[13강 Living Trust] ✍🏼지금 늦기전에 리빙트러스트를 설립해야 하는 이유 - Living Trust 증여 상속 택스플래닝 - YouTube

If you're someone who has settled down in the US and is watching this video, you've probably heard of Living Trust.

Many people say they’ve heard it’s good to do Living Trust while doing Family Living Trust.

They say whenever it slips my mind, there are seminars about it around me, and I usually go to seminars and listen to them through financial advisors who introduce financial products.

And I get interested and forget it again. After a while, I hear about it, and I think to myself, “So what was this?”. It seems this process repeats itself.

So in this session, I’ll briefly deal with what Living Trust is, what it’s useful for, and how it works.

I want to say that in some ways it's very simple and nothing quite special.

For any reason, it seems that some people deliberately explain it as if there is something amazing,

or they often confuse or mix up Living Trust and other Trusts, which becomes difficult to understand.

I hope you receive sufficient and essential information through this video. Then let’s get started.

The contents go in the order of What is Living Trust? Who and why? How do I do it? Then first, what is Living Trust?

In short, it's a company on paper. It's a procedure to designate how you manage your assets in your lifetime and to whom you will hand them over post-mortem.

It means that you create a company on paper called Trust and transfer your assets to the company, hence transferring nominal ownership.

It means that by designating how the company operates, while you are alive, and after you die,

the establishment and operation of the company is to allow others to recognize your intention and will to operate and manage the assets transferred here when “needed”.

Second, who and why. This is the most important part. First of all, to briefly talk about who does it,

Those who live in the United States or have assets in the United States must do so if their assets are worth over $150K.

For example, if you have a house, it will probably be worth more than $150K.

So families in or above the middle class in the US, proceed with family financial planning, or estate planning.

It's a plan for investment, gifting, and inheritance. When starting this, the very starting point is to establish a Living Trust.

Next, Why? What’s the Reason? - There is no grand reason, there is only one.

4 to be exact, 1 + 3. In other words, there’s the most important reason 1, and 3 other reasons.

The first and most important reason is that you can avoid probate. That's the reason for 99% of cases.

What is probate? In Korean, it’s called a will verification procedure.

When you die, you want to give assets to the person you want, but it's not as easy as it sounds.

It varies slightly from state to state, but in general, if the assets subject to your inheritance are worth more than $150,000,

you will have to go through probate in the competent court to complete the inheritance process.

For example, you own a house in California.

Then, when you die, you want to leave a will and give it to your children. The house is registered, right?

If your children go to the county office and ask to transfer the registration saying their father died,

they’ll be asked, "Have you been ordered by the court?"

If the answer is no, they won't go through with it.

This court order is a decision you receive after completing the probate, the court's will verification process.

However, if you have established a Living Trust and transferred ownership of the asset nominally in this situation,

you can transfer the asset without a court order by going to the county clerk and showing this Trust document.

In other words, it means that you’ll prevent probate.

Back to probate, probate is something that involves time, cost, hassle, and furthermore, court procedures.

Therefore because it is an open legal process,

personal information and asset details are also disclosed, hence privacy is not guaranteed.

And if a stakeholder raises an issue, there may be such a cumbersome problem to deal with.

Therefore, when probate generally goes through this process, related costs such as actual court procedures can also incur more than 3-5% of the inherited assets.

For example, if the inherited assets are $1 million, they will be more than $30,000 to pay.

The entire probate can also take more than a year and a half or 2 years, and as mentioned earlier, there can be a hassle of dealing with issues raised by stakeholders.

So if you set up a living trust, you can avoid probate. This is the most important, the first reason. Just, this alone could be enough of a reason.

But what if there's no such thing? What if there’s no one to bother raising an issue, and the assets aren’t very complicated?

You could say it’s going to be simple, and that may be true.

Then, I’ll move on to the second reason.

The second reason is that it doesn't cost much, about $3000? It varies from lawyer to lawyer, but it does not exceed approximately $2,500 to $5,000.

Of course, you can put other complex functions such as asset protection features into the Living Trust, and in that case, the price can go up further.

But if you completely focus on the Living Trust, you won't exceed the cost level I mentioned earlier.

In short, if you look at the cost benefit, it's doable.

And once established, of course, it may need to be reviewed regularly and changed as related laws change,

but most processes aren’t difficult enough for the lawyer in charge to do it at no additional cost.

Third, it can replace a will. To be precise, Living Trust is a top concept that includes a will.

When making a Living trust, you can prepare not only Trust documents, but also other wills, agent decisions for making decisions about your health, and designating agents for making economic decisions.

Fourth, making living trust is a very light decision - What this means is that if you want, you can change the contents of the Trust at any time.

For example, you could put in and take out assets.

You can also change the beneficiaries' information at any time.

For example, you have a son and daughter, and you try to give each of them half. Then you can change the contents.

The Trust can be canceled, and there is no separate need to file taxes. To be precise, it can be seen that there is no real difference from actually owning an asset yourself.

So this was about who and why. Next, third, how do you make it? How do you do it? It’s very simple. You can go to a lawyer and do it.

There are some differences between lawyers,

but they prepare 7 to 8 documents, including Trust, a Trust certificate, a will, designation of a substitute decision-maker for health, and designation of a representative for finance.

This was a brief discussion about Living Trust.

The point is, if you and/or your partner have assets worth more than $150,000, you must do it. Because it is much more cost-effective. If done now, it can be easily fixed later.

Also, as I said earlier, if you don't do it now, you'll be in a situation where you'll hear the same thing again 6 months later, a year later, or 2 years later.

I think there are quite a few people watching this video that relate to this situation.

Listening to the explanation of Living Trust, thinking about it, and then letting it slip, and a few years later, listening to it at a presentation again and thinking,

“What was it?”, and letting it slip again.

You might, of course, be reluctant to deal with post-mortem problems,

but as you know from the explanation now, it's not a big decision, and it's something to be made eventually. So it’s better to take that into account.

And also, there shouldn't be much going on in the meantime, but if something bad happens to you while there's no Living Trust, It'll be really late by then.

Because you didn't pay attention to it for a second... It would have been nice if you had made a Living Trust for your family who would be left behind.

But, if you did not, it would be a difficult situation because you would have to go through probates.

Therefore, it is necessary to take these into account.

Finally, some people may think, "Living Trust saves taxes." That's not it.

Today, in fact, I deliberately didn’t cover the legal content of Trust or any professional explanation of the components such as grantor, trustee, beneficiary, etc.

Today's purpose is for families settled in the United States to take financial planning, investment planning, and estate planning into consideration.

As the beginning of the process, as a fundamental first step that we must prepare, I wanted to explain the background and why we need it for the legal preparation procedure, Living Trust.

I hope my intention was well conveyed.

And next time, if we have the chance, we will also look at the trusts used for tax savings, which are more complex and advanced.

I hope today's content was helpful. In the future, when I have a chance with videos,

I will provide you with content about investment in the United States, asset management, and legal information necessary for this.

Thank you for watching. Please subscribe, like, and turn on notifications. Then I'll see you next time. Thank you.