Will or Living Trust?

[meierlde]

It depends on the state and how much time the executor has to spend. In Tx there is independent administration where once appointed the only thing the court sees is the final inventory. Of course you also need to make an inventory containing also assets passed by TOD etc in order to determine if you fall under the federal estate tax (more so back when I did it as the limits were lower for filing a return) After in either case you need to file a final 1040 for the last year or part of year of the persons life. Then you either file a 1041 for the estate or for the trust (If you find an attorney who is also a cpa they can help with this all be it turbotax business does 1041s also)
The fee charged does depend on the state as some states have fee schedules for estates. The major issue is that the inventory is a document anyone can look at at the court house however so that is the privacy issue. Of course even with a trust you probably need a will to handle things that got omitted such as personal property where you really can't change title to it. Each of the probates for my parents took 6 to 9 months.

[mathjak107]

take a hard look at why you want a trust . they can be double edge swords .

as an example a revocable trust avoids probate . medicaid rarely goes after assets not probated . however a house becomes an unprotected asset in a revocable trust .

where as when held in personal name the value of the house under a limit is not counted for qualifying that is no longer the case once in the trust .

now to qualify the dollars in the house count . you may have to sell the house to qualify and then have to spend it down .

so yeah ,medicaid can't take the house if it isn't probated but now you can't qualify with it in the trust .

look back's apply when reshifting .

[Brat]

If that is true (may be state specific which is why you want a lawyer involved) title the house so that title transfers on death.

[mathjak107]

it would be state specific . in ny we have no quick claim deeds . in florida they do so you can pretty much tod it .

[Fedup]

It depends on the value too, plus whether you think you might get Medicaid.

[mathjak107]

yep , that is why you have to give a lot of thought as to what you hope to accomplish with a trust .

we have disclaimer trusts .

we got them to deal with ny's estate taxes before they went to 5 million .

basically they are transparent to us .

the surviving spouse has 9 months after death to throw a switch and split the estate in two if need be . it becomes an irrevocable trust if activated

[meierlde]

here is a list of states that allow transfer on death deeds:States that Allow Transfer-On-Death Deeds for Real Estate | Nolo.com

[Fedup]

But if you already have a will and a trust then it's best to leave it alone right? I mean you already paid the money.

[marko]

Quote:

Originally Posted by mathjak107 take a hard look at why you want a trust . they can be double edge swords . as an example a revocable trust avoids probate . medicaid rarely goes after assets not probated . however a house becomes an unprotected asset in a revocable trust . where as when held in personal name the value of the house under a limit is not counted for qualifying that is no longer the case once in the trust . now to qualify the dollars in the house count . you may have to sell the house to qualify and then have to spend it down . so yeah ,medicaid can't take the house if it isn't probated but now you can't qualify with it in the trust . look back's apply when reshifting .

AFAIK, in Massachusetts, revocable and even irrevocable trusts no longer protect assets of any kind from Medicaid scrutiny. The look-back is currently 5 years and they're considering a 10 year look-back period.

[meierlde]

Quote:

Originally Posted by Fedup But if you already have a will and a trust then it's best to leave it alone right? I mean you already paid the money.

If you live in the same state it is perhaps ok, if you have changed states a checkup by a lawyer in the state you now live in might make sense.

[mathjak107]

Quote:

Originally Posted by marko AFAIK, in Massachusetts, revocable and even irrevocable trusts no longer protect assets of any kind from Medicaid scrutiny. The look-back is currently 5 years and they're considering a 10 year look-back period.

revocable trusts are never protected . they have other uses . i don't see anything saying that irrevocable trusts are up for grabs in mass .

Using Irrevocable Trusts in Medicaid Planning

[H2ODude]

DF passed 20 years ago with a revocable trust. IIRC he and I were the trustees and I was only one named to inherit anything. His only assets were held at Fido and I just sent in a death certificate and copy of the trust and in a few days was able to transfer it over to DW and my account. Easy peasy.

One thing not mentioned here is the privacy of this method. Don't know how public probate it but would guess pretty public. No one knew what DF passed on to me except Fido. Can imagine all kinds of solicitations for services if publicly known that one just got a big inheritance.

