Dumb ? - what is an asset for purposes of a trust

[ncbill]

I mis-typed. The sole successor trustee and the conservator are the same person now... but yes I should've been clear on the terms. Discover Bank is refusing to acknowledge the new successor trustee for the trust account despite court docs stating the previous temp conservator and successor trustee has been terminated and replaced.

That's why I made sure I was named co-trustee (not successor) on the revocable living trusts I had my relatives setup after they received their terminal diagnoses.

Since I was also acting as their caregiver setting up the trust was primarily for my convenience.

Their lawyer handed the transfer of real estate into the trust & I used their DPOA to move financial assets into the trust name.

 

[Spock]

I'm still confused. I assume that Discover Bank was provided with the relevant pages of the trust when the account was opened. If the original trustee died they woudl be replaced by the successor trustee named in the trust document, so if you provide Discover Bank with the death certificate of the original trustee they shouldn't need anything further.

Now if the successor trustee changed between when the account was established and now, I can see that they would need more documentation.

It sounds like perhaps the named successor trustee was replaced. If they won't accept a court document stating that the successor trustee was replaced by the trust or by the court, what is it that they are demanding in order to accept the replacement successor trustee?

No deaths... we had to take Dad (grantor) to court to get him declared incompetent.
So now we're on our 3rd set of successor trustees and conservators.
1. I was named sole successor trustee and temp conservator at the initial emergency petition.
Discover cooperated quite nicely with me on getting control of the account.
2. Dad was P.O.'d. The lawyers suggested going to a 3rd party temp conservator (trustee-ship can't be split... according to the lawyers) to see if Dad would acquiesce. He didn't. 3rd party made a huge expensive mess.
Discover recognized the 3rd party without hassle that I was aware of. Discover did not require any paperwork to transfer from me to 3rd party.
3. Back to court again and this time we got my brother appointed to be trustee and perm conservator.
Discover will not recognize the new trustee despite uploading 13 different docs including certification of trust, court docs, Discover forms, etc. Discover requires a Letter of Instruction from the 3rd party stating they are no longer the trustee and transferring to my brother. Again, Discover didn't need such a letter back in step 2. However the 3rd party was replaced by the court and is refusing to cooperate... she won't even forward mail/year end 1099s much less write a letter to Discover (which she would want her lawyer to review if she did write it). Offered to write the letter for her to upload, nope.


The maddening bit is Dad had made me co-trustee of the trust and POA before he went completely soft. But the court gives dementia patients a say in their affairs and since Dad was mad we took over, that estate planning was all null and void.

 

[pb4uski]

Do you or someone else have online access to the Discover account? If so, can you transfer the balance out to another linked bank account that you do have access to or do a withdrawal by check? IOW find a way to close Discover out of the whole process and set up an account somewhere else.

If not, it might be time to file a complaint with the relevant banking regulator to get Discover Bank's attention.

 

[ncbill]

No deaths... we had to take Dad (grantor) to court to get him declared incompetent.
So now we're on our 3rd set of successor trustees and conservators.
1. I was named sole successor trustee and temp conservator at the initial emergency petition.
Discover cooperated quite nicely with me on getting control of the account.
2. Dad was P.O.'d. The lawyers suggested going to a 3rd party temp conservator (trustee-ship can't be split... according to the lawyers) to see if Dad would acquiesce. He didn't. 3rd party made a huge expensive mess.
Discover recognized the 3rd party without hassle that I was aware of. Discover did not require any paperwork to transfer from me to 3rd party.
3. Back to court again and this time we got my brother appointed to be trustee and perm conservator.
Discover will not recognize the new trustee despite uploading 13 different docs including certification of trust, court docs, Discover forms, etc. Discover requires a Letter of Instruction from the 3rd party stating they are no longer the trustee and transferring to my brother. Again, Discover didn't need such a letter back in step 2. However the 3rd party was replaced by the court and is refusing to cooperate... she won't even forward mail/year end 1099s much less write a letter to Discover (which she would want her lawyer to review if she did write it). Offered to write the letter for her to upload, nope.


The maddening bit is Dad had made me co-trustee of the trust and POA before he went completely soft. But the court gives dementia patients a say in their affairs and since Dad was mad we took over, that estate planning was all null and void.

I've also read of people having trouble getting a successor trustee recognized after the death of the grantor (original trustee)

Which is why I recommend having a co-trustee from the get-go...surely a parent has someone they'd trust, even if it isn't a child?

 

[FireProoof]

A big reason for Trusts

My parents had a trust to avoid inheritance taxes. Ended up they were nowhere near the limit but the trust saved a lot of money because after my Dad died, a irreversible Bypass Trust was funded with my Dad's half of the money.

