Living Trust Question

[JBTX]

I too never fully understood the benefit of a RLT in my situation. We are married couple with one 18 year old child. We have him listed as the TOD beneficiary on every asset except the house which we left in the will. I and the Mrs. have DPOA on each other in case one of us is incapacitated.

What is a trust going to do for me? I don't get it.

So if you son were to die first, and you and spouse were alive but incapacitated at some level such that managing financial accounts is at the top of mind, upon your death where would the assets go?

 

[Dash man]

So if you son were to die first, and you and spouse were alive but incapacitated at some level such that managing financial accounts is at the top of mind, upon your death where would the assets go?

^^^This!
Plus even if the adult child lives, he would have to go to court if both his parents became incapacitated. I for one wouldn’t give a POA to an 18 year old.

 

[Ncc1701]

So if you son were to die first, and you and spouse were alive but incapacitated at some level such that managing financial accounts is at the top of mind, upon your death where would the assets go?

I get your point and agree it's always best to plan for the unexpected but my child dying before both of us AND we are incapacitated at the same time is pretty far fetched.

Now maybe if my child dies first and one of us is incapacitated would be more possible but at that point a trust can be created by one of us on Legal Zoom in 1 hour.

 

[Dash man]

I get your point and agree it's always best to plan for the unexpected but my child dying before both of us AND we are incapacitated at the same time is pretty far fetched.

Now maybe if my child dies first and one of us is incapacitated would be more possible but at that point a trust can be created by one of us on Legal Zoom in 1 hour.

Far fetched is why people create trusts. You’d be surprised how often unusual things happen. And legal zoom is a terrible way to create a trust. Have you ever sat down and spoken with an estate attorney?

 

[badatmath]

I don't see any negatives, but what are the positives? Why not just use beneficiary designations for the joint brokerage accounts?

I don't see a trust as being more private than beneficiary designations.

+1

 

[rayvt]

I We have him listed as the TOD beneficiary on every asset except the house which we left in the will.

Many states now have a "beneficiary deed", you record it and it acts just like a TOD. A will requires probate, a TOD avoids that.

 

[meleana]

I too never fully understood the benefit of a RLT in my situation. We are married couple with one 18 year old child. We have him listed as the TOD beneficiary on every asset except the house which we left in the will. I and the Mrs. have DPOA on each other in case one of us is incapacitated.

What is a trust going to do for me? I don't get it.

Same here. We have one son as well but he’s 35.

We have TODs and POAs and beneficiaries on eveything. Only our home and cars we can’t because our state doesn’t allow it.

We discussed this with our atty and she agreed it really wasn’t necessary. Though probate can be a bit of a drag in our state, our son could still live in the house, get it ready to sell, or whatever, etc. We have a will and eveything else.

Our previous atty in NY told us it’s ridiculous this push to put everything into trusts considering the expense and the hassle of keeping it updated down the road. He said probate is not that horrible most of the time. Exaggerated.

Not sure what to do about the cars. My mom signed her titles ahead of time in the event that she died we could claim the cars. Lol. But our atty advised against that.

 

[ncbill]

Only time I've setup RLTs it was for relatives where I was both primary caregiver & handling their affairs after death.

So mostly for my convenience given the above duties were unpaid.

 

[Happyras]

We have a RLT due to living in WA, where the estate tax is pretty high. The trust structure preserves the individual exemption for the first to pass on. I would prefer something else and I am considering IDGT's, but we have a community property state and have double step up basis to our advantage. So the estate plan has to balance these advantages to real properties. If it were not for the estate tax issue, we would likely avoid the trust structure entirely.

 

[pb4uski]

Many states now have a "beneficiary deed", you record it and it acts just like a TOD. A will requires probate, a TOD avoids that.

Vermont, Florida and Texas have enhanced life estate deeds aka "Lady Bird" deeds which function similar to a TOD.

Our kids are named as "remaindermen" and we have an enhanced life estate, meaning that we can use it, rent it and keep the rental or sell it and keep the sales proceeds... effectively all the rights of direct ownership of the property. When the second of us dies the kids are owners without the enhanced life estate limitation. Effectively like a beneficiary designation and it avoids probate. Also, it does get stepped-up basis.

We had planned on putting the properties in living trusts but once we found out that the states our properties are in allow enhanced life estate deeds we decided that was a better option for us.