TITLE

A Simple Solution?

AUTHOR(S)
Campbell, Thomas H.
PUB. DATE
April 1994
SOURCE
Journal of Financial Planning;Apr94, Vol. 7 Issue 2, p58
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The article focuses on the usefulness of a funded revocable trust to avoid probate, ensure privacy and allow for the smooth transition of management of assets in the event of death or disability. However, he says that the clients are more comfortable with equal joint ownership because it confirms their view of marriage as a complete sharing of benefits and burdens as well as a rejection of any notion of mine and yours. The author says that he is uncomfortable with joint revocable trusts. The transfer of the property from joint ownership to ownership by a joint revocable trust changes the property rights of each of the grantors. The author says that there are several potential problems that must be avoided when this change occurs. Firstly a taxable gift may occur when the trust is funded. Funding of the trust with any separate property may cause an unintended gift. The gifts occur because the spouse who was not the previous owner of the separate property has received a beneficial interest in the property placed into the trust for life. The author says that one can avoid the gift-tax problem by making the trust revocable at the option of either grantor. There would be no completed gift as long as the donated property is returned to the donor spouse upon revocation.
ACCESSION #
5558064

 

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