DW and I don't yet have a R trust but will one day. Meanwhile everything jointly owned or in IRAs with named beneficiaries and alt ben. At this point only advantage I can see now is we both croak simultaneously. We do travel quite a bit but I'll just take that chance. Probably wouldn't hurt to set up and as cars or real estate turns over just title the new ones in the trusts name.

[H2ODude]

Question for the lawyers here. DF's trust was written in FL and then he moved here to NC. No real estate or cars involved. Are revocable trusts "moveable" across state lines?

[MrLoco]

Quote:

Originally Posted by Cobra9777 In our case, all assets are either jointly owned with TOD to our 2 kids, or individually owned with spouse as primary beneficiary and kids as 50/50 contingent beneficiaries (and per stirpes). Texas allows TOD on real estate but not automobiles, so the one exception is our vehicles, which are jointly owned but no TOD... and I suppose household goods. But I'd estimate that 98% of our net worth would transfer directly to the joint owner or beneficiary. We also have a will, including living will and durable POA. Is it still necessary or preferable to have a trust under these circumstances?

No. What you are doing is fine. In fact a TOD/POD designation on accounts will usually supersede whatever is written in a will. In fact if TExas allows TOD on real estate, as you said, this covers 98% of your assets. And some day you will probably give up driving so the cars will not be an issue.

YEars ago one was not able to designate accounts as TOD/POD so lawyers pushed trusts to avoid probate. And today lawyers will still push trusts for whatever reason they can come up with because.....they are lawyers! And that is how they get paid.

[GrayHare]

Regarding involving an attorney to draw up these documents, it's very difficult to know whether you are getting what you want. Communication is always a challenge, and legal documents are often difficult reading. You won't know if you got the trust / will / etc. that you intended until it's too late, and that can leave your beneficiaries with a rude surprise and lots of work. If you want to proceed and you want it done as you wish you probably need to involve multiple unaffiliated attorneys, one to draw up the document, and another (or two) to review it and check that it accomplishes what you intend. It's a lot of time and money, but a bad trust can be worse than none at all, and you know who the attorney will blame if something is wrong in the document.

[Fedup]

How easy is it to draw up a cheap TOD? I'm thinking of my sister who has no will.

[mathjak107]

tods usually are just beneficiary forms on accounts . be careful though not all states accept them on brokerage accounts . for a while ny did not . community property states can present issues .

[Fedup]

Quote:

Originally Posted by mathjak107 tods usually are just beneficiary forms on accounts . be careful though not all states accept them on brokerage accounts . for a while ny did not . community property states can present issues .

I'm think of real estate. She told me listed us as beneficiaries already on her IRA account.

[marko]

Quote:

Originally Posted by mathjak107 revocable trusts are never protected . they have other uses . i don't see anything saying that irrevocable trusts are up for grabs in mass . Using Irrevocable Trusts in Medicaid Planning

This is where I got it: MassHealth and Irrevocable Trusts | Pabian & Russell LLC | Boston Law Firm | Elder Law

Excerpt:

"Unfortunately, MassHealth (the Massachusetts Medicaid program) has decided to redefine how much control it will allow clients to retain. Over the past few years, MassHealth has been rejecting irrevocable trusts that were deemed acceptable in the past. What is even more outrageous is that in a few circumstances, MassHealth has taken a second look at some trusts, terminating benefits for current MassHealth recipients whose trusts had previously been accepted."

[karen1972]

One thing I'm not clear on is if a living trust would fix one other problem.
So my BF is named designated beneficiary on everything and we hold the house in joint tenant, so the only non-named items are my 2 cars and household personal belongings so I was thinking it wasn't a big deal not to have either.

However, my mother said, if my BF and I were to be in a car accident, she understood the law to be that should my BF outlive me (I die at the scene, he dies on the way to the hospital), the law would declare him my beneficiary and then his family heir to everything.

So then I wonder if a trust would resolve that such that it would revert back to my family. I want everything to go to my BF, but if he doesn't use it all, I do not in anyway want it going to his family,