Dissolve L.R.Trust that's too hard to keep re-titled?

[Rosedala]

Hello, I'd appreciate a lot your opinions on the following:

I have a Living Revocable Trust and when I began re-titling my financial accounts into it I realized of the enormous, time consuming work, especially each time one opens an account or changes one even within the same bank or out, etc...I decided to get rid of it and just stay with my Will only.

Since I no longer have family nor close friends and all of my savings will go to my charities, I figure the only drawbacks are: they'll wait longer after probation; they won't be getting much less because of taxes since I don't have that much; I don't care about privacy after my demise; as to contesting...the lawyer put in a clause just in case.

My questions:

1. Are there more drawbacks I don't know about after I dissolve my Trust?

2. When I communicated this decision to my estates lawyer he became fiercely angry!!! So do you know whether a Trust is much more lucrative to a lawyer than just a Will?

3. With only a Will, can this lawyer still be my executor, a health proxy, and my conservator if/when needed?

4. Can he also designate another lawyer in case he can't or won't want to remain with me?

5. Without a Trust, is it still necessary for him to keep my Power of Attorney?

Thanks ever so much for any opinions.

P.S. Yes, these questions are better answered by an attorney and I tried the internet, but the one answer difficult to get from them was to: "Is a trust more profitable for an attorney than only the Will?" lol!

 

[Souschef]

I had a trust, but after my wife died, part of it became irrevocable. I was able to dissolve it at some point because the assets fell below a certain amount. In your case, the biggest PITA is constantly updating the trust as the assets change. Plus, I had to file a K-1 and 1041 form every year.

I solved my problem by using a TOD and designating the beneficiaries. I believe you can do that for charities.
IMHO, the lawyer was angry because you deprived him of a fee for very time you changed assets in the trust.
To answer your question about which was more profitable, in your case you do a will once, since you have no family to change. As you explained, every time you changed assets, the tru$t had to be changed.
One minor thing, the process is called probate, not probation.

 

[Rosedala]

Thank you Souschef, your suggestion of a TOD or POD is very good, but they don't accept it on charities. They want their individual names, even their social security numbers!!! I'm reluctant to leave it to the person in charge of the charity as I read enough in the news how they cheat their own organizations.

As you explained, every time you changed assets, the tru$t had to be changed.

Oh no!!! I thought it was sufficient that my Trust name appeared on statements and other correspondence. I'd have to be careful to find out for sure, but if so, now more than ever I want to get rid of it!

I'm sure my lawyer will be very bored with only a Will lol! And practically no changes. However I must make sure that the other related documents will also be done by him or use the same ones.

Thanks also for your correction of probate.

 

[marko]

I have a Living Revocable Trust and when I began re-titling my financial accounts into it I realized of the enormous, time consuming work, especially each time one opens an account or changes one even within the same bank or out, etc...

Why not have an umbrella account that covers all assets?

Our trust(s) list "Fidelity account # x" and includes checking, savings and several investments. If we move or change an investment, it remains within the same umbrella account. We don't have our day-to-day monies in the trust (daily checking and small savings), just our larger financials.

Or am I missing something?

 

[bingybear]

OP, is your trust revocable or irrevocable? We have only put real estate directly in the trust. Investible assets are in individual accounts with TOD/POD designations. Are you trying to put everything in the trust now?

Who is trustee for your trust at this point in time?

I would assume if set up or change an account an account you would need to show proper identification be it a trust or individual account.

Can you describe what is so demanding?

Is this really that much more involved than setting up other accounts? I admit you would have to title over accounts from individual to trust once each.

Why not have an umbrella account that covers all assets?

Our trust(s) list "Fidelity account # x" and includes checking, savings and several investments. If we move or change an investment, it remains within the same umbrella account. We don't have our day-to-day monies in the trust (daily checking and small savings), just our larger financials.

Or am I missing something?

Marco, I think the OP is talking about the set up of accounts. I assume your trust lists account numbers of accounts owned by the trust. But you still had to set up those accounts which seems to be part of the OP's issue. Marko, are you using Fido's trust services? or just holding accounts at at Fido?

OP, why did you create a trust in the first place? What was you goal?

