Rev. Trust? No brainer or not?

[Golfguy1455]

I'm 47 yr old single male conidering retirement, so I am trying to get all things in order.

Does it make sense to put all my assets in a revokable trust? Any idea how much that might cost me?

This is not an area where I am the most informed, but my thinking is that this would be key part of estate plan / will. ...perhaps this would also held protect assets in the future.

I have a will that I did 20 years ago, so I need to update that at some point.

Retirement assets:
-$1.O25m 401k in blue chip growth fund with rough one third on post tax basis.
-$175k in Roth IRA fidelity mutual fund
-$50K annual pension at age 65 (no COLA)
- social security eligible, but my intent is to wait until 70 or later to collect. I'm not sure what this amounts to, but let's say $20k at age 70.

Non retirement Assets:
$1.2m in mutual funds and stocks
$0.1m in cash
$0.2m in home equity. My intent is to sell house and move to a cheaper part of country in the next year.

At some point in next 15 years, I would expect small inheritance of $0.2m as a rough ballpark.

Thanks

 

[gayl]

Designated beneficiaries (aka: Totten Trust more commonly referred to as TOD/POD): free!

Retirement assets:
-$1.O25m 401k in blue chip growth fund with rough one third on post tax basis.
-$175k in Roth IRA fidelity mutual fund
-$50K annual pension at age 65 (no COLA)

Non retirement Assets:
$1.2m in mutual funds and stocks
$0.1m in cash

around $14 to retitle in California + $10 UPS Notary:

$0.2m in home equity. ...Thanks

Your welcome!

 

[Dancfo]

Depends on what you have in place in case you're become incapacitated and what you want to have happen to your money once you're gone. A Rev trust normally (always?)provides no asset protection. Some assets really can't even go into a trust, such as an IRA, even though an IRA can name a trust as a beneficiary. If all of your assets are in your name individually, and you do not put your assets in a trust, you would want to make sure you have someone named as your POA. Alternatively, you would probably need a guardianship in case you couldn't manage your own affairs. The biggest issue that would probably answer your question would is with regard to the "final" disposition. Caveat - each state has different "rules" - so answers will vary.

 

[JoeWras]

Trusts can be good, and can be bad.

You are single. I'm starting to think your beneficiaries on IRA/401k are more important right now. Do you have all those correct? First step to do that now! Cost is FREE. Even if you start thinking about a trust, that will be the first thing a good lawyer will ask. Do it now.

The other stuff, I don't know. You are single and presume no kids. Take it slow and do your research.

 

[Golfguy1455]

For all my assets, my beneficiary is listed as my estate or "the estate of....". If I died tomorrow, I'd be OK (lukewarm) with how my assets would be distributed. In the coming months, I will likely update a few things.
Thanks for input

 

[Golfguy1455]

Thanks. I do need to think about what happens if I am not capable of making decisions especially as in get older.

 

[OldShooter]

... Does it make sense to put all my assets in a revokable trust? ...

Maybe, but probably not. Rev trusts are most often sold over free dinners and intended primarily to make money for the seller/attorney.

Use your network of friends and professionals to find and interview one or two attorneys who specialize in trusts and estates. Develop a plan and pay to have it put together. My guess is that you will not need a rev trust for anything. Our plan, which is fairly complicated and includes reciprocal pour-over wills and two post-death trusts cost us about $4K.

A will, a health care directive, a health care POA, an executor, possibly trustees, etc. are all needed to make sure things happen the way you want them to. I'd suggest you select a younger attorney to improve the odds that he/she will still be around to help manage the estate after you check out.

The cost to get all this done right is a pittance compared to the value of your estate.

 

[RunningBum]

Thanks. I do need to think about what happens if I am not capable of making decisions especially as in get older.

I don't think a revocable trust does anything at all to help with this.

You need to determine what it is you hope to accomplish, and look for solutions that do that. What you seem to be doing is looking at a specific solution without a real purpose, at least not one you've communicated.

 

[Blue Collar Guy]

Maybe, but probably not. Rev trusts are most often sold over free dinners and intended primarily to make money for the seller/attorney.

