Trust or Not?

[livingalmostlarge]

Do you guys have a trust? If so what kind? Why did you do it? What are the benefits and the cons? Did you do it before death?

Anyone do a special needs trust? If so why?

 

[Sunset]

I trust in God.

I don't have a trust, but if I wanted one, I'd do it before death as it's harder to do after death ..

 

[Koolau]

In God we trust. All others pay cash.

 

[DrRoy]

We have a living trust so that our assets will not need to pass through probate court.

 

[Rjhasti]

yes if you have a sizable assets in a IRA or 401k etc then you should have a trust. You tube living trusts and listen to at least 5 YouTube.
then go to freewill.com to do a free trust. Also lawdept.com or legal zoom.

then you can make final decisions from there.

 

[sengsational]

Everything is TOD to the other spouse. If we both go down in a plane crash, the kids get it. The will is a formality.

 

[folivier]

We're in the process of doing a living trust with a local attorney. Reasons are to avoid probate time and costs. One property we own is in another state so avoiding that probate makes sense. Also we want to make certain our assets pass onto our grandchildren rather than the possibility of one of our sons remarrying and his inheritance being diluted. Other personal reasons also.

 

[OldShooter]

Wrong question. Trusts are tools to implement estate plans. To have or not have a trust is a completely meaningless question outside the context of an estate plan.

 

[Midpack]

We have a living trust. Main reason is to make it easier on heirs, avoid probate. When my parents died, their trust made life MUCH simpler for my sister and I.

 

[Montecfo]

Everything is TOD to the other spouse. If we both go down in a plane crash, the kids get it. The will is a formality.

Same. Also the house. If we all die in a plane crash then it goes to nieces and nephews and probate would be involved.

I think when you may need a trust is when you have multiple spouses, families and non-financial assets.

After you pass, it might be a good idea to have a trust so that your estate doesn't go to the pool boy, bypassing your kids.

 

[cathy63]

We set up a revocable living trust as part of our estate plan. Our tax deferred accounts will pass through beneficiary designations but all real estate and taxable brokerage accounts are in the trust. When we set this up, the goals were:
- avoid probate, which is expensive in California
- have an adult trustee to dole out funds to our then minor child at appropriate times
- maintain privacy over the dollar amounts involved

Our daughter is now a functioning adult and we are going to meet with the estate attorney this year and update the plan. We'll discuss revoking the trust and switching to ToD beneficiaries on all properties and accounts; but even if we end up keeping the trust, we want to delete the part that would have gone into effect if we died before our daughter was old enough to handle money on her own.

 

[frank05]

All my assets are in the living trust except for my IRA, where the lawyer said in my state designating the heirs in the IRA is Ok. A downside of the trust is all the financial institutions I use change your account number when you make the update. This results in a lost history and in the case of stocks may result in the loss of purchase price.

 

[sengsational]

Everything is TOD to the other spouse. If we both go down in a plane crash, the kids get it. The will is a formality.

By the way, we had the opportunity to test this in NC. The FIL's will didn't have anything except the personal effects (everything else was TOD, and the cars were sold to the kids already). Walked in the court house with the original will in hand, expecting the worst. The clerk said "you're the executor" to my wife, she said yes. Papers signed, and we left 10 minutes later. No cost, no fees. Of course it took some preparation, but no trust required.

 

[Sunset]

Everything is TOD to the other spouse. If we both go down in a plane crash, the kids get it. The will is a formality.

Vanguard is pretty good this way, for each account a primary beneficiary (spouse) can be named, and secondary beneficiaries named as well (or descendants) in case the primary is dead.

 

[pb4uski]

yes if you have a sizable assets in a IRA or 401k etc then you should have a trust. ....

Trusts are rarely used for IRA or 401k assets in my experience. Can you elaborate on the benefit of using a rust for those sort of assets?

 

[pb4uski]

We set up a revocable living trust as part of our estate plan. Our tax deferred accounts will pass through beneficiary designations but all real estate and taxable brokerage accounts are in the trust. When we set this up, the goals were:
- avoid probate, which is expensive in California
- have an adult trustee to dole out funds to our then minor child at appropriate times
- maintain privacy over the dollar amounts involved

Our daughter is now a functioning adult and we are going to meet with the estate attorney this year and update the plan. We'll discuss revoking the trust and switching to ToD beneficiaries on all properties and accounts; but even if we end up keeping the trust, we want to delete the part that would have gone into effect if we died before our daughter was old enough to handle money on her own.