 

[marko]

Marco, I think the OP is talking about the set up of accounts. I assume your trust lists account numbers of accounts owned by the trust. But you still had to set up those accounts which seems to be part of the OP's issue. Marko, are you using Fido's trust services? or just holding accounts at at Fido?

Not using their trust services. Just an investment account at Fido with several investments under one account number.

It is mainly a narrow trust to insure a specific set of individuals receive funds from this account in the event that DW and I are not around.

It's separate from our larger family trust.

 

[Dash man]

We both have individual trusts set up but are not funded. All assets are in our joint names. Our wills have our assets going into our respective trusts. When the first of us dies, all assets go to the other. They will then transfer the assets into the remaining spouse’s revocable trust. Our wills also leave all assets to the trust should we pass together. We don’t have to deal with an irrevocable trust. USAA is our trustee after we’re both gone and our lawyer has the power to fire them and hire another should they mishandle anything.

 

[kaneohe]

................................ As you explained, every time you changed assets, the tru$t had to be changed.
.........................................................

Can someone explain this? The only thing that comes to mind is that when
the trust was created there was a Sch. A or something that listed the initial assets to be put in the trust. The attorney requested that we send quarterly (?) updates to him on assets removed/added to the trust. A couple of years later he requested that we stop doing that.

I concluded that the updating became too much trouble if everybody did it regularly as requested. That raised the question: what puts an asset in the trust? Is it the fact that it is titled properly in the name of the trust at the institution that holds it? Or the fact that it is on the Schedule of Assets for the trust.....a supplemental part of the trust document?

What if it is titled properly but not on the formal Schedule of Assets for the trust? This would be common if Schedule of Assets was not updated formally.

One thought is that the Schedule of Assets was merely a way for someone to know what was in the trust. Other ways include an informal list of assets or someone accessing the mail that had paper statements. And is really necessary to list every asset with account number separately? I like Marko's
idea of "umbrella" accounts which just lists by financial institution instead of each individual account. In a retirement plan,you might just list the custodian and type account rather than the 8 different funds,for example.

 

[MooreBonds]

Is it really that onerous to put in a few extra words when you open up a new account? How often do you do it? Also, if you simply keep a copy of the relevant sections handy to give to the institution (I think it's Section 1 and Section 8), it's not too onerous.

The big advantage is you avoid probate. While probate isn't the greatest challenge, you have to legally retitle every single asset when you probate something, as you go through the courts, wait on judges, etc. It could cost you several % of your estate to probate it, versus spending AT MOST, what, maybe 3 hours total for the rest of your life to retitle a few accounts?

The whole reason you go through the process of making a RLT is (primarily) to avoid probate. You are at Mile 20 of a 26 mile marathon. Don't quit now and say "I'm too tired to finish this race. I'll instead do the 100 mile marathon tomorrow."

Ultimately, it's your call - but if you would be bothered by a charity wasting several % of your estate, then why waste it in the courts through needless bureaucracy?

 

[gwraigty]

I know nothing about trusts, but I wouldn't continue to work with a lawyer who became "fiercely angry" with me. My "trust" in him/her would be gone.

 

[MooreBonds]

Can someone explain this? The only thing that comes to mind is that when
the trust was created there was a Sch. A or something that listed the initial assets to be put in the trust. The attorney requested that we send quarterly (?) updates to him on assets removed/added to the trust. A couple of years later he requested that we stop doing that.

I concluded that the updating became too much trouble if everybody did it regularly as requested. That raised the question: what puts an asset in the trust? Is it the fact that it is titled properly in the name of the trust at the institution that holds it? Or the fact that it is on the Schedule of Assets for the trust.....a supplemental part of the trust document?

What if it is titled properly but not on the formal Schedule of Assets for the trust? This would be common if Schedule of Assets was not updated formally.

One thought is that the Schedule of Assets was merely a way for someone to know what was in the trust. Other ways include an informal list of assets or someone accessing the mail that had paper statements. And is really necessary to list every asset with account number separately? I like Marko's
idea of "umbrella" accounts which just lists by financial institution instead of each individual account. In a retirement plan,you might just list the custodian and type account rather than the 8 different funds,for example.

