Many individuals will choose to avoid probate through the use of a revocable living trust rather than a last will.
Since you are placing personal assets into a trust you may think that you are removing these resources from your estate for tax purposes. You may also make the assumption that these resources are out of the reach of litigants or creditors.
Unfortunately this is not true. Assets that you placed into a revocable living trust are indeed subject to attachment and they are considered a part of your estate by the tax man.
This is because you retain incidents of ownership when you use a revocable living trust. In fact, being able to control the assets and even dissolve the trust if you want to is part of the appeal for a lot of people.
If you did want to realize asset protection and tax savings while still being able to benefit financially from monies that you placed into a trust you could create an Alaska trust. The state of Alaska allows for such self-settled trusts, and this means that the grantor can also act as the beneficiary. But, unlike revocable living trusts these vehicles do in fact protect your assets and they are not a part of your taxable estate.
Alaska trusts are irrevocable, and at least one of the trustees must either have a business presence in Alaska or be a resident. The way that many people proceed to satisfy this requirement is to arrange for an Alaska-based trust company to assume the role of trustee.
The weather may be cold in Alaska, but the climate can be quite inviting to those who are seeking asset protection, income, and tax efficiency.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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