Wills and Trusts

I have clients whom are interesting in exploring a 1031 Exchange. During my conversation with them, I realized that they really did not understand the difference between a "Will" and a "Trust". I therefore wanted to share some general information with all of you on this topic.

Many 1031 Exchange clients hold title to their investment property in a Trust. Here are the basic differences between a "Will" and a "Trust".

Will:

• A Will is a legal documents which states your intentions. It identifies to whom you wish to pass your property & money to upon your death.
• A Will MUST be administered by Court Order via probate process.
• Probate can be costly. Fees are set by law and computed based on the gross value of the Estate.
• A Will is part of the public record.

Trusts:

• A Trust allos you to transfer legal title of your property to another person (or to yourself as Trustee) to hold for the benefit of yet another person (beneficiary).
• Trustor -- Person who owns the property and creates the Trust.
• Trustee -- The person designated to make all the decisions about the money and property in the trust.
• Beneficiary -- The person who will receive the assets upon Trustor's death.
• Revocable living trusts are income and estate tax neutral (they do not have a unique taxpayer ID number)
• Trusts are not part of the public record and therefore are private.

A quick update on the differences.

If you are contemplating a 1031 Exchange and would like the names of some very qualified 1031 Exchange companies, please let me know.

Until next time -- Live Aloha!! Ciana