Using my grandmother's RLT as a reference (I managed her investments while she was alive, and although my father was the official executor, I was the actual executor since I am far more versed in financial matters), my understanding is that you do NOT have to update the "schedule of assets" every time you open an account. The SoA is primarily for assets which are not physically titled in a RLT (such as a piece of jewelry).

If you open an investment account w/ a broker in the name of the trust, and give them the trust paperwork when opening the account.....when the trust owner passes on, the executor notifies the broker w/ a certified death certificate, they freeze the account, and they start the process of transferring assets as the executor directs them. They don't automatically send a check to every heir in the trust, since you could have 10 different accounts, and one heir may say "give me this entire account over here", which would leave that heir cut out of the rest of the accounts based on the % they inherit - so the executor basically has absolute authority and needs to be someone you trust. Because if the executor is also an heir, the executor could, in theory, send all assets from various accounts to themselves, without anyone ever questioning a thing.

Listing all accounts on Schedule A helps add transparency, since any heir receiving a copy of the trust would see "Grandma had 5 accounts, 4 at Vanguard, and 1 at Fidelity" and would help keep the executor honest. The executor could, in theory, just tell the heirs about some accounts, and raid the rest, and no one would ever be the wiser. A vast majority of heirs probably have no clue what their parents/siblings have for investment accounts or financial assets at which locations - or, if they knew something, it's highly likely they don't know where all of the accounts are.

 

[Rosedala]

Why not have an umbrella account that covers all assets?

Our trust(s) list "Fidelity account # x" and includes checking, savings and several investments. If we move or change an investment, it remains within the same umbrella account. We don't have our day-to-day monies in the trust (daily checking and small savings), just our larger financials.

Or am I missing something?

Hi and thanks Marko. I didn't know about the "umbrella" since I'm what's called "interest chaser" which requires moving the accounts from time to time in or out of the same institution sometimes a 6 or 3 month accounts...

I'll explore the umbrella account though, but I had decided to put everything into the Trust, even the various small accounts except my IRA and I do know of the "pour over" Will, but don't know if the umbrella method will be accepted by the NY state Trust...

If you want to move one of your accounts under the umbrella out to another bank or credit union...you'd do it just as if you were doing it in any other bank? No other steps Thanks again.

 

[bingybear]

Hi and thanks Marko. I didn't know about the "umbrella" since I'm what's called "interest chaser" which requires moving the accounts from time to time in or out of the same institution sometimes a 6 or 3 month accounts...

I'll explore the umbrella account though, but I had decided to put everything into the Trust, even the various small accounts except my IRA and I do know of the "pour over" Will, but don't know if the umbrella method will be accepted by the NY state Trust...

If you want to move one of your accounts under the umbrella out to another bank or credit union...you'd do it just as if you were doing it in any other bank? No other steps Thanks again.

OP, If you want to play the interest chasing game, you likely go back and forth between similar institutions. When you move out of one where you might come back, leave enough to keep the account in place. Personally I've reduced brokerages to two. My time is worth more that a little more interest. The other way would be to use a personal account at the bank and and have a POD/TOD to your trust if your trust is there only for estate planning. If it is irrevocable or there for creditor protection then you may not want to do this. If you want interest then look at brokered CDs or lower investment grade short term funds for a little better yield. Typical brokered CD's have FDIC, not so with bond funds.

The trust may not be your problem.

I don't think marko's umbrella will solve your issue.

 

[CaliKid]

Have a trust. Remember trusts protect you at disability not just death. This is very important. Banks are a hassle no matter what these days but once you get things into the trust it should be smooth sailing.

No 1041's needed for a grantor trust. Just report income using your SSN.

Umbrella accounts are great as most big brokerages have multiple separate banks within them so multiple FDIC protections plus private insurance plus it's convenient.

Trusts are much less lucrative for attorneys than probates are. I professionally stopped doing trusts and now only do probate work. I make way more money in way less time.

The charities will thank you, in your next life, for saving them the cost and delay of probate.

 

[Texas Proud]

It has been a long time since I have read info on trusts... but I will throw something out that was told to me a long time ago..


If you plan on leaving all your assets to a charity and will not change that decision then most large charities will become trustee to a trust... IOW, it is in their interest to be trustee and wait till you pass to get the assets knowing they will get them instead of hoping you keep them in your will...


