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Revocable living trust. Does One Need It?
Old 03-13-2005, 06:32 AM   #1
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Revocable living trust. Does One Need It?

Recently, in a conversation with a friend, he has it and strongly recommended that I get a revocable living trust.

I currently not married or have any children (that I know of).

He said having a lawyer set it up could cost to $2k to $3k. Ouch...

Anyone have it?

Any tax advantages for me?

Outside of the possible cost, I would love to hear the pros and cons.

MJ
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Re: Revocable living trust. Does One Need It?
Old 03-13-2005, 08:33 AM   #2
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Re: Revocable living trust. Does One Need It?

Nolo has a good summary on their website.

You could also read library copies of Nolo's books on the subject ("Plan Your Estate" & "Make Your Living Trust") and consider the nitty-gritty "why should you have one" issues (instead of the mechanics). The books are clearly written & very readable but quite detailed.

A caveat for Unclemick-- Nolo has abandoned the state of Louisiana since their laws are based on the Napoleonic code. (The rest of the country is either more advanced or way behind but in either case is much easier to write about.)

Without knowing your net worth I'm thinking "Naaah". Generally the idea is to skip estate taxes, whatever they'll be from now through 2010. I thnk it's impossible to plan beyond 2010 until Congress is bribed makes up their mind on the situation.

We're married with a kid and we could theoretically someday be subject to estate-tax issues but we still decided "No." Our wills set up marital-deduction trusts but we're not going to bother with the living trust hassle until after 2010 (and then only if we're piling it up faster than we're spending it).

FWIW, $2-3K is a bargain compared to probate costs. But then you don't have to care about the latter!
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Re: Revocable living trust. Does One Need It?
Old 03-13-2005, 06:47 PM   #3
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Re: Revocable living trust. Does One Need It?

Lyn and I have one but I think it was probably a
waste in Texas. *We will never have enough
financial assets to take advantage of the estate
tax sheltering and probate in Texas is not very
expensive or difficult unless your estate is very
complex. *I am not an expert by any means and
you should read Nord's links, but a simple will,
power of attorney and health care power of attorney
are probably enough for a single person with no
children.

Cheers,

Charlie
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Re: Revocable living trust. Does One Need It?
Old 03-13-2005, 07:42 PM   #4
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Re: Revocable living trust. Does One Need It?

Thanks guys.

MJ
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Re: Revocable living trust. Does One Need It?
Old 03-14-2005, 07:06 AM   #5
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Re: Revocable living trust. Does One Need It?

MJ, as you know each situation is different so it might make sense to sit down with a good estate planner and work on an estate plan which may or may not include a trust.

In some states revocable trusts make a lot of sense because of the probate difficulties. For example, these kinds of trusts are very popular in Florida.

Some like trusts because you will not have delays occasioned by the probate process as the trustee can act right away.

On the other hand, they can be a pain in the a** as you have to remember to put assets you acquire from time to time in the trust. You have to file two tax returns each year, one for the trust and one for you.
Some assets, such as your home maybe shouldn't be in a trust because it might impair a homestead exemption.

I would talk to an estate planner about what is the best plan for you.
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Re: Revocable living trust. Does One Need It?
Old 03-14-2005, 07:41 AM   #6
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Re: Revocable living trust. Does One Need It?

Martha, I hope you are wrong about needing to
file two income tax returns in the case of a
revocable living trust. Our trust is under my
SS number and we just file one return.

I hope you are resting comfortably and keeping
hubby well supplied with "honey do" requests.


Cheers,

Charlie
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Re: Revocable living trust. Does One Need It?
Old 03-14-2005, 08:01 AM   #7
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Re: Revocable living trust. Does One Need It?

A revocable living trust does not require a separate social security number. *

The primary reason for the trusts for my family members is the ability to appoint a person to manage your resources when you cannnot. *It isn't necessary for a trustee to pack along a POA ever time financial decisions are made. *It is cheaper to resolve when you pass on.

Your lawyer is way too expensive. Shop around.

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Re: Revocable living trust. Does One Need It?
Old 03-14-2005, 08:17 AM   #8
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Re: Revocable living trust. Does One Need It?

Yeah, I probably was wrong. I have dealt with some trusts with separate tax id numbers and didn't think through whether it is necessary or not. I think the situations involved banks as co-trustees so that probably was why they had their own tax id number.
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Re: Revocable living trust. Does One Need It?
Old 03-14-2005, 08:21 AM   #9
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Re: Revocable living trust. Does One Need It?

On the lawyer cost, I believe you can save a lot of money in the long run by using a very good estate planner for trusts and the like to help in setting up a long term plan. This may cost two or three thousand but they won't eff it up. Our estate planners end up fixing a lot of messes caused by poor planning.

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Re: Revocable living trust. Does One Need It?
Old 03-14-2005, 02:35 PM   #10
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Re: Revocable living trust. Does One Need It?

An attorney worth the 2 or 3 Thousand should do a complete estate planning job. By that I mean writing your will, medical power of attorney, living will, create and fund a revocable living trust, and discuss with you your retirement finances. The paperwork, unless you have businesses to resolve, should be routine. The attorney should also give you a list of questions and a reading list before your conference so that you have had a chance to think through your goals.

This person should be a mature individual, one who knows trouble when they see it and has fixed some. They should be able to give you the names of fee only financial planners who have done a good job for others. They should be able to discuss the ins and outs of long term care policies, and be familiar with continuing care facilities and their contracts.

You should get a copy of all of your life insurance policies, the survivors listed on IRAs, realestate titles as a start. You might as well get a copy of your auto, home and umbrella policies so that you can consider their coverages.

Each of us is convinced that we have all bases covered. Some of us know that life happens. A periodic estate planning checkup is wise.
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Re: Revocable living trust. Does One Need It?
Old 03-14-2005, 04:31 PM   #11
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Re: Revocable living trust. Does One Need It?

Agreed Brat.
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Re: Revocable living trust. Does One Need It?
Old 03-15-2005, 08:42 AM   #12
 
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Re: Revocable living trust. Does One Need It?

Hello MJ,

I considered a Revokable Living Trust and decided to wait. I'm 40sh and am in the same situation as you (no wife/kids). I decided to make a Will, Healthcare Directive, and Durable Power of Attorney for Finances using Nolo's Quicken Lawyer program. It took about 1 hour to do. The resulting documents are clear for my simple situation.

--John
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Re: Revocable living trust. Does One Need It?
Old 03-15-2005, 02:29 PM   #13
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Re: Revocable living trust. Does One Need It?

Suppose you suffer brain injury in an accident (automobile, sporting activity, adverse result of a medical procedure) how will your FINANCIAL affairs be managed? Can the person you designate pay the bills and sell property without having a court appoint a conservator?

Modern medicine is keeping us alive to preserve the posibility of recovery and those who don't recover linger a long time.
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Re: Revocable living trust. Does One Need It?
Old 03-15-2005, 07:57 PM   #14
 
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Re: Revocable living trust. Does One Need It?

Quote:
Suppose you suffer brain injury in an accident (automobile, sporting activity, adverse result of a medical procedure) how will your FINANCIAL affairs be managed? Can the person you designate pay the bills and sell property without having a court appoint a conservator?
This issue is handled by my Durable Power of Attorney for Finances.
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