Shortly afterwards my Mom went in a nursing home. Research at the time showed the place (and a number of other ones) would basically keep you if you paid for a full year. After that they accept Medicaid if you go broke. Well at $120 k / year you care burn through a life times savings pretty quick if you are healthy and live for years. My Mom lived over 5 more years which blew through $0.5 MM and used all her money. The Bypas trust kept 1/2 of inheritances from being scooped up by the nursing home. There was no change in her care when she went from paying to Medicaid paying.

For most people I think this is the most compelling reason to put non-insurance, non-401k / IRA assets into a trust.

 

[KarenF]

If your assets have a beneficiary, TOD or POD they do not need to be in a trust. We do have a trust and the only assets in it are our house and a brokerage account. Our state does not allow a TOD. The cars will be handled under a small estate provision. TOD and POD are very state specific. You need a lawyer that will go through this with you, not leave you googling to make a new list. I suggest firing that lawyer.

 

[KarenF]

And then there are troublemakers like me who think they can and should learn a lot about the subject and understand "why?" and ask annoying questions to get time-consuming explanations, which might reveal that an average practitioner didn't do a great job providing advice in their field. This costs more, because the back-and-forth of questions and explanations and changing recommendations takes time, and most of these types of practitioners charge quite a bit for their time.

I think of questions all the time and email our estate attorney. He patiently answers them all. He charged us $2500 to set up the original will/trust/POA/HPOA/Health Directives and $900 to update when we moved to an adjacent state (different estate laws). I think that was well worth it with the number of questions I still have.

 

[KarenF]

I've also read of people having trouble getting a successor trustee recognized after the death of the grantor (original trustee)

Which is why I recommend having a co-trustee from the get-go...surely a parent has someone they'd trust, even if it isn't a child?

My Mom's trust specified that I could take over as trustee with 2 letters from doctors saying that she was not capable of managing her own affairs. I got three letters and had a lawyer write a trust affidavit and had no trouble. My husband and I are cotrustees and when we are gone or incompetent our sons are cotrustees but can agree that one will handle everything. They have already decided which one will handle things.

 

[Spock]

My Mom's trust specified that I could take over as trustee with 2 letters from doctors saying that she was not capable of managing her own affairs. I got three letters and had a lawyer write a trust affidavit and had no trouble.
....

Congrats. My Dad had a requirement for only 1 letter from a Dr.
Dad's Dr refused, as did the hospital Dr and the hospital social worker. They must have been taken the same class as they all said verbatum: "He's still making decisions, they are just bad decisions".
His "decisions" at that point included:

• Attempting to give a house to his home health aide (the aide was registered by the state Adult Protective Services for taking money from a previous client)
• Going to the bank to withdraw all of his saving to give to a guy in the parking lot for safekeeping because the guy told him his account had been hacked.
• Winning the both the Publishers Clearing House sweepstakes and the Spanish Lottery... the blurry photocopied letter telling him he had won was copied crooked on the page... But he was going to be smart by opening a separate account to receive his funds.
• Firing his CPA, his rental property manager, and his lawyer when they objected to giving the house to the home health aide.

I haven't come up with iron clad language for when it's my time. I'm thinking of stating a minimum score on the SLUMs or MMSE cognitive tests but I'm not sure I could pass those tests now!

 

[davidfin]

I’m under the impression that assets that transfer on death via a beneficiary designation does not need to be in the trust. Insurance, brokerage accounts etc. our lawyer reviewed what we had and recommended that a trust was unnecessary as a result.

 

[Spock]

I’m under the impression that assets that transfer on death via a beneficiary designation does not need to be in the trust. Insurance, brokerage accounts etc. our lawyer reviewed what we had and recommended that a trust was unnecessary as a result.

TOD/POD/beneficiaries work for in the case where the owner dies.
If the owner gets dementia and the court appoints you as successor trustee a trust allows you to assume control of the assets via the trust documents. Otherwise you have to upload the court case/medical history and whatever the institutions lawyers require for re-titling the accounts.
At least it was a lot easier when I had to assume control of trust assets than it was to assume control of non-trust assets while the grantor. YMMW.

 

[Happyras]

A trust can be used for many objectives.
Tax laws-preservation of exemptions
Probate laws-attempt to avoid probate, not likely, but worth the try
Asset distribution to minors, or conditional distributions that are extensive
IRA distribution preservation of stretch control (maybe worthwhile, not likely due to trust tax rate schedules)

Nothing wrong with TOD, or even simple joint or tenants in common, but may not address the above intents.