You will have to discuss what kind of income or principal you can take out of the trust etc. and if it can be revoked or not... that is the lawyers job...




BTW, unless the lawyer gave me a really good explanation on why he was mad that made sense to ME instead of HIM I would drop him....

 

[Rosedala]

Using my grandmother's RLT as a reference (I managed her investments while she was alive, and although my father was the official executor, I was the actual executor since I am far more versed in financial matters), my understanding is that you do NOT have to update the "schedule of assets" every time you open an account. The SoA is primarily for assets which are not physically titled in a RLT (such as a piece of jewelry).

If you open an investment account w/ a broker in the name of the trust, and give them the trust paperwork when opening the account.....when the trust owner passes on, the executor notifies the broker w/ a certified death certificate, they freeze the account, and they start the process of transferring assets as the executor directs them. They don't automatically send a check to every heir in the trust, since you could have 10 different accounts, and one heir may say "give me this entire account over here", which would leave that heir cut out of the rest of the accounts based on the % they inherit - so the executor basically has absolute authority and needs to be someone you trust. Because if the executor is also an heir, the executor could, in theory, send all assets from various accounts to themselves, without anyone ever questioning a thing.

Listing all accounts on Schedule A helps add transparency, since any heir receiving a copy of the trust would see "Grandma had 5 accounts, 4 at Vanguard, and 1 at Fidelity" and would help keep the executor honest. The executor could, in theory, just tell the heirs about some accounts, and raid the rest, and no one would ever be the wiser. A vast majority of heirs probably have no clue what their parents/siblings have for investment accounts or financial assets at which locations - or, if they knew something, it's highly likely they don't know where all of the accounts are.

Thanks so much your ample explanation plus kaneohe's helpful post too! What I gather is that one does have to enter physically the accounts on the Trust, so that on each change or addition I'll have to pay my lawyer several hundred dollars, PLUS spending a few hours there each time PLUS keeping track of everything more than once - on my own records, on the Trust, etc.

By entering the Schedule A means to write my accounts info on the Trust each time, correct? Well, as I mentioned in my first answer...I think I'll be happier without the Trust. After all I'm wasting my precious remaining time on working so hard for the people who, without moving a finger will get it all....No, no Trust for me thanks.

The only thing I must find out is if having only the Will my lawyer can still be my executor, my health proxy, my conservator if necessary and the few other documents to go along with the Will. Or, will I have to find them elsewhere I'll have to find the NY State to see their rules and ask THEM the questions.

To be on the safe side against abuse, I'll notify my charities of my legacy to them. On the other hand my estate is most simple (which is a deterrent to do "monkey business") - no real estate nor intellectual properties of any kind, no stocks and bonds, etc. I only have CDs, Savings, MMs, a small annuity, and an IRA.

I'm thinking I'd want to change my lawyer as he hasn't done a thing for me in terms of finding out my questions to him because he doesn't know. Hence I'm always busy searching the net and writing to this forum. Problem is I'll have to pay triple fee (before him I had a good lawyer for years who retired and moved out of state) so, I stay with this one unhappily, or, pay another fee to a 3rd lawyer.

Anyway, thanks again a lot. I want out of my Trust and will start by reverting my Trust name back to my own legal name regardless of my lawyer's feelings.

 

[Rosedala]

Have a trust. Remember trusts protect you at disability not just death. This is very important. Banks are a hassle no matter what these days but once you get things into the trust it should be smooth sailing.

No 1041's needed for a grantor trust. Just report income using your SSN.

Umbrella accounts are great as most big brokerages have multiple separate banks within them so multiple FDIC protections plus private insurance plus it's convenient.

Trusts are much less lucrative for attorneys than probates are. I professionally stopped doing trusts and now only do probate work. I make way more money in way less time.

The charities will thank you, in your next life, for saving them the cost and delay of probate.

Hello and thank you CaliKid.

"Have a trust. Remember trusts protect you at disability not just death"

I read in the net that trusts protect the disability of the beneficiaries. I didn't see they'd protect me, the giver. But I arranged with my lawyer that the only times he'll act is IF I'm dead or incompetent. The rest of the time I want to be alone (one of many reasons to get rid of the trust).