What you describe in the first paragraph was similar to my parents A/B revocable liging tursts set up in 1991, principally to minimize estate taxes, which is no longer a concern. Mom recently died. The financial assets of her traditional and Roth IRAs were distributed via the designated beneficiaries within a month of her passing. The financial assets of the trusts were also distributed to the trust beneficiaries within a month of her passing by my providing transfer instructions as the co-trustee to the brokerage. Both were easy-peasy othehan a couple minor hiccups. There is still real estate in the trusts that I am sorting through that will take a bit of time.

Our plan is a little different. All beneficiary designations for all financial accounts... taxable, tax-deferred and tax-free and enhanced life estate deeds on our two real properties that name our kids as joint owner remaindermen.

In both cases, totally avoids probate.

We have wills, but they will only cover personal property... jewelery, furniture, etc. and anything that we didn't put a beneficiary designation on.

 

[Dash man]

We each have individual trusts that basically mirror each other except we are primarily each other’s beneficiaries. We’re also set up to have our IRAs flow into protective trusts after the boys liquidate them, for the purpose of continuing to protect the funds from potential creditors or judgements.
We once had a special needs trust for our nephew who is disabled with spina bifida. I honestly don’t remember why we ended it with our latest revision.

 

[pb4uski]

...We’re also set up to have our IRAs flow into protective trusts after the boys liquidate them, for the purpose of continuing to protect the funds from potential creditors or judgements. ...

Can you elaborate? Are you really that concerned about claims from creditors?

 

[Dash man]

We’re not concerned for any particular reason. But it’s just a way to keep the protections IRAs have by having the distributions roll into a trust after taxes are paid or when the ten year required distributions are complete. For one son in particular, this will likely be his only retirement fund.

 

[rk911]

We have a living trust so that our assets will not need to pass through probate court.

Same here. We shopped for a lawyer and had it drawn up. Wanted to make it as EZ a process as possible for our successor trustees after we’re both gone. Peace of mind.

 

[Ole Red 29]

our lawyer recommended NOT to do a trust here in Texas. Most all of our assets are TOD (including our home). He drew up a will to address the few minor assets left over.

On the other hand, my in-laws had a trust drawn up in another state. It costs them thousands of dollars, but they were told they would be doing us a favor. They have not been maintaining the trust. They have now moved here to Texas. So hardly any of their current assets have been signed over to the trust. I have tried to get them to update it, but they haven't yet. I am afraid it will be a nightmare for us eventually with assets in and out of the trust.

 

[WhenIsItTime]

Do you guys have a trust? If so what kind? Why did you do it? What are the benefits and the cons? Did you do it before death?

Anyone do a special needs trust? If so why?

Lot's of scenarios. I think its more about what do you have and what do you wish to do with it when you die.

We have revocable for wife and I to avoid probate. Also, provides for our children who are under 18yo.

Have irrevocable for our kids to start passing wealth (e.g. annual gift tax exclusion transfers) to them. We will likely exceed estate tax exemption, so also provides place for grandparents (my parents) to direct money to my kids skipping us. Limits kids access to a minimum age. I prefer to make this initial transfer to my kids when they can use it most and not simply when I die. Assuming I'm alive, it will also let me watch what they do with it to see if I leave them more when I eventually die or I need to direct remaining elsewhere.

 

[PatrickA5]

We spent the last few months studying trusts and meeting with several lawyers. In the end, we decided to just have our Wills updated. As it stands now, everything we have will be TOD (including the house). No probate. Kids are grown and could handle getting an outright distribution. We will take a relook in 5 years, or if something changes.

 

[steelhead]

We had a revocable trust set up last year mostly to avoid CA probate fees. Along with our house, we put our Vanguard joint taxable account in it because Vanguard did not allow us to add secondary beneficiaries to the joint taxable account. My DW has a smaller separate brokerage to which she could add secondary beneficiaries so we kept that out of the trust.

 

[Happyras]

I doubt we would have a trust in WA except for the outrageous Estate Tax here. The QTIP trust structure allows us to preserve the small personal estate exemption on the first death while enjoying the double step up basis here in WA. When they lower the Fed exemption in the future, we have the mechanism set to preserve that exemption as well.

I did set up individual IRA distribution trusts, but the jury is out on whether this is needed except as a tool for distribution of these assets to our minor grand kids. This could be done many ways, but typically you do not want to put IRA's in your revocable trust.