10 mistakes people make when doing a living trust.

[zuki]

has anyone heard the ad for this commercial on talk radio ?

i have yet to hear the program and want to know what these mistakes are.


on am/talk radio the commercial runs.

al wayland (?) or something with tips to invest/including the ten mistakes people make with trusts.

[zuki]

anyone have any advice ?

i just received my packet.

[MRGALT2U]

Is your last name zuki? If so, do you have a spouse
(or boy) named "Sue"?

JG

[Martha]

has anyone heard the ad for this commercial on talk radio ?

i have yet to hear the program and want to know what these mistakes are.


on am/talk radio the commercial runs.

al wayland (?) or something with tips to invest/including the ten mistakes people make with trusts.

Zuki, I don't listen to talk radio. When I hear phrases like "ten mistakes people make with trusts" it feels to me like it is just a sales pitch, not necessarily an inclusive list of what people should watch out for.

[Patrick]

has anyone heard the ad for this commercial on talk radio ?

i have yet to hear the program and want to know what these mistakes are.


on am/talk radio the commercial runs.

al wayland (?) or something with tips to invest/including the ten mistakes people make with trusts.

*

Zuki, I haven't heard what his 10 mistakes are, but I do know what the #1 mistake is for a revocable living trust: NOT FUNDING THE TRUST. What funding the trust means is that you put ALL your assets into the trust. Transfer title to your vehicles and real estate, change your bank and investment accounts over to the trust name, etc. If you don't put the assets in the trust, they are not covered by the provisions of the trust and will be subject to probate when the grantor dies. We had a very painful experience with this when my mother died. She had transferred most of her assets, but forgot about her stock. It took 2 1/2 years and several thousand dollars in attorney's fees to get control of the stock so we could sell it.

Good luck,

Patrick

[zuki]

is the transfer of everything into the trust done at the start by the attorney ?

also how does this affect the cost of things like car insurance rates and home insurance ?

wondering .

thank you

[Brat]

The day-to-day administration of a revocable living trust doesn't change what you would do if it didn't exist. You use your SSN, you pay taxes on earnings, and it doesn't change the tax treatment of the sale of your home. Its major advantage is administration when you can't (a trustee can step in without a court order), and disposing of assets after you die. If you own a lot of valuable stuff it can split into parts for estate tax reasons.

You can re-state your trust if you want to make changes, you don't have to create a new trust and fund it.

There are older threads on this board were we have shared our experiences with trusts. DON'T VIEW TALK RADIO OR JUNK MAIL AS RELIABLE SOURCES OF INFORMATION! Go to the library.

Lastly, this isn't a do-it yourself document or one that you should copy from a friend (there is a story behind that comment). If you think Medicaid is ever a possibility you may want to meet with an attorney who specializes in elder issues. There are also special needs trusts, which are completely different creatures. Hire a lawyer who prepares revocable living trusts routinely but shop around. Fee and quality are not necessarily correlated.

[cfcf]

someone correct me if I'm wrong:

I believe that IRA's with named beneficiaries don't need to be in the trust as they will pass to heirs without going through probate.

There may be some reason to put them in the trust if the estate value is large enough, though?

[smooch]

I'm interested in hearing the reply to cfcf. My first thought is that, for medicaid planning, everything should be in the trust. Can't medicaid take IRAs, 403(B)s, and just about everything else?

[unclemick]

There is a five year look back period on trusts. Three years on other stuff. Most states have estate recovery units for Medicaid. Husbands and wives have another set of rules.

Rule of thumb - if you have control of it in any way - it belongs to Medicaid.

In my 88 year old widowed Mother's case - she is dead broke except for SS and a small pension.

There many things a good elder care/estate lawyer can do to help - I don't like lawyers(prone to do it yourself first) - but in this case

[MRGALT2U]

Hello unclemick! I agree. I have spent an absolute
fortune on attorneys over the years. I try to avoid them. But, if there was
ever an area where you MIGHT get your money's worth
it's the eldercare/trust/LTC/Medicaid stuff. Once we
get to that point, I will be spending some time
(and money) in that area. For now, no point in starting
as my parents don't understand that there might be
a problem and I dare not bring it up.

JG

[Newell]

My wife and I just recently had a trust drawn up - actually an A/B trust for me, A/B trust for her as well as a will for each of us. IRAs and 401ks were part of the trusts in an arrangement where we are each other's primary beneficiaries but with the right of partial refusal in order to fund the A/B trusts to take advantage of the tax free transfers to grandchildren (up to the current amount allowed by law. Only the part of the IRAs/401ks that are partially refused pass through the trust.

It all seemed very complicated at first - especially the IRA/401k part - but seems to make sense the more I think about it. It is certainly more complicated than can be explained in a paragraph or two here.

[MRGALT2U]

Hello! As one "oldbykur" to another, what did all that cost, if you don't mind sharing. I have a bunch of
"lawyer work" that I keep putting off, partly due the the
bills I know will be run up.

JG

[Newell]

MRGALT2U, the total cost was $2,000. The law firm specializes in estate planning.

We had two objectives. One was for both of us to be able to pass the maximum amount of tax free money to our grandchildren and the second was to hold any inheritance that our grandchildren might get in a trust until their 35th birthday.

Personally, my objective is to die broke, but I haven't convinced my better-half yet.

[zuki]

i am having a law office do the trust.

i just don't want to overlook something or leave something out which cost money needlessly.

thanks

[kenepp1]

I am planning to do a Living Trust in the next few months and have been investigating them. I had an Estate Planner give us a presentation. I also have an upcoming planning session as part of the Crown Ministries study we are doing. A Estate lawyer at our church will present it and give us a major discount. Most fees run about $1000 to $1500 (Arizona).

The few things that I have learned (or think I have anyway) is that anything owned as joint custody automatically is transferred without a will (bank accounts, mortgage, etc). Of course the danger is if both die at the same time. One book specfically said not to put 401/IRAs into the trust, but most did not mention it. I think the one worried about the cost basis of the asset at transfer. If outside the trust it had a new cost basis at the time of transfer and reduced taxes. If in the trust it had a cost basis when it was bought. At least that was what I remember. Another estate planner said anything less than $30K (automobile) should not be in the trust, but wasn't specific about why. I could see it might give concern to a buyer to see a trust's name on the tittle. It also may be due to a short term asset. You add those to a pour-over will.

In funding the trust, one author warned that some mortgage companies (and other firms as well) do not like to put the asset in the trust's name.

I am surprized more of you don't already have Living Trusts set up. It will keep money out of the lawyer's pocket and transfers assets quickly.