Will or Living Trust?

[mathjak107]

yep , that is why you have to give a lot of thought as to what you hope to accomplish with a trust .

we have disclaimer trusts .

we got them to deal with ny's estate taxes before they went to 5 million .

basically they are transparent to us .

the surviving spouse has 9 months after death to throw a switch and split the estate in two if need be . it becomes an irrevocable trust if activated

 

[meierlde]

here is a list of states that allow transfer on death deeds:States that Allow Transfer-On-Death Deeds for Real Estate | Nolo.com

 

[Fedup]

But if you already have a will and a trust then it's best to leave it alone right? I mean you already paid the money.

 

[marko]

take a hard look at why you want a trust . they can be double edge swords .

as an example a revocable trust avoids probate . medicaid rarely goes after assets not probated . however a house becomes an unprotected asset in a revocable trust .

where as when held in personal name the value of the house under a limit is not counted for qualifying that is no longer the case once in the trust .

now to qualify the dollars in the house count . you may have to sell the house to qualify and then have to spend it down .

so yeah ,medicaid can't take the house if it isn't probated but now you can't qualify with it in the trust .

look back's apply when reshifting .

AFAIK, in Massachusetts, revocable and even irrevocable trusts no longer protect assets of any kind from Medicaid scrutiny. The look-back is currently 5 years and they're considering a 10 year look-back period.

 

[meierlde]

But if you already have a will and a trust then it's best to leave it alone right? I mean you already paid the money.

If you live in the same state it is perhaps ok, if you have changed states a checkup by a lawyer in the state you now live in might make sense.

 

[mathjak107]

AFAIK, in Massachusetts, revocable and even irrevocable trusts no longer protect assets of any kind from Medicaid scrutiny. The look-back is currently 5 years and they're considering a 10 year look-back period.

revocable trusts are never protected . they have other uses . i don't see anything saying that irrevocable trusts are up for grabs in mass .

Using Irrevocable Trusts in Medicaid Planning

 

[H2ODude]

DF passed 20 years ago with a revocable trust. IIRC he and I were the trustees and I was only one named to inherit anything. His only assets were held at Fido and I just sent in a death certificate and copy of the trust and in a few days was able to transfer it over to DW and my account. Easy peasy.

One thing not mentioned here is the privacy of this method. Don't know how public probate it but would guess pretty public. No one knew what DF passed on to me except Fido. Can imagine all kinds of solicitations for services if publicly known that one just got a big inheritance.

DW and I don't yet have a R trust but will one day. Meanwhile everything jointly owned or in IRAs with named beneficiaries and alt ben. At this point only advantage I can see now is we both croak simultaneously. We do travel quite a bit but I'll just take that chance. Probably wouldn't hurt to set up and as cars or real estate turns over just title the new ones in the trusts name.

 

[H2ODude]

Question for the lawyers here. DF's trust was written in FL and then he moved here to NC. No real estate or cars involved. Are revocable trusts "moveable" across state lines?

 

[MrLoco]

In our case, all assets are either jointly owned with TOD to our 2 kids, or individually owned with spouse as primary beneficiary and kids as 50/50 contingent beneficiaries (and per stirpes). Texas allows TOD on real estate but not automobiles, so the one exception is our vehicles, which are jointly owned but no TOD... and I suppose household goods. But I'd estimate that 98% of our net worth would transfer directly to the joint owner or beneficiary. We also have a will, including living will and durable POA.

Is it still necessary or preferable to have a trust under these circumstances?

No. What you are doing is fine. In fact a TOD/POD designation on accounts will usually supersede whatever is written in a will. In fact if TExas allows TOD on real estate, as you said, this covers 98% of your assets. And some day you will probably give up driving so the cars will not be an issue.

YEars ago one was not able to designate accounts as TOD/POD so lawyers pushed trusts to avoid probate. And today lawyers will still push trusts for whatever reason they can come up with because.....they are lawyers! And that is how they get paid.

 

[GrayHare]

Regarding involving an attorney to draw up these documents, it's very difficult to know whether you are getting what you want. Communication is always a challenge, and legal documents are often difficult reading. You won't know if you got the trust / will / etc. that you intended until it's too late, and that can leave your beneficiaries with a rude surprise and lots of work. If you want to proceed and you want it done as you wish you probably need to involve multiple unaffiliated attorneys, one to draw up the document, and another (or two) to review it and check that it accomplishes what you intend. It's a lot of time and money, but a bad trust can be worse than none at all, and you know who the attorney will blame if something is wrong in the document.

