Trusts

[Mike Baker]

So I've read through a lot of the land trust info and find myself still a little muddled about it.

So here's my question.

My wife's parents own their house outright so we are trying to figure out whether or not to suggest a land trust to avoid the inheritance tax issues, and to avoid having to buy the house from the estate as they are in their 70's now, and my wife is an only child.

Is this a good idea or a waste of time.

All of my research has suggested both so anyone with some insight would be very welcome.

Thanks in advance. 

[Rick H.]

A "land trust" will not necessarily avoid any particular tax. There are many, many types of trusts, each drafted with a given set of objectives: privacy, asset protection, tax avoidance, charitable remainder trusts, generation skipping trusts, beach bum trusts, etc.

Also, you need to be very specific as to the taxable events. Merely funding (transferring or acquiring) in a title holding trust is not, per se, a taxable event or avoidance device and the IRS treats as if vested in name(s) of person or entity who are beneficiaries.

Buy the book from attorney Mark Warda from Jack Shea or others and read up on the topic.