living trust?

[bbbamI]

Forgive me for bringing up a topic that has been discussed before. I looked at the topic in the archives, but am still confused.

DH and I have all funds and assets in both of our names except for my annuity and his 401k and pension. We are listed as beneficiaries on all documents. However, I realized that if DH were in a coma or endured head trauma, I might have a problem getting funds or selling property.

We do have a will and a directive to physician, but I feel that this may not be enough.

Any suggestions are appreciated. By the way, we have no children.

[grumpy]

Sounds like you each need durable power of attorney for the other.


Grumpy

[bbbamI]

Thanks Grumpy! That thought never occurred to me.

[Moemg]

Do durable power of attorneys ever expire ?

[SteveR]

A POA is a good choice for your specific concern...i.e., one partner incapable of making a financial decision or transaction.

However, you should also consider what would happen if you both were to die; especially if at or near the same time. Your will may not be enough to assure your dependents (if any) or your decendents would receive what you intend. If children and or grandchildren are in the mix a Living Trust might be your best bet. This will not replace a POA but will be better than a will and will avoid probate and most claims on the estate. It is also a good tool to use to reduce inheritance tax for the next generation who might inherit your estates.

Don't forget your Healthcare POA as well. I had to use it with my late wife and I cannot tell you how much it meant to me to be able to take action in a situation that was clearly all downhill. It saved her hours or maybe days of additional pain and suffering and that is priceless to me.

[Goonie]

Last year I started working on getting my estate, and my Mom's estate all in order. Reading up on all the stuff (wills, POAs, living trusts, etc, etc,) I came across "Plan Your Estate" by Denis Clifford & Cora Jordan, published by NOLO Press. It is fairly thorough on most all topics related to estate planning, and has saved us a lot of work....and $$$.

Though it's still a "work in progress", we both have just about everything in order now, and it was all pretty darn simple, and straight forward. All we really have left to do is finallize the revocable living trusts and transfer the stuff into them. (we also used Denis' book "Make Your Own Living Trust")

[Brat]

I really like revocable living trusts. It saved our parents a lot of grief and money as they aged. DH and I have one.

My parents had a joint trust. Because they always made decisions jointly it was written so that expenditures over and above living expenses must be joint decisions or concurred by two other contingent trustees, same with changing the trust provisions. This saved their finances as Dad had a brain tumor which changed his personality (he became manic). This also slows down a trustee who wants to grab the ball and run with it.

I don't recommend executing your own living trust. My parents first tried that and I think Title 29 CFR was shorter! Draft up something so that an attorney will know what you are thinking about, but take it to someone who has written a lot of those things over several years. They have seen lots of life's s**t and can anticipate problems that wouldn't occur to you.

[bbbamI]

Thank you all for replying. Looks like I've got some research to do.

I knew our original will was in our safety deposit box, but earlier tonight I remembered we have a copy here. Along with the will and directive to the physician was a POA for healthcare issues. However that POA doesn't seem to cover what we need in regards to getting to some of our financial accounts/being able to sell property if one of us is incapacitated. We talked to a Fidelity rep tonight about a couple of other issues and then asked him what they would need if I needed to get to hubby's accounts. He told us we would need yet another POA.

No children or grandchildren involved, so we're going for a simple plan. Since the bulk of our funds have beneficiaries named, that shouldn't be a problem with probate...I assume.

Moemg.....The Health POA we have has no expiration date.

SteveR.....I'm so sorry for your loss. I can't begin to imagine how difficult your situation was. I do believe it would have been much worse had you all not legally prepared for this. I guess that's why I'm trying to get everything in order now.

Thanks again.

[Brat]

Financial institutions are really anal about POAs!!!

If you link your Fidelity accounts to a checking account and disburse from Fidelity to that account Fidelity is not the wiser (until you tell them or they receive notice from SS, natch). This assumes that you have internet access to the said Fidelity (or other institution) account.

[Nords]

Originally Posted by Moemg

Do durable power of attorneys ever expire ?

Only when you really need it for something and the bank gets anal about it.

I've seen recommendations that POAs should be redrawn every two years, but that's probably coincidentally the interval at which bankers & lawyers upgrade their boats and need a steady flow of POA-drafting income...

I'm with Brat. Have everything linked to a checking account that you either share the password to or have authorized use of, and what the bank/brokerage doesn't know can't be used against you.

Same thing with a safe deposit box-- I wouldn't let the bank know that there's a problem until after I'd cleaned it out with my own key.

[donheff]

Originally Posted by Brat

I really like revocable living trusts. It saved our parents a lot of grief and money as they aged. DH and I have one.