 

[Fedup]

How easy is it to draw up a cheap TOD? I'm thinking of my sister who has no will.

 

[mathjak107]

tods usually are just beneficiary forms on accounts . be careful though not all states accept them on brokerage accounts . for a while ny did not . community property states can present issues .

 

[Fedup]

tods usually are just beneficiary forms on accounts . be careful though not all states accept them on brokerage accounts . for a while ny did not . community property states can present issues .

I'm think of real estate. She told me listed us as beneficiaries already on her IRA account.

 

[marko]

revocable trusts are never protected . they have other uses . i don't see anything saying that irrevocable trusts are up for grabs in mass .

Using Irrevocable Trusts in Medicaid Planning

This is where I got it: MassHealth and Irrevocable Trusts | Pabian & Russell LLC | Boston Law Firm | Elder Law

Excerpt:

"Unfortunately, MassHealth (the Massachusetts Medicaid program) has decided to redefine how much control it will allow clients to retain. Over the past few years, MassHealth has been rejecting irrevocable trusts that were deemed acceptable in the past. What is even more outrageous is that in a few circumstances, MassHealth has taken a second look at some trusts, terminating benefits for current MassHealth recipients whose trusts had previously been accepted."

 

[karen1972]

One thing I'm not clear on is if a living trust would fix one other problem.
So my BF is named designated beneficiary on everything and we hold the house in joint tenant, so the only non-named items are my 2 cars and household personal belongings so I was thinking it wasn't a big deal not to have either.

However, my mother said, if my BF and I were to be in a car accident, she understood the law to be that should my BF outlive me (I die at the scene, he dies on the way to the hospital), the law would declare him my beneficiary and then his family heir to everything.

So then I wonder if a trust would resolve that such that it would revert back to my family. I want everything to go to my BF, but if he doesn't use it all, I do not in anyway want it going to his family,

 

[Brat]

A living trust is revocable until the last grantor dies. It then becomes irrevocable.

I think a good lawyer can structure a work-arround of Karen1972's concern.

 

[mathjak107]

This is where I got it: MassHealth and Irrevocable Trusts | Pabian & Russell LLC | Boston Law Firm | Elder Law

Excerpt:

"Unfortunately, MassHealth (the Massachusetts Medicaid program) has decided to redefine how much control it will allow clients to retain. Over the past few years, MassHealth has been rejecting irrevocable trusts that were deemed acceptable in the past. What is even more outrageous is that in a few circumstances, MassHealth has taken a second look at some trusts, terminating benefits for current MassHealth recipients whose trusts had previously been accepted."

it does look like the mass. courts are over ruling that when it actually hits the courts .

same article .

"Most recently, in Heyn v. Director of the Office of Medicaid, the Appeals court rejected MassHealth’s argument that an irrevocable trust cannot protect assets. Here, the Appeals Court expressly declared that irrevocable trusts are a permissible planning tool. The court also clarified that trusts can include a testamentary power of appointment along with a right to substitute property of equal value. Consequently, MassHealth trusts can be written to provide a step-up in the tax basis of the property at the grantor’s death and to retain their capital gains exclusion."

 

[googily]

A living trust is revocable until the last grantor dies. It then becomes irrevocable.

I think a good lawyer can structure a work-arround of Karen1972's concern.

I think ours were written with some sort of 30-day clause or some such, that if we died within 30 days of each other, it was to be assumed that we died together. Sounded pretty standard.

We did our estate stuff with an attorney back in 2015, and both had trusts created, but DH never titled anything into his trust (I owned two properties separate from him that were titled into my trust, though). Almost everything else was either titled jointly (the house/brokerage/bank accounts), or set up as TODs.

With DH's recent death, the only things going through probate are his car and his personal checking account. Everything else is owned jointly or is passing via beneficiary designation (his IRA). It does not look to be a very difficult process for me, and the estate attorney is doing a great job holding my hand and laying out each step. In this case, I'm not sure his having a trust was really all that necessary (though it would have been had we both died together.)

But, now that I am on my own (no kids), I will be making sure--promptly--that anything that can possibly be owned by my trust will be. My assumption is that my brother will end up trustee, and I want to make it as easy a process for him as possible. And, as someone said upthread, that also means that he would be able to get access to my monies to aid in taking care of me, should I need it.

