, 167
• C, 168

Co-trustee

• explanation of, 35
• advantages of having a, 101
• corporate trustee as, 108

Court control

• when you die, 8
• if you become incapacitated, 17
• of minor children, 20

Credit cards, 158

Credit shelter trust, 76

Credit union accounts, 161

Creditor claims, 41, 50, 56-57, 118, 120, 157, 248

Crummey letter, 232

Custodian, 20

Custodial account, 20

D

DBA, 167

Death of first spouse, 196-204

Delaware, 245, 250, 254

Disclaiming, 201

Disinheriting

• unintentional, 24, 45
• intentional, 124

Distribution of assets, 43-45, 116-121, 213-214

Divorced or separated parents, 21, 113

Do-it-yourself (DIY) planning, 133, 134

Donor advised fund, 241

Due on sale or transfer clause, 155

Durable power of attorney for asset management,

• 19, 142, 146, 194, 207, 227

Durable power of attorney for health care, 142,

• 149, 193, 206, 227

Dynasty trust, 253

E

Estate

• explanation of, 7
• as beneficiary, 29
• determining your taxable, 70
• appreciation of, 70

Estate planning, 7, 227

Estate taxes

• explanation of, 66, 67
• when due, 67
• amount exempt from, 67
• history of, 68
• credit, 76

Estimated tax payments, 226

Executor

• explanation of, 8
• fees paid to, 12. 13
• duties of, 10, 36, 210
• at incapacity, 17

F

401(k), 42, 173

403(b), 173

Family limited partnership, 244

Family succession planning, 131

Fannie Mae, 155

FDIC insurance, 160

Federal Reserve Bank, 164

Fiduciary responsibilities, 38, 205

Florida, 13, 42, 57, 165, 254

Foreign assets, 169

Freddie Mac, 155

Funding, 151-184

G

Gain on sale of depreciable assets, 225

Gallenstein, 154

General partnership, 169

Generation skipping transfer tax, 116, 177, 251

Gift annuity, 242

Gifts

• problems with, 27
• taxable, 71, 232-235
• annual tax-free, 71, 232-233
• to reduce estate taxes, 72, 232-236
• taxation of, 232
• living trust and, 112, 129, 235

Ginnie Mae, 155

Grandchildren, 21, 116

Grantor

• explanation of, 35
• keeping control as, 35

Grantor retained annuity trust (GRAT), 245

Grantor retained unitrust (GRUT), 245

Guardian

• for minor children, 20
• choosing one, 113

Guardianship, 18, 20

Gun trust, 171-173

Guns, 170-173

H

Health care proxy, 149

HIPPA release authorization, 142, 150

Home (transferring to trust), 154-158

Homestead (homeowner’s) exemption, 57, 157

Homeowner’s insurance, 156

I

Idaho, 254

Incapacity

• and a will, 17
• who determines, 18, 38
• court control at, 17
• what happens at, 17
• with a living trust, 36, 192, 206

Incentive stock options, 182

Income taxes

• while you are living, 50, 65-66, 236
• after death issues, 60, 217-226
• for trusts and estates, 218, 236
• planning for, 236-238

Independent administration, 12

Inherited IRA available to creditors, 176

Insurance (also see “Life Insurance”)

• Employer-provided, 167
• Homeowner’s, 156
• Liability, 156
• Title, 156

Irrevocable trusts, 32, 178, 227, 231, 239, 245, 249,

• 253, 256

IRA, 42, 66, 173-182

• spouse as beneficiary, 174
• children, others as beneficiary, 176
• trust as beneficiary, 177
• charity as beneficiary, 179
• some or all as beneficiary, 179

J

Jackson, Michael, 146

Joint Ownership

• and probate, 24
• problems with, 24-27, 44, 45
• kinds of, 26
• unintentional disinheriting with, 24, 45
• incapacity of joint owner, 25

K

Kennedy, John F., 15

Kasem, Casey, 148

Keogh, 42, 173

L

Land trust, 250

Legacy planning, 131

Liability insurance, 156

Life estate, 242

Life expectancy, 175-182

Life insurance

• beneficiary of, 29, 41, 44, 45, 166
• to pay estate taxes, 73
• owner of, 166
• as part of taxable estate, 70-71, 231
• transferring to trust, 166
• irrevocable life insurance trust, 71, 231
• uses in estate planning, 228
• how much you need, 229
• kinds of, 229
• planning with, 230
• as charitable gift, 243

Limited liability company, 168, 244

Limited partnership, 168, 244

Living trust

• explanation of, 31
• avoiding probate with, 32-33
• preventing court control of assets at incapacity
• with, 32-33
• keeping control with, 33, 35-39, 49
• history of, 33
• how it works, 35
• process at death with, 36, 42, 196, 210
• process at incapacity with, 36, 43, 192, 206
• process if minor children with, 38-39, 43
• process to set up, 40, 133, 143-145
• change beneficiary designations to, 41, 159-
• 162, 165, 166-167, 174-182
• benefits of, 42-49
• time required to distribute assets with, 42
• privacy with, 42
• avoiding multiple probates with, 43
• more fair distributions with, 44
• preventing unintentional disinheriting with, 45
• contesting with, 45, 129
• as pre-nuptial protection, 46
• tax identification number for, 46, 203, 214
• professional asset management with, 47, 105-
• 110
• reducing estate taxes with, 47, 77
• maximum control with, 49
• peace of mind with, 49, 185, 216
• what it does not do, 49-51
• protection from creditors with, 41, 50, 57, 118-
• 120, 157
• Medicaid and, 50, 86, 121, 123
• “disadvantages” of, 51-60
• expense of, 53
• management fees with, 53, 102, 108
• reasons for probate with, 55-57, 59
• Congress eliminating, 60
• time required to change titles to, 53, 152-153
• refinancing real estate with, 54, 155
• time creditors have to submit claims with, 56
• why not used more in the past, 61
• why so popular now, 62
• seminars, 136
• avoiding scams and rip offs, 137
• putting assets into (funding), 40, 53, 134, 142,
• 145, 151-184
• where to keep documents, 186
• when and how to change, 46, 190-192
• making gifts from, 235
• when to set up, 273