I don't recommend executing your own living trust. My parents first tried that and I think Title 29 CFR was shorter!

DW and I just signed revocable living trusts. The primary purpose was estate planning. It involved making sure our assets are as evenly split as possible so our home is in DWs name and our weekend house in mine. We were able to use a top-notch estate attorney at DWs office. The result is comparable to 29CFR and more difficult to comprehend. It is like reading about relativity, you get an occassional aha moment when you think you understand but the next time you come back to it you have to start over There are a lot of things an attorney will check on that you might not think of yourself such as "bimbo/mimbo" clauses to make sure your estate doesn't go to a kid's ex-spouse.

[Martha]

I think revocable living trusts are a PITA as an estate planning tool. You have to make sure your assets are in the trust and people are always forgeting to put assets in the trust. But in states where probate is expensive or takes an extended period of time they make good sense. For other states, there are other ways to make sure each spouse has or can have their own assets to take advantage of the estate tax exemptions.

On the otherhand, the revocable living trusts are handy if you become incompentent. They have worked well for children of elderly parents who are managing their parents affairs. However, we don't currently have a revocable living trust because of the PITA factor and instead have a trusted friend hold a POA for us. I know a very wealthy person who does everything financial through his "advisor" who holds a power of attorney. He buys and sells real estate estate in many states, often for millions of dollars, he borrows money, again often millions of dollar. He buys and sells stock. It works fine for him. But there are many things to consider and it is good to read up on the issues and then talk to an estate planner about what is best for you.

Financial institutions vary, but I have had no problems with most banks honoring powers of attorney. Wells Fargo, US Bank, and a number of smaller banks have been good provided you use the format approved by your state of residence. Sometimes they require an affidavit from the holder of the power of attorney that it is still in effect and has not been revoked. This certainly will be required if you sell real estate using a power of attorney. If you are doing POAs, make sure you do a bunch so you can give up originals as needed.

[Nords]

Originally Posted by Martha

However, we don't currently have a revocable living trust because of the PITA factor and instead have a trusted friend hold a POA for us.

We dithered about this for years of research & reading and finally decided to take another look when we were a lot older. We already have wills, POAs, medical directives, and so forth.

You've confirmed our thoughts!

[SteveR]

Multiple marriages and kids from different parents makes financial planning a mess if you don't lock in what you want to happen. Trusted friends can die or become not so trustworthy and your intentions would be lost. Will are only good for that up to a point and are no help with generation skipping taxes for large estates.

We went the Rev. Trust route because we had complex inheritance issues we wanted to address and we wanted it locked in stone after we are no longer around to check on things. Taxes would be an issue with our estate so we also wanted to be sure to keep the Gov. out of our kid's pockets as much as possible. We have worked too hard to get the pile and to give most of it away to the taxman is a crime.

[cute fuzzy bunny]

Question: I think I remember something about creating a revocable living trust where the assets had to come fairly evenly from different "contributors" and that creating a trust where most of the assets came from one person in the family posed some issues...or is this just a california thing?

[wabmester]

Originally Posted by Cute Fuzzy Bunny

Question: I think I remember something about creating a revocable living trust where the assets had to come fairly evenly from different "contributors" and that creating a trust where most of the assets came from one person in the family posed some issues...or is this just a california thing?

When you create the trust, all of the assets become comingled. So, if one spouse came into the marriage with all of the assets, the trust basically wiped out half your assets in the case of a divorce. Some people will do anything in the name of love.

[cute fuzzy bunny]

ehhh....what I think I saw was that (at least in the document I read and/or perhaps just in california) that both spouses (and other contributors of assets) all had to have something significant to 'put in'.

[Brat]

Originally Posted by wab

When you create the trust, all of the assets become comingled. So, if one spouse came into the marriage with all of the assets, the trust basically wiped out half your assets in the case of a divorce. Some people will do anything in the name of love.

Only if you put them all in the same trust. I know of no rule that says you can't have more than one. Different trusts can have different grantors. I agree that assets in any one trust become commingled.

[2B]

Originally Posted by Martha

This certainly will be required if you sell real estate using a power of attorney. If you are doing POAs, make sure you do a bunch so you can give up originals as needed.

We are in the process of selling my in-laws property. The title company wanted to call them up and make sure they had granted DW the POA and that they wanted to sell their property. DW has finally got it. She told them that she had a legitimate POA and she was sure that if they talked to her parents they wouldn't want to sell. She told them he has Alzheimer's and she has dementia. That's why she has the POA. They finally agreed that all they really need to know is that on the day of closing both are still alive. They will take the word of a representative of the nursing facility.