 

[CountryGal]

In California, the probate fee is set at a percentage of the value of the estate. Anything in a trust is not subject to probate. Had my father stayed in California, the trust would have saved us probably six figures. Here, in PA, I was charged a flat hourly fee for legal help settling the estate, and the attorney was very fair, inexpensive, and basically advised me what to do each step. I probably spent less than $2000 in legal fees. So, the answer varies state by state. Also, even if you have a trust you should have a will.

I was robbed in PA. Spent $17K on legal fees. Estate was worth under 300,000. Reasons I can point to:
1. Lawyer had no office staff. He did everything himself.
2. Lawyer had no good PC skills. He wasted a lot of time redoing things I gave him to get them in the format he wanted. He liked Word instead of Excel. He went through EVERYTHING in detail.
3. We must have filed at least 3 times with the state. Each time was like a new experience so very costly. It was not worth doing an early filing to get a discount.
4. High hourly rate for everything.

 

[meierlde]

One thing I'm not clear on is if a living trust would fix one other problem.
So my BF is named designated beneficiary on everything and we hold the house in joint tenant, so the only non-named items are my 2 cars and household personal belongings so I was thinking it wasn't a big deal not to have either.

However, my mother said, if my BF and I were to be in a car accident, she understood the law to be that should my BF outlive me (I die at the scene, he dies on the way to the hospital), the law would declare him my beneficiary and then his family heir to everything.

So then I wonder if a trust would resolve that such that it would revert back to my family. I want everything to go to my BF, but if he doesn't use it all, I do not in anyway want it going to his family,

It depends on how the trust is written. If it provides for income and necessary expenses from capitol, with any remainder going to your family BF have what amounts to a life interest in the money. Again this is best done thru an experienced attorney in estate and probate matters.

 

[CaliKid]

We receive mailings, at least weekly, offering free estate planning seminars. Usually there is a free meal at an expensive restaurant involved, and an offer of a free consultation with an "Elder Law Attorney." The goal is to sell an expensive living trust package. There is a reason these guys do this: They are not established and respected enough to live on referral business like the really good guys can.

You are right it's generally (but not always) less established attorneys who have not built up clientele who do the seminars. However, if it's at an expensive restaurant it wouldn't surprise me if there is an annuity salesperson involved also.

 

[evilanne]

How easy is it to draw up a cheap TOD? I'm thinking of my sister who has no will.

I did not know that you could do TOD for real estate, but in many states, you can still do a handwritten or holographic will. See https://en.wikipedia.org/wiki/Holographic_will and verify the requirements for your state.

"The following states recognize holographic wills made within the state, though witnessing requirements vary: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Idaho, Kentucky, Louisiana, Maine, Michigan, Mississippi, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming."

 

[Starsky]

I always hated tax law in college and wouldn't presume to know the law - but I did stay at a Holiday Inn last night.

My advice is to ask your friends for referrals for a good local estate planning attorney and have a 1 hour meeting to review your options. No matter where you live, some protection/preparation will definitely be a good idea rather than none.

 

[MikeD]

I was robbed in PA. Spent $17K on legal fees. Estate was worth under 300,000. Reasons I can point to:
1. Lawyer had no office staff. He did everything himself.
2. Lawyer had no good PC skills. He wasted a lot of time redoing things I gave him to get them in the format he wanted. He liked Word instead of Excel. He went through EVERYTHING in detail.
3. We must have filed at least 3 times with the state. Each time was like a new experience so very costly. It was not worth doing an early filing to get a discount.
4. High hourly rate for everything.

This, to me, sounds like a lawyer problem and not a state problem.

Mike D.

 

[kaneohe]

................... One of the most persuasive arguments for a RLT not mentioned is the ability of the trustees to immediately assume management of RLT assets should there be an impairment (but not death) without any further review by some other authority.
In our case we have some rental property, the Trustee can be sure all bills and tenants issues are properly managed should we become incapacitated for any duration longer than 30 days. Only a finding of impairment by a physician is required. Impairment could be everything from an incapacitating accident to loss of cognition capabilities (e.g. stroke),

Wonder if anyone has real life experience with this. Reason I ask is that I see frequent discussions of POA experiences where the person has POA but that is often not accepted by banks and other financial institutions who want either their own POA filled out or a certification by the person who granted the POA that the POA is valid........that's ok if that person is competent but would not work if they weren't. I could easily envision the same thing happen w/ a trust.