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Old 06-17-2014, 12:33 AM   #21
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Just used an estate lawyer to setup revocable living trust (and living will, power of attorney and pour over will). Cost $4000 as they also did rental house deed transfer docs.

Our setup is about as simple as possible with 3 kids. The only driver was to avoid CA probate fees upon second death. Offers option to create irrevocable bypass? trust at time of first death that may be useful to avoid death taxes (currently well below limit). Presumably there would be a tradeoff between capital gains step up basis advantage and estate tax limit trigger... the 9? month option lets them do the calc at time of death valuations.

No asset protection provided to us by this setup. Upon second death, $ are divided into 3 trusts for the 3 kids (totally under their individual control) which runs until they are 50 and I think might give them a bit of protection from their spouse/divorce/lawsuit.

I had done a bit of prep reading, but learnt a lot from the process. I do a lot of teach myself stuff, but I think it is fairly easy to miss key points... so paid for expert in this case. Kids currently do not have spouses, and apparently if kid dies before us, the surprising (for me) default is for $ to go to their offspring and not their spouse (obviously their spouse would administer offspring $ in that case anyway so perhaps no material difference).
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Old 06-17-2014, 03:32 AM   #22
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the problem with a/b trusts are unless you got a lot of money ,far more then you think your spouse will need it is to hard to predict what can be decades down the road and there are no do overs.

we found a disclaimer trust to be a far better way of going than an a/b trust which locks the spouse out with restrictions to far in advance of things playing out..
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Old 06-17-2014, 06:44 AM   #23
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I never heard of a disclaimer trust, but I am going to check into it. I tried one of those nolo do your own trust a few years ago and found that with the way things change so fast it really does need update fairly often.
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Old 06-17-2014, 07:48 AM   #24
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thanks for all the good advice and suggestions on books. I will check these out. a lawyer I was talking to was saying an irrevocable trust is the best way to go but I had my doubts. I notice none of you have the irrevocable trust, so I might be getting the wrong advice.
I have set up both revocable and irrevocable trusts. And, you can set up a revocable trust that becomes irrevocable upon your death. And, remember the possibility of "elder" trust needs. Your trust can include instructions based on your inability to manage your own affairs. I really would suggest spending a few hours with an estate planning attorney after reading the very best book I have read on any subject; "Estate Planning Smarts" by Deborah L. Jacobs. It's so good I bought one for my very competent lawyer and CPA. And, some States tax assets distributed through a will but not a trust. Each State has its own laws, you really need professional help provided by an estate planning lawyer working on an hourly basis. A lot of professional planners will do if "for free" but they want to sell you commission products as part of your plan. Your financial position sounds exactly like my in laws.....they read the book, did their plan and are very, very, happy. I think their cost was about 3k. Good Luck....
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Old 06-18-2014, 04:02 AM   #25
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I never heard of a disclaimer trust, but I am going to check into it. I tried one of those nolo do your own trust a few years ago and found that with the way things change so fast it really does need update fairly often.
a discalimer trust is a trust where the surviving spouse can ELECT to either take all the money up to 9 months after the death of the spouse or disclaim it and let it convert in to what is basically an a/b trust at that time.

it is mostly used to get 2x the state exclusion for estate taxes.

if the trust option is selected the surviving spouse is limited to all income and 5% of principal a year but there are exceptions where more money can be taken.
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Old 06-18-2014, 06:50 AM   #26
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a discalimer trust is a trust where the surviving spouse can ELECT to either take all the money up to 9 months after the death of the spouse or disclaim it and let it convert in to what is basically an a/b trust at that time.

it is mostly used to get 2x the state exclusion for estate taxes.

if the trust option is selected the surviving spouse is limited to all income and 5% of principal a year but there are exceptions where more money can be taken.
mathjak.........what is the default consequence if survivor , for whatever reason, does not elect or disclaim? Pros and cons of each?
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Old 06-18-2014, 04:29 PM   #27
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if the spouse doesn't accept the trust then it is business as usual. she takes all the money out and it is a done deal. everything is hers .

if she elects to split the estate then 1/2 the estate goes in to a trust and 1/2 is hers.

she gets 5% of the principal a year and all income with provisions for more money for certain things.

game plane of the trust? 2x the amount allowed by your state can pass estate tax free.
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Old 06-19-2014, 06:31 PM   #28
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We have a living revocable trust set up with an incapacity clause. Got if from Suze Ormans site. Downloaded it and filled in the blanks (after reading of course) had it notarized. Was all free as she gave out a code on her show one night to download her whole package for free .
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