Does the living trust reduce income taxes or estate taxes?
In a word, no. During the owner’s lifetime the trust has no effect on the owner’s income tax. That is the owner will continue to be taxed on the income from the assets held in the trust. After the owner’s death the assets in the trust will be subjected to the estate tax in much the same manner as a probate estate. Other types of trusts are used to avoid or lower estate taxes but their terms and impact on your control of the trust assets are significantly different than a typical living trust. Often times, proper estate planning will involve the use of both types of trusts. • Are there any disadvantages to using a living trust? There are certainly some differences that everyone should be aware of. For example there is more expense establishing and funding the trust than if you held the assets outside the trust. In most cases you can control the expense by working with your attorney and letting him or her know how much of the work you are willing to do in the funding of your trust. Also
