This website is for Authorized Independent Representatives only.
NOTE: The A & AB Trust Price is $1995 Effective August 1, 2016
Trust Types & Prices
Types of Living Trusts
A Living Trust is officially known as an Inter-Vivos Revocable Trust. It is a
revocable statutory trust and in most cases it remains completely under
the control of the individual/s who drafted it. In the vast majority of cases
the Trustors (the ones who formed the trust) are also the Trustees (the
ones who control the trust) and also the Beneficiaries (the ones who
receive the benefit from the trust). Wearing all three hats puts them in full
control of the trust. They can do anything they want with the trust, even
terminate it at will. They control all their assets after they are funded into
the trust just as they did before they put them into the trust. Because the
trust is revocable it has no tax identity of its own. A tax identification
number is not necessary until one of the Trustors dies. A Living Trust
gives no liability protection for the assets that are in it and it has no
special tax benefits other than doubling the estate tax exemption for a
There are several different types of Living Trusts to consider.
The “A” Trust $1,995:
The “A” trust is another way of indicating that the trust is for a single
person. This will be a single party trust and it is often used not only for
unmarried people but is very effective as a pre-nuptial trust where the
client wishes to identify and place their personal assets into trust prior to
being married. Assets placed into such a trust under those conditions
would be considered sole and separate property and would not be subject
to community property in states where that applies.
The A-A Trust $2,395:
This trust is usually used where two single people are living together as
man and wife in a common law relationship or in cases where same
gender individuals are living as partners. The distinguishing factor would
be that they are in some fashion co-mingling their financial interests or
assets (perhaps buying a home together) but are not living under the laws
governing legal marriage. This is essentially two “A” trusts but with some
differences to provide for the legalities of the situation. Each applicant needs
to complete his own separate application for the A-A Trust.
The A-B Trust $1,995:
The AB Living Trust is used for couples that are legally married. This trust
gives each spouse the opportunity to individually declare the heirs of the
assets that they bring to the trust. It usually uses the spouse as the
default beneficiary at the first death of a spouse leaving everything to the
surviving spouse. It has another very important feature. In a day and age
when people are marrying two and three times or more, it provides that
each spouse can individually designate the beneficiaries of their individual
assets such as to children from a previous marriage. At the death of a
Trustor the deceased’s half of the Living Trust becomes irrevocable (it
becomes the “B” Trust) preventing the surviving spouse from changing
any bequests the deceased spouse may have made, thus insuring that
the wishes of the deceased spouse are honored.
An A-B Trust also effectively doubles the estate tax exemption on the death
of the second spouse
The QTIP or A-B-C Trust $2,395:
This stands for “Qualified Terminable Interest Property Trust. This trust is
used for married couples where their total assets exceed the estate tax
exemption. Under normal circumstances estate taxes would have to be
paid in full within 9 months of death of the first spouse on the excess over the estate tax
exemption. This could create a huge problem if the excess was very
large. The exemption for 2016 is $5.45 million.
If an estate is worth $6.45 million in 2016 and an exemption of only
$5.45 million was allowed, it would have created a $1 million dollar taxable excess
and the estate tax on that $1 million could be $350,000 dollars or more.
If the estate is not liquid enough to pay the $350,000 dollars of estate tax, something
would have to be sold or liquidated from the estate to pay the tax. It would also
constitute a sizable reduction to the estate that could be a serious disadvantage
to the surviving spouse
The QTIP Trust provides for relief from this situation by moving the due date
for payment of the estate tax out to 9 months after the death of the
For example, upon the death of the first spouse, $1 million would have gone into the B Trust,
$1 million would have gone into the surviving spouses A Trust, and $1 million
would go into the C Trust.
The surviving spouse can take all the income from the C trust for
maintenance, education, and health maintenance but those privileges are
limited. Specific rules apply to this provision governing how much the
surviving spouse can remove from the trust and we recommend that you
research this provision and familiarize yourself with the specifics.
The QDOT Trust $2,395:
The QDOT Trust is essentially the same as the QTIP Trust with the
exception that it applies to married couples where one or more of the
spouses is a non citizen resident alien. To retain the estate tax benefits
the trustee of this trust must be a U.S. Citizen. A full explanation of this
trust goes beyond the scope of this manual and we suggest that you
research this provision and become thoroughly familiar with it especially if
you work with foreign nationals who may be living in this country and
have assets in excess of the current year estate tax exemption.
The Special Needs Provision – $100 additional charge for clients purchasing a Heritage
We do a 5 page "Sub-Trust" as a Special Needs Provision to our regular Living Trust.
This Special Needs provision must be ordered at the time the original trust is done. Asking for a
Special Needs Provision to an existing trust at a later time does not qualify as a free change to the
Living Trust under our Guarantee. No additional commission is paid for the Special Needs Provision.
