Table of Contents

GOOD PLANS CAN GO WRONG 1

Part One—WHY GOOD PLANS CAN GO WRONG 7

1. LOSING CONTROL WITH A WILL 8

A Will Does Not Avoid Probate When You Die 8

A Will Does Not Prevent Court Control At Incapacity 17

A Will—And Minor Children (Or Grandchildren) 20

Summary 22

2. LOSING CONTROL BY DOING NOTHING 23

3. LOSING CONTROL WITH JOINT OWNERSHIP 24

4. LOSING CONTROL BY GIVING AWAY ASSETS 27

5. LOSING CONTROL WITH BENEFICIARY DESIGNATIONS 29

SUMMARY 30

Part Two—KEEPING CONTROL WITH A REVOCABLE LIVING TRUST 31

WHAT IS A REVOCABLE LIVING TRUST? 31

HOW A LIVING TRUST WORKS 35

HOW A LIVING TRUST IS SET UP 40

THE BENEFITS OF A LIVING TRUST FOR YOU AND YOUR FAMILY 42

WHAT A LIVING TRUST DOES NOT DO 49

ARE THERE ANY “DISADVANTAGES” OF A LIVING TRUST? 51

WHY HAVEN’T LIVING TRUSTS BEEN USED MORE IN THE PAST? 61

SO WHY ARE LIVING TRUSTS SO POPULAR NOW?  62

Part Three—THE ABCs OF A LIVING TRUST

How to Reduce/Eliminate Estate Taxes, Provide for Your Spouse

Without Disinheriting Your Children, and More 65

EXPENSES THAT CAN REDUCE YOUR ESTATE 65

UNDERSTANDING ESTATE TAXES 67

LEAVING EVERYTHING TO YOUR SPOUSE 73

THE A-B LIVING TRUST SOLUTION 76

THE A-B…AND NOW C 92

SUMMARY 98

Part Four—PLANNING FOR YOUR LIVING TRUST 99

YOU MUST MAKE SOME BASIC DECISIONS 100

WHO WILL BE YOUR TRUSTEE? 101

WHO WILL BE YOUR SUCCESSOR TRUSTEE(S)? 102

SHOULD YOU CONSIDER A CORPORATE TRUSTEE? 105

ADDING A TRUST PROTECTOR 110

HOW TO PROVIDE FOR YOUR BENEFICIARIES 111

ESTATE PLANNING IS SUCCESSION PLANNING 130

IF YOU NEED MORE HELP MAKING DECISIONS  132

Part Five—HAVING YOUR DOCUMENTS PREPARED 133

DO YOU NEED AN ATTORNEY? 133

HOW TO FIND THE RIGHT ATTORNEY 135

OTHER DOCUMENTS YOUR ATTORNEY SHOULD PREPARE  145

SUMMARY 150

Part Six—FUNDING YOUR LIVING TRUST 151

WHO WILL FUND YOUR TRUST? 152

HOW DIFFICULT IS THE FUNDING PROCESS? 152

HOW TO CHANGE TITLES AND BENEFICIARY DESIGNATIONS 153

Your Home, Real Estate, Land, Condominium, Etc. 154

Credit Cards, Notes You Owe 158

Mortgages, Loans, And Notes Owed To You 159

Checking, Saving, And Pay-on-Death Accounts 159

Certificates Of Deposit 160

What About FDIC Insurance? 160

Credit Union Accounts 161

Safe Deposit Box 162

Stocks/Bonds/Mutual Funds 163

Savings Bonds 164

Automobiles/Boats/Other Vehicles 165

Personal Untitled Property 166

Life Insurance 166

Employer-Provided Insurance 167

Sole Proprietorship 167

Closely-Held Corporation 167

Subchapter S Corporation 167

Limited Partnership/Corporations/Limited Liability Companies 168

General Partnership Interests 169

Copyrights, Patents, And Royalties 169

Oil And Gas Interests 169

Club Memberships 169

Foreign Assets 169

ASSETS REQUIRING SPECIAL CONSIDERATION 170

Guns 170

IRA, 401(k), 403(b), Pension, Profit Sharing, Keogh, And Other Tax-Deferred Plans 173

Tax-Deferred Annuities 182

Incentive Stock Options 182

Section 1244 Stock 183

Professional Corporations 184

Part Seven—THE FINAL STEPS TO YOUR PEACE OF MIND 185

ORGANIZE INFORMATION FOR YOUR FAMILY 186

CHANGING YOUR LIVING TRUST 190

MY SPOUSE IS INCAPACITATED. WHAT DO I NEED TO DO? 192

MY SPOUSE HAS DIED. WHAT DO I NEED TO DO? 196

I’M THE SUCCESSOR TRUSTEE. WHAT ARE MY RESPONSIBILITIES? 205

I’M THE SUCCESSOR TRUSTEE. WHAT DO I DO AT THE GRANTOR’S

INCAPACITY? 206

I’M THE SUCCESSOR TRUSTEE. WHAT DO I DO AT THE GRANTOR’S DEATH? 210

SUMMARY 216

Part Eight—INCOME TAX ISSUES AFTER YOU DIE 217

INCOME TAX RATES FOR TRUSTS AND PROBATE ESTATES 218

PREVIOUS INCOME TAX DIFFERENCES BETWEEN

TRUSTS AND PROBATE ESTATES 219

SUMMARY 226

Part Nine—ADDITIONAL PLANNING STRATEGIES  227

USING LIFE INSURANCE IN YOUR ESTATE PLAN 228

IRREVOCABLE LIFE INSURANCE TRUST  231

GIFT TAX PLANNING 232

INCOME TAX PLANNING 236

CHARITABLE REMAINDER TRUST  239

CHARITABLE LEAD TRUST  239

PRIVATE CHARITABLE FOUNDATION 240

OTHER FORMS OF CHARITABLE GIVING 241

Donor Advised Fund 241

Pooled Income Fund 241

Gift Annuity 242

Life Estate 242

Conservation, Mineral, And/Or Use Rights 242

Personal Property 242

Insurance 243

Qualifying The Charity/Finalizing The Gift 243

LIMITED LIABILITY COMPANY (LLC) AND

FAMILY LIMITED PARTNERSHIP (FLP) 244

QUALIFIED PERSONAL RESIDENCE TRUST  245

GRANTOR RETAINED ANNUITY TRUST (GRAT) AND

GRANTOR RETAINED UNITRUST (GRUT) 245

BUSINESS SUCCESSION PLANNING 246

ASSET PROTECTION PLANNING 248

LAND TRUST 250

PLANNING FOR THE GENERATION-SKIPPING TRANSFER TAX 251

DYNASTY TRUST 253

QUALIFIED DOMESTIC TRUST 254

SUMMARY 256

Part Ten—THE PERSONAL AND FINANCIAL ORGANIZER 257

INSTRUCTIONS FOR COMPLETING THE

PERSONAL AND FINANCIAL ORGANIZER 257

THE ORGANIZER 267

IN CONCLUSION 273

DEFINITIONS 274

INDEX 283

SPECIAL OFFERS FOR PROFESSIONALS 289

SPECIAL SAVINGS ON UNDERSTANDING LIVING TRUSTS® 290