 

[PatrickA5]

I thought I'd give my example of what I helped my dad set up before his death.

Checking Account: took dad to bank and had him put me on a joint owner. This took care of paying for expenses after he died (and a few before)

Savings Accounts / CD's: Had dad set up POD/TOD with my brother and me.

Brokerage Account: Even though I had DPOA, they required a separate form. I went to Scottrade, picked up the form and took it home for Dad to sign. This came in handy, because a few days before his death I went ahead and just sold his (minor) stock holdings converting everything to cash. Since his death was early in the year, it had no effect on his taxes.

Car: Had my name added to title. Probably wasn't necessary, but made it easy when I sold it.

EE Bonds: Sent off about 30 EE bonds to have my name added as Co-owner. Did this about a year before his death.

House: Went to lawyer and did a TOD with my brother and I as contingent owners.

After his death, it was easy. No probate. Didn't even file the Will. The only thing that was not joint/POD/TOD was household goods and DB and I just split up what we wanted and threw the rest in the dumpster (or gave away).

DW and I currently have a similar set up.

 

[Happyras]

Good example,

I thought...

After his death, it was easy. No probate. Didn't even file the Will. The only thing that was not joint/POD/TOD was household goods and DB and I just split up what we wanted and threw the rest in the dumpster (or gave away).

DW and I currently have a similar set up.

But pending on what state your in;
For Probate to be required by far, the most common reason for probate is that the Decedent died holding:
Any real property titled in his or her own name, or
Personal property (usually a cash or securities account) titled in his or her own name whose value exceeds $100,000.
However
Will: Washington law, however, does require any last Will of a Washington resident Decedent to be filed promptly following death.

I would guess if there was no will, it would not be filed and if the above probate conditions are met, no probate is required. So for small estates there is some easy way out, so to speak.

So we live in WA, but until we get to the point of making some major gifts we need the protection of a trust.

We had a similar situation with our mother, and we split the estate without probate since we all were joint on all titled assets. Earlier, I posted about my FIL that had the Florida lawyer with the trust, that was a mess.

 

[PatrickA5]

I should add that I contacted my Attorney (also my dads) and she said there was no reason to file the Will if all that was left was household stuff. Of course, she cautioned that if there was any chance my brother and I would have problems with splitting the remaining items, then it might be best to file the will. I'm not sure how filing the will would have helped with that.

My state does have a "small estate" provision, but we didn't need it since we didn't need to file the will.

 

[PatrickA5]

Good example,




Will: Washington law, however, does require any last Will of a Washington resident Decedent to be filed promptly following death.

So, does that mean if one spouse dies the other has to file the will even if everything is jointly owned (or TOD/POD)?

I know my parents and DW's parent didn't file probate when the first spouse died.

 

[Winemaker]

Hmm yeah maybe I need to fire my lawyer who I just met. I don't see that I need a trust at all but the point is to avoid probate. He was not encouraging about making a will only and I said its because you make more from a trust and he said well actually I make more on probate. IDK. Since all things have beneficiaries except house I do not see that I have any assets at all - for this purpose.

I am the executor of my dear Mom's estate. While we had most assets held jointly with my siblings, the assets held directly went through probate. The attorney's fee for estate is set by your state or county. My attorney chose to waive 1% of the 4% fee of the neighboring county where Mom lived. In my county the fee is 3%, so quite a big difference.

 

[nwsteve]

Good example,



But pending on what state your in;
For Probate to be required by far, the most common reason for probate is that the Decedent died holding:
Any real property titled in his or her own name, or
Personal property (usually a cash or securities account) titled in his or her own name whose value exceeds $100,000.
However
Will: Washington law, however, does require any last Will of a Washington resident Decedent to be filed promptly following death.

I would guess if there was no will, it would not be filed and if the above probate conditions are met, no probate is required. So for small estates there is some easy way out, so to speak.

So we live in WA, but until we get to the point of making some major gifts we need the protection of a trust.

We had a similar situation with our mother, and we split the estate without probate since we all were joint on all titled assets. Earlier, I posted about my FIL that had the Florida lawyer with the trust, that was a mess.

Also a WA resident and just concluded FIL estate that had all the real estate in Living Trust. Sales went through relatively once title company had copy of trust agreement. If you haven't made yourself a digital copy, suggest you do so--makes your life so much easier. Note my post up thread on the crazy zoo we had to endure getting a checking account in trust name. Nearly every bank would not accept trust or do much of anything without a probate court order.

 

[pb4uski]

I thought I'd give my example of what I helped my dad set up before his death.

