Do I Need a Trust?

[calico1597]

DH and I redid our wills about five years ago, we are Illinois residents. Since then we have bought a winter home in Arizona. Do we need to establish a trust to cover the AZ home to avoid AZ probate? Or will the AZ home be included in our assets to be distributed to our heirs based on the Illinois will without the expense of a trust?

We ran this past an Illinois lawyer, he said yes we need to set up a trust to the tune of $2K. Sounds like a lot. We have total worth of under $2M

 

[CaliKid]

Yes trust FOR SURE. Otherwise you will have a multi-state probate. $2k is reasonable. I would focus on the attorney's experience and focus more than their price.

 

[RunningBum]

Couldn't you just file a transfer on death deed? https://store.nolo.com/products/arizona-transfer-on-death-beneficiary-deed.html

 

[CaliKid]

Couldn't you just file a transfer on death deed? https://store.nolo.com/products/arizona-transfer-on-death-beneficiary-deed.html

Avoids probate but not conservatorship. Very simple planning and not right for most people.

 

[Luck_Club]

running through this as well. Looking at 3 trusts to complete my objectives. Got 1 quote @5K which included the 6 property deeds.

Avoiding probate is well worth it, I'm almost at $8K and counting, and I'm staying completely out of the way and minimizing contact to keep the fees down.

 

[RunningBum]

Avoids probate but not conservatorship. Very simple planning and not right for most people.

I'd like to hear more about the shortcomings. Conservatorship...are you talking about if the owner is no longer capable of making decisions? I'd think one would have disposed of a second home if it's the most common cause, age. If it's due to a sudden illness or accident, I'd think you'd want a POA for other things anyway. Or is it for a minor receiving the home? Many of us here have grown children. It'd be helpful to be more specific than just saying "not right for most people".

Asking in part because I've been considering putting a TOD on my primary home, for my only heir, an adult. All my investments are covered either by TOD or beneficiary. It does seem very simple but also seems to meet my needs, that there would be very little else so probate could be avoided. I'm not seeing why I'd need a trust.

 

[CaliKid]

I'd like to hear more about the shortcomings. Conservatorship...are you talking about if the owner is no longer capable of making decisions? I'd think one would have disposed of a second home if it's the most common cause, age. If it's due to a sudden illness or accident, I'd think you'd want a POA for other things anyway. Or is it for a minor receiving the home? Many of us here have grown children. It'd be helpful to be more specific than just saying "not right for most people".

Asking in part because I've been considering putting a TOD on my primary home, for my only heir, an adult. All my investments are covered either by TOD or beneficiary. It does seem very simple but also seems to meet my needs, that there would be very little else so probate could be avoided. I'm not seeing why I'd need a trust.

Few people know when they are going to become incapacitated. It just happens; illness, car accidents, etc....

POAs do not work for real estate because they are never "specific" as to the piece of real estate and thus title companies don't honor them. Also, many banks require people fill out bank specific POA forms.

A living trust is just more comprehensive planning.

 

[HI Bill]

Consider what does, and not require probate. If bank accounts list co-owners (say, the kids are listed), they TOD (transfer on death), outside of probate. If you list beneficiaries on annuities, IRAs, 401(k)s, etc., they, too, can avoid probate.

For my mom's house (worth $185K), she had only a will, and no trust in CA. I had to go through probate, costing me something like $8K, and delaying the sale of the house. So I paid $2K to have my dad establish a trust for his property. If he hasn't sold the house by the time he passes, it will save a lot of time and hassle.

I don't own any real estate, nor is the family car in my name. The vast majority of my assets are TOD/beneficiary designated. So, the only assets that might need probate are the checking/savings account. Therefore, no trust for me at this time.

 

[RunningBum]

This thread was a kick in the pants for me, that I should just see an estate planning attorney to figure out what I need. At a minimum I know I need to establish a POA, and my will needs a minor update as well. I've made an appt for a consult. As it turns out I've met one of the two attorneys in the firm through her husband, a running friend of mine. I figure the personal contact can't hurt, and they do specialize in estate planning.

 

[calico1597]

I appreciate the advise, now have one more question! We've already decided the AZ home is too small and plan to look at larger homes this winter in the same Del Webb community. If we set up a trust now, does it only cover the home we now have in AZ? Would it have to be done over when we sell this house and buy another?

 

[RunningBum]

calico, my understanding is that you would just title the new house to your trust, rather than to yourself. You do the same with all assets you want in the trust. I don't think the trust itself lists assets, but rather is a legal entity that you can register assets to as the owner. Not sure if my terminology is correct but that's the gist.

I'm starting the process now. One of my questions will be exactly how I need to title new assets so that they go into the trust. I'm guessing I won't have to ask, but I want to make sure I know.

 

[PatrickA5]

Couldn't you just file a transfer on death deed? https://store.nolo.com/products/arizona-transfer-on-death-beneficiary-deed.html

My dad had a TOD Deed on his house. Worked great. We sold his house about 45 days after his passing and had no problems. All we had to do was fill out an affidavit and send a death certificate to transfer title to my brother and me.