Are they good dinners?

 

[RunningBum]

Just a couple more thoughts from your OP:

I'm 47 yr old single male conidering retirement, so I am trying to get all things in order.

Retiring really has no impact on this. Your 47 with considerable assets, that's why it's a good idea to get things in order.

This is not an area where I am the most informed, but my thinking is that this would be key part of estate plan / will. ...perhaps this would also held protect assets in the future.

What "key part" would this be? And what are you trying to protect assets from?

Also, while you have done well, you're nowhere near hitting the estate tax, unless those laws change. So if you're thinking that a trust will help with estate taxes, that doesn't look necessary.

 

[OldShooter]

Are they good dinners?

I dunno. We get a letter or a postcard every week or two offering free dinners and free lunches at fairly top line restaurants. Lawyers peddling rev trusts & financial "advisors" who are only here to help. So, yes they are probably good. Never have tried one though. The kind of people that need to do that to hustle business are not the kind of people that I hire as professionals. Almost anyone I deal with has a very strong business just from referrals and doesn't need the schlock.

 

[gayl]

We get a letter or a postcard every week or two offering free dinners and free lunches at fairly top line restaurants. Lawyers peddling rev trusts & financial "advisors" who are only here to help. So, yes they are probably good

salesmen. The best advisers don't need to advertise to drum up clients. Mom met with one who just wanted 14.85% sales commission on an annuity. but she needed to sign immediately. You don't have to do anything immediately

 

[RobbieB]

A trust allows your heirs to avoid probate.

If your estate is tiny then probate may be avoided.

Probate is expensive and long (time duration) and attorneys are involved.

You can pay the lawyers before (trust) or after (probate) your choice. Either way they get paid.

 

[RunningBum]

As someone else mentioned, you can do a TOD/POD to bypass probate on the taxable account. In some states you can do this on your house as well. Beneficiary on the IRA bypasses probate as well, right? What's left?

 

[gayl]

In California, everything under $150,000 escapes probate. So I put a TOD / POD on all Investments except the house (bank, SCHWAB, DBP) and then I put the house in trust for about $24 total. I did not pay anyone as my assets are simplistic --- 2 bank accts / 4 brokerage acts / IRA / Roth to get % right

 

[Dancfo]

Thanks. I do need to think about what happens if I am not capable of making decisions especially as in get older.

I don't think a revocable trust does anything at all to help with this.

You need to determine what it is you hope to accomplish, and look for solutions that do that. What you seem to be doing is looking at a specific solution without a real purpose, at least not one you've communicated.

Agreed - start with the goal and find the solution. TOD/Bene designations may be simpler than running something through probate, but even if you don't have any assets going through your estate you may still need someone to parse out your tangible property and to file your final tax return (not that you'll be worrying about paying taxes at that point!!). Also, it helps if there is someone to communicate to the beneficiaries that are named as beneficiaries so that they can claim their $$$.

Also - one of the true benefits of a revocable trust (though I wouldn't suggest one just for this purpose) is that is very helpful when someone becomes incapacitated. The trustee (or successor) can step in upon incapacity of the grantor and start managing the financial affairs almost immediately. There is no need to re-title (if necessary with the institution) accounts in the name of the POA. Again, certain account types of accounts would still require a POA, such as your IRA. Of course, at a younger age incapacity would more likely be from the result of an accident and not an age related mental decline.

However, based on the information so far, I don't think the situation warrants a trust.

 

[jonat]

Also - one of the true benefits of a revocable trust (though I wouldn't suggest one just for this purpose) is that is very helpful when someone becomes incapacitated. The trustee (or successor) can step in upon incapacity of the grantor and start managing the financial affairs almost immediately.

This is in fact the primary motivation for DW and I setting up a revocable trust, and naming a trustee to manage affairs should neither of us be able to do so. We have no close friends or relatives we'd be comfortable taking on this role. DW is concerned that if something happens to me and she becomes incapacitated (family history suggests this is a real possibility), someone would make sure the lights stayed on. Since we already have a relationship with Fidelity, we'll be using their trust services as a contingent trustee (no fee until that becomes necessary.)