Readers may have a misconception that trusts are an estate-planning vehicle only for the wealthy. In addition, since the federal estate tax exemption is over $5 million, some may regard the need for the tax-saving advantages of trusts as obsolete.
A do-it-yourself approach seems to be highly regarded in our culture. From home improvement projects to online tutorials and courses, Americans like to empower themselves to success.
The act of receiving an inherited asset, whether it is real estate, investments or cash, generally does not trigger income tax. However, any subsequent earnings on that asset might be taxable. For example, interest or dividends payments might be subject to income tax. If an heir sells an inherited real estate asset, that sale could also implicate capital gains taxes.
What happens when non-probate assets do not have a named beneficiary? They might wind up back in probate.
Readers may be aware that there are options for borrowing against the equity in their homes. One such option is called a reverse mortgage.