Checking Account: took dad to bank and had him put me on a joint owner. This took care of paying for expenses after he died (and a few before)...

Just beware there is a potential downside to your DF adding you as a joint owner of his checking account... if you get sued then his checking account could be at risk. Unlikely, but a good reason to avoid keeping a lot of money in such a checking account.

 

[kgtest]

Yep darn sure all other things are TOD/POD except the house. Not like I have such a vast amount of assets I will forget.!! Unfortunately.

I asked why I can't just get the benef deed + will + POA etc and never got much of an answer just "a trust is better". Better for him I assume.

But yeah the trust did come with the will etc. It just the trust part I question the need for - not the rest. Why is everything so much trouble . . .

Maybe because I am not that interested in this process and sick to death of this new bp med that makes me feel crappy. They have agreed I can wean off and try something else.

You might "forget" if you succumb to Alzheimer's. I have an Aunt that this happened to and she doesn't have any of her financial affairs in order. Although she wouldn't have had them in order regardless of being struck by the disease...just one of those know-it-all yet completely ignorant types of personality. Now she can't remember where she parked her car (and she deosn't own a car)...which is scary.

Trusts are helpful if you own real estate in multiple states. The key is to re-title the property into the Trust otherwise it won't help much to avoid probate...which is IMHO one of the main benefits of a trust. If you can handle all your assets with TOD and beneficiary designations, save your money. I have a living will. I saved it on a USB flash drive, its also in the cloud on a google drive and I have a printed out copy. No disputing that if you have all 3 you know exactly what I want done with my assets when I die. I have supplemental informational documents that also outline some somewhat non-will types of things. General guidance on investing after I am gone...more of a suggestion as I can't really dictate that from the grave. Some of it can be, but what to actually buy in terms of ETFs/stocks etc would be handled by the Trustee.

Oh, that is one other important thing. Make sure you have the docs in place designating a trustee and a backup. And of course POA and Medical Directive. Pro-Tip, not all finance buffs are also great caregivers and sound with medical decision-making...and also it might be too much of a burden to have the same person in charge of care that is the Trustee. Cutting checks AND changing bed pans...just cruel.

 

[PatrickA5]

Just beware there is a potential downside to your DF adding you as a joint owner of his checking account... if you get sued then his checking account could be at risk. Unlikely, but a good reason to avoid keeping a lot of money in such a checking account.

True. That's why we have avoided adding any of our kids to any of our accounts. But, when we get older we'll probably open a separate checking and add a kid to it - but not keep a lot of money in it.

When my DB and I took dad down to put our names on his checking account we really got the "evil eye" from the lady at the bank. Which is a good thing, I guess. Although he was early 90's, he was still pretty sharp and had no problem convincing the lady that it was ok.

It sure made things easier. I could pay bills and had a place to deposit checks made out to dad. Even direct deposited his tax refund into it almost a year later.

 

[badatmath]

If your assets have a beneficiary, TOD or POD they do not need to be in a trust. We do have a trust and the only assets in it are our house and a brokerage account. Our state does not allow a TOD. The cars will be handled under a small estate provision. TOD and POD are very state specific. You need a lawyer that will go through this with you, not leave you googling to make a new list. I suggest firing that lawyer.

Well said. Yes I got rid of that one. Got a new one coming up 12/19.

 

[ncbill]

TOD/POD/beneficiaries work for in the case where the owner dies.
If the owner gets dementia and the court appoints you as successor trustee a trust allows you to assume control of the assets via the trust documents. Otherwise you have to upload the court case/medical history and whatever the institutions lawyers require for re-titling the accounts.
At least it was a lot easier when I had to assume control of trust assets than it was to assume control of non-trust assets while the grantor. YMMW.

As a co-trustee from the outset you can act just as any other trustee (e.g. the grantor) when it becomes clear they can't handle their affairs.

When mom started destroying mail I simply changed the mailing address so everything critical to came to me (still addressed to her) instead.

 

[Spock]

As a co-trustee from the outset you can act just as any other trustee (e.g. the grantor) when it becomes clear they can't handle their affairs.

When mom started destroying mail I simply changed the mailing address so everything critical to came to me (still addressed to her) instead.

Yes. But. The grantor still has the authority to transact as well. The institution has no visibility to the fact that they can't handle their affairs. And the definition of "becomes clear they can't" is unclear... unless they are naked in the front yard howling at the moon everybody seems to think they're not that bad... the phrase I constantly heard was "they're still making decisions, they are just bad decisions".

 

[badatmath]

Then what is a financial POA for? I thought they could spend my money if I was not able to do so to pay bills.