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Q.Does A Revocable Living Trust Provide Tax Savings?
A.NO. This is a very common misconception. Placing property in a living trust or revocable living trust will NOT reduce your income or estate tax liabilities any more than a Will. When you pass away, the trust assets are included in your estate for federal estate tax purposes. However, if your estate exceeds $2,000,0000 (the present federal estate tax exemption), your attorney can use of a variety of more complicated, Irrevocable Trusts and/or incorporate tax-saving measures into your trust, such as a bypass trust, dynasty trust, charitable gift, or marital deduction trust.
Also, a living trust does NOT protect assets from creditors or future lawsuits while you are alive and in control of the trust (acting as its Trustee).
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