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Re: Attorney Fees to Settle Estate
Old 09-22-2006, 09:20 AM   #21
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Re: Attorney Fees to Settle Estate

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Originally Posted by mathjak107
Can you explain how it would work in an ir-revocable or marital trust* ?
This gets complicated.* Why do you think we need lawyers?* * If I understand correctly, and I am not an estate planning lawyer, there are several types of trusts you can use for estate and tax planning.* If you have significant assets and are worried about estate taxes, you can use a bypass trust or credit shelter trust, which will allow both the husband and the wife use their estate tax credit fully.* For example, say you have 2 million and your wife has two million.* You die, she inherits your 2 million.* No estate tax is paid when assets go to the spouse.* Now she has 4 million.* She dies, but she can only shelter 2 million from federal estate tax. If you leave your 2 million to the bypass trust, it isn't taxed by the feds when you die because of the 2 million exemption and isn't taxed when she dies because it isn't hers, though she might have some rights to income under the trust.

Another variation in the QTIP trust, which is sometimes also used by the wealthy with a bypass trust to help minimize taxes.* If you use a QTIP trust, your estate isn't taxed.* However, your wife's estate would be when she dies. Under this trust, your wife would get the income and odds are your children would get the trust assets when your wife dies.* Taxes would be paid at that time.* You might give some of your assets to the bypass trust and some the the QTIP.

There are other variations and other trusts that are used for "rich people" estate planning.* or example, there are some states that allow trusts to go for more than one generation.

There are also simple revocable trusts used to avoid probate or to manage assets when your children are young.* These types of trusts do not avoid estate taxes. And, one way or another someone will pay taxes someday.

EDIT: terms here, like bypass trust and QTIP trusts are used slightly differently in different areas, but both refer to trusts set up to allow spouses to have some degree of access to the trust, with what left going to the kids.
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Re: Attorney Fees to Settle Estate
Old 09-22-2006, 10:13 AM   #22
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Re: Attorney Fees to Settle Estate

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Originally Posted by UncleHoney
In Ohio, state law requires attorneys to charge by the hour.* My Mom's estate ($500K) cost about $7500 in attorneys fees and court costs.
Really!?* *We were charged a flat fee of $6,000 to settle my mom's estate in Ohio.

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Re: Attorney Fees to Settle Estate
Old 09-22-2006, 12:27 PM   #23
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Re: Attorney Fees to Settle Estate

MARTH........
I was wondering about the cost basis in the irrevocable trusts.

I had heard something about the home retaining the origonal cost basis of the day it went into the trust and keeping that basis . when passed on to the kids when it came out of a particular trust but i missed the beginning of the conversation.
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Re: Attorney Fees to Settle Estate
Old 09-22-2006, 02:14 PM   #24
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Re: Attorney Fees to Settle Estate

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Originally Posted by mathjak107
MARTH........
I was wondering about the cost basis in the irrevocable trusts.

I had heard something about the home retaining the origonal cost basis of the day it went into the trust and keeping that basis . when passed on to the kids when it came out of a particular trust but i missed the beginning of the conversation.
This stuff gets messy, I probably shouldn't have touched it in my previous post, which had too general to be helpful.* To illustrate, say you have assets go into a trust when you die and the assets are part of your taxable estate.* The basis will be the value at your death.* Say that your wife gets income from the trust and when she dies, the trust assets are distributed to the kids.* What happens if the trust increasedin value?* I think that capital gains could be trapped in the trust and taxes might have to be paid on those gains.

I am not sure about this stuff, and the answers depend on how and what kind of trust you set up.* But depending on the situation, the answer to your question could be yes.

There was an entire semester course in law school on taxation of trusts and estates.*

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Re: Attorney Fees to Settle Estate
Old 09-22-2006, 02:52 PM   #25
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Re: Attorney Fees to Settle Estate

I had a feeling it was far more complicated than the usual advice of throwing the house in a trust to avoid probate expenses. Maybe the probate expenses may be cheaper than not getting a stepped up basis for the kids .
Interesting research project for someone who may have time.


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Re: Attorney Fees to Settle Estate
Old 09-22-2006, 02:59 PM   #26
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Re: Attorney Fees to Settle Estate

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Originally Posted by mathjak107
I had a feeling it was far more complicated than the usual advice of throwing the house in a trust to avoid probate expenses.* Maybe the probate expenses may be cheaper than not getting a stepped up basis for the kids .
* *Interesting research project for someone who may have time.


MARTHA note the caps and spaces ?* proud?
Yes, thanks so much.

Well you could have the house put in a revocable trust. It will be part of your estate so it would be taxed. But there wouldn't be a probate. And there would be a stepped up basis. . .
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Re: Attorney Fees to Settle Estate
Old 09-22-2006, 06:28 PM   #27
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Re: Attorney Fees to Settle Estate

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This gets complicated.* Why do you think we need lawyers?* * . . .
Actually, I think it's complicated because we have lawyers. They were instrumental in writing the laws.
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Re: Attorney Fees to Settle Estate
Old 09-23-2006, 10:05 AM   #28
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Re: Attorney Fees to Settle Estate

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Actually, I think it's complicated because we have lawyers.* They were instrumental in writing the laws.* *


Nah, it gets complicated because people don't want to pay taxes and they want to continue to influence their families and the world after they die.
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Re: Attorney Fees to Settle Estate
Old 09-23-2006, 10:18 AM   #29
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Re: Attorney Fees to Settle Estate

If ignorence of the law is no excuse than why do we need lawyers?
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Re: Attorney Fees to Settle Estate
Old 09-23-2006, 07:26 PM   #30
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Re: Attorney Fees to Settle Estate

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Originally Posted by mathjak107
If ignorence of the law is no excuse than why do we need lawyers?
Because somebody needs to write those long, long sentences that have so many words that when you get to the end, you can't remember the beginning
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