Trust or Not?

[Happyras]

It has also been popular, with those who have assets, to do IDGT. An intentionally defective grantor trust is irrevocable, but another distribution tool for real property that has income and appreciation. Certainly depends on your situation.

 

[karen1972]

My situation is simple enough I dont think one is warranted. My assets don't exceed the gifting limits, I have TOD on everything leaving only a "small estate" situation for the remaining personal assets, so a simple will should suffice to get Grandmas antique table back to who I want it to go to.

Things could change, but for now thats the plan.

 

[pb4uski]

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.

So over time the "favor" has decayed because of their inaction... thanks for the favor.

 

[ncbill]

TOD/POD for my personal assets.

Opening an estate for anything that can't be transferred via the above is not that big a deal in my state.

Only time I've used revocable living trusts were for older relatives where I was also their personal caretaker and so did not want to have to deal with any POA issues after they were no longer able to manage their affairs.

 

[Trailwalker]

Special needs trust for our adult son who is dependent on SSI and his ABLE account. It only gets funded if we both die before he does.

 

[Brat]

Oregon has a very low estate tax, our IRAs alone would trigger that on the last to pass. One feature of a revocable living trust is the ability to 'decline for the benefit' of the survivor so to park the asset value for heirs.

Also in case of incompetency residual trustees can sell assets in the trust.

 

[KimmK451]

I have a trust to ensure my estate goes where I want it (to friends, not my brother) and also to prevent someone appointing themselves as my guardian when I get old and feeble (the alt trustee is my guardian).

 

[Dtail]

My mom has an irrevocable trust and yes it is for medicaid long term care and protection of assets reasons.

 

[pb4uski]

As an aside, I usually get the 1041 forms from the IRS website and they have been pdf fillable forms. I usually only need the 1041, Schedule D and the Schedule K-1.

I just downloaded all of them for 2023. The 1041 and Schedule K-1 are pdf fillable forms as they have been for the last decade but the Schedule D is not... I'll have to fill it out and print it (I'll "print" it as a pdf for my records) but I won't be able to save it with the data.

Seems odd that that one form is no longer fillable. I'm hoping that it is a glitch and there will be a fillable pdf available later.

Anyone else running into this?

 

[OldShooter]

... Seems odd that that one form is no longer fillable. I'm hoping that it is a glitch and there will be a fillable pdf available later. ..

FWIW I've been using PDF Annotator for years. https://www.pdfannotator.com I have scanned my signature and uploaded it to PDF Annotator as a "rubber stamp" image that I can add to any PDF.

 

[SecondAttempt]

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.

+1

My ex and I formed a trust after her mother died. Her mother had a trust and it made everything so smooth and fast.

The way to think about it is that putting things in a trust has no benefit to you but is a gift to your heirs.

 

[Flyfish1]

We have Revocable Living Trusts and all assets are in the Trusts. In addition we have Irrevocable Life Insurance Trusts wherein we funded a fairly large amount of cash value Life Insurance.

 

[isisdave]

We live in Indiana and almost everything is covered by TOD ownership, or as beneficiaries of our IRAs and investment accounts.

However, we own a business property in California (where you can have TOD ownership ONLY for residential property), and a timeshare in Hawaii (where ANY real estate must be probated). Those are the only two things in the trust.

 

[jpeter1093]

+1

My ex and I formed a trust after her mother died. Her mother had a trust and it made everything so smooth and fast.

The way to think about it is that putting things in a trust has no benefit to you but is a gift to your heirs.

When my FIL passed; each of his 4 daughters had a trust setup for them. His estate wasn't subject to any tax; the trust agenda could have just been accomplished via beneficiaries (he only had 2 accounts). It added an unnecessary 365 days to settle the estate. Can't transfer from a trust account to an ordinary account; you need to setup a receiving trust account - plus lawyers.

I saw no benefit to him having set it up this way. I'm sure he thought it would protect things but they were protected by beneficiary and estate rules, anyway. RIP Bob

 

[pb4uski]

When my FIL passed; each of his 4 daughters had a trust setup for them. His estate wasn't subject to any tax; the trust agenda could have just been accomplished via beneficiaries (he only had 2 accounts). It added an unnecessary 365 days to settle the estate. Can't transfer from a trust account to an ordinary account; you need to setup a receiving trust account - plus lawyers.

I saw no benefit to him having set it up this way. I'm sure he thought it would protect things but they were protected by beneficiary and estate rules, anyway. RIP Bob

What you wrote is inconsistent with my experience. My mother recently died and we distributed the financial positions in her trust and in my Dad's trust to the trust beneficiaries in less than 30 days.

Each beneficiary set up a brokerage account with the broker (Schwab in this case) and then I provided Schwab with a document instructing them to transfer 20% of each position to each of the 5 brokerage accounts.

There were a handful of bond positions where the resulting holdings would be too small so I made a couple mid course corrections, but that was it... it was frightenly easy.

