Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8Tolling on the River By: Frank Friday Esquire Director Trust In Your Deeds By: Frank Friday Esquire Director the registration renewal of a Kentucky plate until it is paid. The details of this process are still being determined at this writing, but most likely, the delinquent payments won’t be collected by County Clerks, but done solely through Frankfort. Penalties of at least $25 for drivers who don’t pay tolls over a two-month period, and $55 after three months are also to be assessed. A $5 late fee will start with the second invoice. Enforcement could include lawsuits One of the more popular items we see these days in Kentucky property practice is the increasing use of a Living Revocable Trust to pass along estates, especially property. This is a good way to handle one’s affairs as it is efficient and costs very little, and avoids a lengthy probate court procedure. Essentially, one deeds his property to a trust, making himself the trustee and stating the intended beneficiaries a successor trustee will distribute too. (This is often the same person.) This trust instrument does not get recorded, just the land deeds. This is done by the grantor of the trust, and there is no Power of Attorney needed. There is also no transfer tax on such a deed, nor in Kentucky are automobiles taxed on transfer to such a trust. (Items like life-insurance and joint accounts with banks, stock-brokers already bypass probate so they don’t need to be put in the trust.) The trustee may “revoke” or change the trust anytime when he or she is of sound mind, and the property is still and “instructions or requests to state police departments to stop and detain considered under the full control of the trustee. This is a much better way to do things than the so-called “pocket- deed” that was common in many rural states like Kentucky in years past. The grantor would execute a pocket deed but not record it for his beneficiaries, waiting for his passing, but this could result in mix-ups, lost documents, deed contests over proper consideration, and possible federal gift tax problems- all the things one would hope to prevent with planning. In a revocable trust, things are a lot simpler in most instances. A few caution spots should be remembered though. First off, a minor cannot be named as one of the successor trustees, so they may not be eligible as trustees until they reach majority ; there should still be a “pour-over” will, if the estate is large and not all the property distributed in the trust; and state and federal taxes may still be due. For a federal estate tax, the exemption is $5.45 million per legatee, so most people will fall under this amount. In Kentucky, there is also an “inheritance” these individuals,” according to the toll policy agreement. Indiana has already made plans to turn over chronic late payments to collection agencies. The new Ohio River Bridges have been a long time coming, something the people of this community have wanted for many years. But they also will come with a hefty price, including all those tolls. As the man said, “There is no such thing as a free lunch”, especially if you travel over to Indiana to eat it. tax on the person who gets the legacy. This tax exempts close relatives entirely-surviving spouse, parents, children, grandchildren, brothers, and sisters. Nieces, nephews, aunts, uncles, daughters- and sons-in-law, and great- grandchildren get an inheritance tax exemption of $1,000. If they inherit more than that, the amount exceeding $1,000 is subject to tax at a rate of four percent to 16%. Everyone else gets a $500 exemption, going from six percent to 16%. Again, good planning on the trust should cut down the tax liability to little or nothing. There’s also an added twist with FDIC insurance. While normal accounts are insured to $250,000, a trust can use the amount for up to each of five named beneficiaries. Setting up a revocable trust is still a job for a lawyer, even though that’s a popular form document sold on the internet. Even here though, it’s a good deal, as most lawyers charge their lowest fee for a living revocable trust as it is so simple and common an instrument. continued from page 1 2