Situations occur where a family may have a child with special needs.
This could be permanent physical impairment or a mental or emotional
impairment requiring a lifetime of care from the parents. In this case a
Special Needs Trust may be necessary. This trust is designed to provide
for the ongoing care of the child even after the parents die. Often the child
will be on government programs or assistance that could be adversely
affected by a trust that would leave the child with assets at the parent’s
death. A Special Needs Trust provides for arrangements to use proceeds
from the Living Trust to care for the child without affecting other valued
benefits. An additional form is needed for this provision and can be
found on the Sales Form page.
The I.L.I.T. Trust - $700:
This trust is also known as an “Insurance Trust” and its purpose is to
remove the death benefits of the clients life insurance from his estate. Life
insurance death proceeds are countable in the Estate Tax calculation
after death and can boost the total assets of the estate over the
exemption limit causing an Estate Tax to occur on the estate. Using the
ILIT reduces the after-death estate assets by the amount of the life
insurance death proceeds and in many cases reduces or prevents the
Estate Tax from occurring altogether. This important point should be
considered in larger estates and the ILIT recommended where this
situation occurs. A separate form needed for this trust can be
found on the Sales Form page.
There are a couple caveats to remember when using ILITs:
(1) The ILIT is a taxable entity that must file its own separate tax returns
each year. However, the returns are generally simple and can be handled
easily by an accountant; and
(2) The transfer of an existing life insurance policy to an ILIT may result
in the policy proceeds being included in the taxable estate if the death of
the policyholder occurs within three (3) years of the transfer. The
recommended approach is to have the ILIT acquire a new policy and then
the three year restriction would not apply.
The Land Trust - $1,500 when purchased alone
$1,000 when purchased with a Heritage Living Trust
These simple title holding trusts were originally started in Illinois, so they are often
called Illinois Land Trusts. The purpose of a Land Trust is to allow one to have the
legal title to his property held by another person or trustee while retaining all of the
rights and privileges of property ownership (the beneficial interest). The trustee acts
only upon the beneficiaries’ direction. The property owner still retains all rights, such
as the right to possession, to collect rent, mortgage the property, homestead
exemption, and any other benefit he now has.
Avoid Probate, Save Taxes
Property held in a Land Trust can be designated for transfer of ownership whenever
you desire. Your spouse, children or other successors can bypass costly and time
consuming Probate proceedings and can sell or refinance the property without delay.
Probates often take years to settle. With a Land Trust your heirs could sell
immediately and avoid making payments on the property they inherit but don't wish
Protect Your Credit Report
Public recordings related to your property will show up on your personal credit
report, thereby lowering your credit score and access to credit. If you hold title to
property in a Land Trust, any liens relating to your property will not report to your
personal credit report. This allows you time to work out the problem more favorably,
since it does not appear on your reports.
Insulate Your Property From Liens & Judgments
Liens, judgments, lis pendens and claims by city and county government, usually
attach to property held by a person in his or her name, or as a co-owner with others.
This can make the property more difficult to sell or refinance. Where the same
property is held in a Land Trust, legal matters affecting the beneficiaries do not pass
through to the subject property.
About Partners and Tenants In Common
Properties with more than one owner, benefit greatly from a Land Trust. First, it
isolates each owner from any liens, judgments or other public record filings from
being attached to the property. It also allows for partners to readily and easily sell or
transfer their interest to another investor. They can also gift the property to a family
member whenever they wish without tax or reassessment. With Land Trust
ownership, it is possible to sell property for cash and avoid the reporting of the sale to
governmental agencies, thereby entirely postponing or avoiding tax consequences. By
having only one trustee acting for all of the owners, there is no need for all of the
owners to sign necessary papers, documents and contracts, which may become
necessary from time to time. This saves time and confusion when there are several
Many cities and counties charge hefty transfer taxes when someone sells property to
another person. They often reassess the property taxes and those taxes may be
increased considerably. In California, it is possible that the property taxes could
increase by several times. In a Land Trust, it is possible to privately transfer the
beneficial interest (the actual ownership) in the trust without so reporting to any
governmental agency. This is because a person's interest as a beneficiary of a Land
Trust is considered personal property under the law. This can be extremely beneficial
when buying out a partner or spouses interest in a property, or if you wish to deed the
property as a gift to children or grandchildren.
Legal ownership of all property is listed with the county recorder's office in all
counties. That means your ownership information is available to anyone who wants it.
That is why property owners are constantly solicited by mortgage brokers to apply for
new loans. If you form a Land Trust, your interest in the property remains
confidential. We believe that matters of real estate ownership should be private. You
don't let everyone know your bank account number or balances. Why let the entire
world know the equivalent of your real estate holdings? A Land Trust offers a way to
maintain privacy regarding real estate ownership.
Call Heritage Living Trust at (888) 437-8778 with any questions.