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Would living trusts help Washington, DC residents?

The simple yet unpopular answer to this question is maybe. Of course, every Washington, DC resident needs a will. Whether to have a living trust, however, depends on the types of assets that are owned by a Washington, DC resident and what his or her estate planning goals are with respect to those assets. A general rule of thumb is if an individual owns assets that can appreciate -- but have no listed beneficiary -- living trusts could be useful.

Real estate, including the family residence, and stocks or other securities that are not part of a retirement plan are good examples of assets that could benefit from a living trust. When it comes to real estate, it is possible to simply add an intended beneficiary to the title so that it passes directly to him or her after death. However, this would deprive the beneficiary of certain tax benefits if the property is sold after death.

Other than the tax advantages, another benefit of putting property into a trust is that it does not have to pass through probate. Assets such as retirement accounts, life insurance policies and IRA's require a beneficiary designation. This ordinarily precludes these assets from having to go through probate. This could potentially save heirs and beneficiaries a significant amount of time and money.

No two estate plans are exactly alike, and many different options exist to ensure a Washington, DC resident's wishes are carried out after death. For many people, those wishes are to avoid probate and reduce or even eliminate the amount of taxes owed by heirs and beneficiaries. Doing so helps give the next generation the maximum benefit from the assets left to them. Like any other estate planning document, living trusts can be customized for an individual's particular circumstances to meet those goals.

Source: redlandsdailyfacts.com, Do I Need a Living Trust?, Ensen Mason, Feb. 25, 2014

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