The more I think about it the more I feel the need of dissolving the trust. My reasons are in several answers in this thread, i.e.: Let the gov. take whatever it needs at probate, lawyer's fees, etc. and the rest goes to my charities whenever, whatever they get. Meantime, I simply don't want to work for them on top of leaving them my long, hard earned money. My lawyer has my power of atty. to do what he must at my demise or incompetence, plus $3,000 checking account in both our names at a bank near him so he can pay instantly for cremation only. So now, I want to forget all of this and enjoy whatever I have left.

The info I was hoping to get on this thread was whether with a will only, can my lawyer still be my executor, my health proxy, my Advance Directives (or Living Will) and a conservator if I'm incompetent? Also as a Wills specialist, can you tell me if there are any more documents I need now in addition to these?

I can imagine an umbrella account could work, however, I really really don't want to work any more. If I had a family, I wouldn't be seeking help as I do. Also IF I had a competent lawyer who could answer my questions and look up his law books if he doesn't know them or remember...I (and all of you kind, helpful posters) could've saved enormous time and bother...

Yes the charities should thank me for any monies they'll get regardless of minus expenses....

P.S. CaliKid....what are you hoping to get around September 1, 2022? lol!

 

[Rosedala]

We both have individual trusts set up but are not funded. All assets are in our joint names. Our wills have our assets going into our respective trusts. When the first of us dies, all assets go to the other. They will then transfer the assets into the remaining spouse’s revocable trust. Our wills also leave all assets to the trust should we pass together. We don’t have to deal with an irrevocable trust. USAA is our trustee after we’re both gone and our lawyer has the power to fire them and hire another should they mishandle anything.

Yes, it's much better as a couple. Good for you to have found an easy way!

 

[Rosedala]

OP, is your trust revocable or irrevocable? We have only put real estate directly in the trust. Investible assets are in individual accounts with TOD/POD designations. Are you trying to put everything in the trust now?

Who is trustee for your trust at this point in time?

I would assume if set up or change an account an account you would need to show proper identification be it a trust or individual account.

Can you describe what is so demanding?

Is this really that much more involved than setting up other accounts? I admit you would have to title over accounts from individual to trust once each.



At present I am the trustee and my lawyer the successor trustee. Yes, what's terribly demanding is that for each account first I must fight with the institutions which want to have my entire Trust, then I have to fill out their (sometimes) numerous forms. If I move one account I have to again repeat the whole process. Anyway, believe me BingyBear, it IS very annoying and time consuming. I now learn I have to physically enter my accounts in my Trust when I thought it sufficed to have the new trust name on statements.
Rosedala

 

[Rosedala]

OP, is your trust revocable or irrevocable? We have only put real estate directly in the trust. Investible assets are in individual accounts with TOD/POD designations. Are you trying to put everything in the trust now?

Who is trustee for your trust at this point in time?

I would assume if set up or change an account an account you would need to show proper identification be it a trust or individual account.

Can you describe what is so demanding?

Is this really that much more involved than setting up other accounts? I admit you would have to title over accounts from individual to trust once each.



Marco, I think the OP is talking about the set up of accounts. I assume your trust lists account numbers of accounts owned by the trust. But you still had to set up those accounts which seems to be part of the OP's issue. Marko, are you using Fido's trust services? or just holding accounts at at Fido?

OP, why did you create a trust in the first place? What was you goal?

Because I read about saving time for the beneficiaries, for the privacy, etc. However, I no longer am interested in these "benefits"... An my trust is Revocable.

 

[Rosedala]

Can someone explain this? The only thing that comes to mind is that when
the trust was created there was a Sch. A or something that listed the initial assets to be put in the trust. The attorney requested that we send quarterly (?) updates to him on assets removed/added to the trust. A couple of years later he requested that we stop doing that.

I concluded that the updating became too much trouble if everybody did it regularly as requested. That raised the question: what puts an asset in the trust? Is it the fact that it is titled properly in the name of the trust at the institution that holds it? Or the fact that it is on the Schedule of Assets for the trust.....a supplemental part of the trust document?

What if it is titled properly but not on the formal Schedule of Assets for the trust? This would be common if Schedule of Assets was not updated formally.