Living will, 49, 142, 148-149, 193, 206

Long term care insurance, 51, 193, 206

M

Marital deduction, 73, 79, 88, 90, 92, 93

Marital trust, 76

Marx, Groucho, 18

Maryland, 254

Medicaid, 28, 50, 86, 121, 123

Medical power of attorney, 149

Medicare surtaxes, 236-238

Mineral rights (to charity), 242

Minor children (also see “children’s trust”)

• court control of inheritance, 20
• court appointment of guardian, 20
• as beneficiaries, 29, 41
• living trusts and, 38, 43
• planning for, 113-116

Missouri, 57, 83

Missouri Bar Association, 83

Mutual funds, 163

N

National Firearms Act, 171-172

Net estate, 67, 70-72

Nevada, 245, 250, 254

New York, 13, 238

Notice of trust, 42

O

Obama, President, 68

Ohio, 254

Oil and gas interests, 169

Onassis, Jacqueline Kennedy, 15, 240

Organizing information for your family, 186-190

P

Passive losses on rental real estate, 157, 222

Patents, 169

Partnerships

• general, 169
• limited, 168
• family limited, 244

Payable-on-death accounts, 159

Pennsylvania, 156

Pension plans, 42, 173

Per capita, 125-127

Per stirpes, 125-127

Personal (untitled) property

• transferring to trust, 166
• as charitable gift, 242

Personal residence trust, 245

Pets, 128

Pooled income fund, 241

Portability, 74, 86

Pour over will, 142, 145

Power of attorney, 19

Pre-nuptial protection, 46

Prepaid legal services plans, 137

Private foundation, 179, 240

Probate

• explanation of, 8
• why we go through, 9
• what assets go through, 9, 55
• what happens in, 9-12
• small estates and, 12
• informal, 12
• expense of, 12-14, 52, 53
• time involved with, 14
• lack of privacy with, 14-16
• loss of control with, 16
• multiple, 14, 43
• court supervision with, 54
• as big business, 12, 61

Professional corporation, 184

Profit sharing plans, 173-182

Property taxes, 57, 156

Q

Qualified domestic trust, 87, 254

Qualified personal residence trust, 245

Qualified subchapter S trust (QSST), 168

Qualified terminable interest property (QTIP), 95

Quinlan, Karen Ann, 148

R

Real estate

• contaminated, 59, 158
• rental, 157, 222
• how to transfer to trust, 154
• refinancing, 54, 155
• out of state, 14, 43, 154

Recognition of losses, 224

Required beginning date, 173, 180

Required minimum distribution, 173-182

Rockefellers, 251

Rollover, 175-182

Roth IRA, 181

Royalties, 169

Rule against perpetuities, 253

S

Safe deposit box, 162

Saving accounts, 159

Savings bonds, 164

Schiavo, Terri, 148

Section 1244 stock, 183

Separate trusts, 76, 77, 83, 90

Sixty-five day rule, 223

Sole proprietorship, 167

South Dakota, 245, 254

Special gifts, 112, 201, 214

Special needs trust 121-124

Spendthrift clause, 120

Spousal consent form, 180

Spouse’s responsibilities at incapacity/death,

• 192-204

Stand alone retirement trust, 178

State death/inheritance tax, 66, 67, 135

Stepped-up basis, 28, 66, 84, 98, 153, 154, 198-199,

• 211, 235

Stocks, 70, 163

Stretch out (tax-deferred accounts), 173-182

Subchapter S corporation, 167

Successor trustee

• explanation of, 36
• as fiduciary, 38
• responsibilities of, 36-38, 102, 205, 206-213
• who can be, 103
• adult children as, 103
• choosing yours, 102-104
• corporate trustee as, 103-110

Survivor’s trust, 76

Surviving spouse

• providing for, 80
• instructions for, 196-205

T

Tax identification number, 46, 50, 203, 214

Tax-deferred annuities, 182

Tax-deferred savings plans, 42, 66, 173-182

Tax Policy Center, 69

Taxpayer Relief Act of 1997, 60, 157, 217, 219,

• 224, 225

Tenants-by-the-entirety, 26

Tenants-in-common, 26

Tennessee, 254

Testamentary trust, 9, 32, 85

Texas, 26, 57

Throwback rule, 223

Title insurance, 156

Totten trust, 159

Transfer tax, 66, 156

Transferring assets to trust, 134, 142, 151-184

Trustee

• explanation of, 35, 101
• liability of, 58, 59
• who can be, 101
• choosing yours, 101
• compensation for, 102, 108
• for children’s trust, 39, 43, 113
• corporate trustee as, 35, 101, 105-110, 120, 123

Trust in a will, 9, 22, 32, 39, 85

Trust protector, 110, 178, 227

U

Unfunded trust, 40, 55, 151

Uniform Lifetime Table, 174

Uniform Transfer to Minors Act, 20

Uniform Gifts to Minors Act, 20

Unlimited marital deduction, 73

Use rights (to a charity), 242

Utah, 254

V

Vehicles, 165

W

Will

• losing control with, 8
• when you die with, 8
• incapacity and, 17
• not having a, 23
• contesting with, 16, 45, 129
• trust in a, 9, 22, 32, 39, 85
• costs of compared to living trust, 53
• pour over, 142, 145
• Wisconsin, 254

Wood, Natalie, 15

Wyoming, 245, 250, 254