 

[jpeter1093]

What you wrote is inconsistent with my experience. My mother recently died and we distributed the financial positions in her trust and in my Dad's trust to the trust beneficiaries in less than 30 days.

Each beneficiary set up a brokerage account with the broker (Schwab in this case) and then I provided Schwab with a document instructing them to transfer 20% of each position to each of the 5 brokerage accounts.

There were a handful of bond positions where the resulting holdings would be too small so I made a couple mid course corrections, but that was it... it was frightenly easy.

That's great. I do suspect just the executors interactions with the estate lawyer as slowing down things.

Having said that; did you see any advantage versus just a beneficiary designation? Plus, no you always have to have a trust account to transfer spending funds to, right?

 

[pb4uski]

That's great. I do suspect just the executors interactions with the estate lawyer as slowing down things.

Having said that; did you see any advantage versus just a beneficiary designation? Plus, no you always have to have a trust account to transfer spending funds to, right?

Not really. We had two IRAs that had beneficiary designations and those were transferred within a month as well. We just provided them with a death certificate and each beneficiary set up two inherited IRA accounts (one traditional and one Roth).

We did have one issue in that at one point after we had all the accounts set up and provided them with the death certificate that they acknowledged that they had they said it would take 5-6 weeks to transfer the positions to the beneficiaries. I went balistic and teed off on the guy and told him that if it took more than 5-6 days that I would be making complaints to their regulators that they were slow-walking distributing the assets to the beneficiaries. After that he agreed to put us in for expedited handling and it was all done within a week.

We retained about $20k in a checking account in one of the trusts that has a rental property in it and we are deciding whether to keep or sell the rental property.

There were no significant expenses requiring "spending funds"... she had one credit card that she used and the assisted living fee for the month had already been paid so we'll get a small refund on that.

Our estate plan has no trusts, just beneficiary designations and enhanced life estate deeds for real property.

 

[jpeter1093]

Not really. We had two IRAs that had beneficiary designations and those were transferred within a month as well. We just provided them with a death certificate and each beneficiary set up two inherited IRA accounts (one traditional and one Roth).

We did have one issue in that at one point after we had all the accounts set up and provided them with the death certificate that they acknowledged that they had they said it would take 5-6 weeks to transfer the positions to the beneficiaries. I went balistic and teed off on the guy and told him that if it took more than 5-6 days that I would be making complaints to their regulators that they were slow-walking distributing the assets to the beneficiaries. After that he agreed to put us in for expedited handling and it was all done within a week.

We retained about $20k in a checking account in one of the trusts that has a rental property in it and we are deciding whether to keep or sell the rental property.

There were no significant expenses requiring "spending funds"... she had one credit card that she used and the assisted living fee for the month had already been paid so we'll get a small refund on that.

Our estate plan has no trusts, just beneficiary designations and enhanced life estate deeds for real property.

Thanks for the answer. So, you didn't see the need in your own estate to setup a trust. Guess that says it all.

 

[JJpop]

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.

IRA’s do not belong in a trust unless there is some special circumstance.

 

[jpeter1093]

IRA’s do not belong in a trust unless there is some special circumstance.

yep, that's what my DW has; IRAs in a trust

 

[pb4uski]

Thanks for the answer. So, you didn't see the need in your own estate to setup a trust. Guess that says it all.

No, I didn't. We were lucky that both Florida and Vermont have legislation that provides for enhanced life estate deeds aka Lady Bird deeds.. that are functionally like a beneficiary designation for real property.

My parent's trusts were established back when the estate tax exemption was much lower and they decided to put 50% of each real property in the trusts.

That said, I don't necessarily object to trusts but I don't see them as essential as most people do.

 

[steady saver]

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.

That is interesting and we were steered away from trusts as well (we are also in Texas). We have beneficiary designations with non-retirement accounts but that's as far as we've gotten. I need to look into that for our properties. What about retirement accounts? I'm afraid I've not explored that yet.

 

[pb4uski]

^^^ Retirement accounts can have beneficiary designations. For your properties, look into Lady Bird deeds, aka enhanced life estate deeds which are essentially a beneficiary designation for real estate.

 

[meleana]

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?

We don't have one because almost all our assets have beneficiaries or TOD's or POD's.


Exceptions are I Bonds- which we don't seem to be able to do for some reason. And our house and cars.


Plus we only have one heir- our only child.



We consulted with an atty and she agreed it wasn't really necessary. Probate is not the monster that it's made out to be for many people.


Once one of us passes away (my husband or I) that could possibly change depending on how the survivor might want our home and car handled.



But, of course, everyone's situation is different and some people might need one.

 

[Dean56]

No, I didn't. We were lucky that both Florida and Vermont have legislation that provides for enhanced life estate deeds aka Lady Bird deeds.. that are functionally like a beneficiary designation for real property.

I just had a Enhanced Life Estate setup for my mom. She lives in Florida. Very easy and cost effective. I wanted to avoid probate in the future.