Living Trust & Will: Building Your Estate Planning Fortress
Don’t let the courts decide your family’s fate. This step-by-step guide covers Living Trusts, Probate avoidance, “Step-Up in Basis” tax hacks, and protecting your minor children.
Check if this applies to you:
- Do you own real estate (a home)? ✔
- Do you have minor children? ✔
- Do you want to keep your finances private? ✔
- Do you want to avoid expensive court fees? ✔
Your Strategy
PROBATE AVOIDANCE Focus on Trust Structure & Funding
1. The Shield
Living Trust
2. The Voice
Will & POA
3. The Fuel
Funded Assets
4. The Legacy
Tax-Free Transfer
Step 1
Trust vs. Will: The Core Decision
A Will is a ticket to court (Probate). A Trust is a way to bypass it entirely.
SHORT ANSWER: If you own a home or have assets over ~$184k (varies by state), you likely need a Living Trust to avoid Probate. A Will is still necessary for guardianship.
Warning: Probate costs 3-7% of your estate and freezes assets for months. See ART 402.
Warning: Probate costs 3-7% of your estate and freezes assets for months. See ART 402.
| Feature | Living Trust | Last Will |
|---|---|---|
| Avoids Probate? | Yes (Instant) | No (Court Process) |
| Privacy | Private | Public Record |
| Incapacity Protection | Yes | No (Needs POA) |
Asset Protection
📂 Optional Brief (The Basics)
Living Trust vs Will: Which One Protects You?
→
Step 2
Setting Up & Funding the Fortress
A Trust is just a bucket. It’s useless if you don’t put your assets inside it (“Funding”).
CRITICAL RULE: You must retitle your house and accounts into the Trust’s name. An “Empty Trust” does nothing and leads straight to Probate.
Also, you need a Power of Attorney (POA) for when you are alive but incapacitated.
Also, you need a Power of Attorney (POA) for when you are alive but incapacitated.
The “Funding” Checklist
- Real Estate: Record a new Deed.
- Bank Accounts: Change owner to Trust.
- Investment Accounts: Change owner to Trust.
Key Roles
- Trustee (You)
- Successor Trustee
- Executor (for Will)
📂 Optional Brief (Action Plan)
How to Fund a Living Trust (Deed Transfer)
→
Step 3
Tax Hacks & Protecting Children
Death wipes out capital gains tax (Step-up basis). Make sure your heirs get this benefit.
SHORT ANSWER: Don’t gift your house to your kids while you are alive (they inherit your low tax basis). Let them inherit it at death to get a “Step-Up in Basis” and erase capital gains taxes.
For minor children, naming a Guardian in your Will is the single most important line you will ever write.
For minor children, naming a Guardian in your Will is the single most important line you will ever write.
| Scenario | Tax Basis | Capital Gains Tax |
|---|---|---|
| Gift while alive | Original (Low) | High (Bad) |
| Inherit at death | Stepped-Up (High) | Zero/Low (Good) |
| Estate Tax | Exempt up to ~$13M | 0% for most |
Legacy Safety
📂 Optional Brief (Tax Strategy)
The “Step-Up in Basis” Rule Explained
→
🛡️
Visual Blueprint
Estate Planning Fortress Map
→
My Configuration
CoreLiving Trust
BackupPour-Over Will
GoalAvoid Probate
Suggested Order
CHECKLIST
01 Inventory all assets
02 Choose Successor Trustee
03 Name Guardians for minors
04 Draft Trust & Will (DIY or Lawyer)
05 Notarize documents
06 Fund the Trust (Retitle Assets)
07 Set up POA (Financial/Medical)
08 Store documents safely
Don’t Do This
- Forgetting to Fund Trust
- Gifting house before death
- Ignoring Digital Assets
- Never updating the Trust
Documents Needed
Save These Files
Trust Agreement
Pour-Over Will
Grant Deed
POA Forms
Schedule A
Who Can Help
1. Attorney ▶
2. Notary ▶
3. Bank
“A good estate plan is a love letter to your family. It prevents chaos when they are grieving.”
Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Estate planning laws (Probate, Trusts, Wills) vary significantly by state. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
Copyright © 2026 Best Money Tip. All Rights Reserved.