One thought is that the Schedule of Assets was merely a way for someone to know what was in the trust. Other ways include an informal list of assets or someone accessing the mail that had paper statements. And is really necessary to list every asset with account number separately? I like Marko's
idea of "umbrella" accounts which just lists by financial institution instead of each individual account. In a retirement plan,you might just list the custodian and type account rather than the 8 different funds,for example.

I can see, kaneohe, that you could tell what I feel about this trust matter through yours and your attorney's own experience, right? So....I rest my case. lol!

 

[Dash man]

I don’t really understand why all assets need to be listed in the trust, unless it’s a state requirement.
I also find it unusual that your attorney would act as a trustee. My attorney told us that is a conflict of interest. However, we gave her authority to fire and hire a trustee if necessary. It will be a trust department of a financial company.

 

[Rosedala]

MooreBonds, I'll answer between your paragraphs, ok?

Is it really that onerous to put in a few extra words when you open up a new account? How often do you do it? Also, if you simply keep a copy of the relevant sections handy to give to the institution (I think it's Section 1 and Section 8), it's not too onerous.

It's not just "a few extra words"! There's a whole lot more (you probably don't have a trust right?) I already explained it in several posts here.

The big advantage is you avoid probate. While probate isn't the greatest challenge, you have to legally retitle every single asset when you probate something, as you go through the courts, wait on judges, etc. It could cost you several % of your estate to probate it, versus spending AT MOST, what, maybe 3 hours total for the rest of your life to retitle a few accounts?

spending AT MOST, what, maybe 3 hours total for the rest of your life to retitle a few accounts?

WHAT!!! I don't know what kinds of accounts you have that you'll retitle All in 3 hours for life I already explained in answering others that in order for me to live in peace my last years, I'm willing to give the charities a little less because of probate.

The whole reason you go through the process of making a RLT is (primarily) to avoid probate. You are at Mile 20 of a 26 mile marathon. Don't quit now and say "I'm too tired to finish this race. I'll instead do the 100 mile marathon tomorrow."

Good advice for a noble action on my part but....as too already explained, I have the right to live my few last years in peace without keep working so charities get all the money without lifting a finger.


Ultimately, it's your call - but if you would be bothered by a charity wasting several % of your estate, then why waste it in the courts through needless bureaucracy?

Ultimately, it's your call

YES SIR!!! I never said to "be bothered by a charity wasting several % of your estate". On the contrary I said I won't mind (and they shouldn't either) that they'll get a little less after probate. Furthermore, I said I didn't want to make a POD OR TOD for an individual of a charity as I read from genuine sources how they cheat so that the charity doesn't get the money. Besides they don't allow these 2 means for charities. Also, I don't know why I'm answering all of this that has nothing to do with my original questions, especially this particular post......

 

[Rosedala]

I know nothing about trusts, but I wouldn't continue to work with a lawyer who became "fiercely angry" with me. My "trust" in him/her would be gone.

Thanks, I feel exactly the same way, gwraigty, problem is this is the 2nd lawyer as my good lawyer of many years retired and moved out of state. So if I go to a third one, more competent, I will have paid 3 fees!!! So though I'm enraged and do want to change this one, I feel kind of ridiculous to pay a fortune for the 3 lawyers.....

 

[Rosedala]

It has been a long time since I have read info on trusts... but I will throw something out that was told to me a long time ago..

If you plan on leaving all your assets to a charity and will not change that decision then most large charities will become trustee to a trust... IOW, it is in their interest to be trustee and wait till you pass to get the assets knowing they will get them instead of hoping you keep them in your will...

All I want to do is just tell them they've been designated as my beneficiaries as described in my Will. I don't want any other "trustees" in my life.

You will have to discuss what kind of income or principal you can take out of the trust etc. and if it can be revoked or not... that is the lawyers job...

THIS, is my contention against the lawyer I chose, sigh... I've been working nonstop to find out the questions in the internet.

BTW, unless the lawyer gave me a really good explanation on why he was mad that made sense to ME instead of HIM I would drop him....

And yes, I'm on the pickle as I'd have to take time to search for a real competent atty. this time, start from scratch and pay for the 3rd atty. as my first one of many years and moved out.