RetireBy90
Thinks s/he gets paid by the post
So my sister and her DH had just setup a trust on advice of a lawyer "friend". I'm on tap to be the executor of our mothers estate, and also look over her investments while she ages. Since I am on tap for the finances my sister asked that I talk to mom about setting up a trust.
A few details, my mom has about $500K of investments and a paid for house (about $150k). Her investment accounts all have assigned befenficaries. Her intent is equal share to her 3 kids. She has also put the house in a "Transfer on Death" or TOD status. Her understanding is that will avoid probate.
My understanding is that a trust can be used to solve several problems or situations:
1) Pass assets without cost of time of probate
2) Somehow sometimes used to pay less inheratance tax
3) Care for mom should she become not able to make financial decisions
4) Other specific cases, like fund and continue care for children needing special care.
My analysis has lead me to believe:
1) Would be covered with the TOD or beneficaries, I can take the time to probate anything left that is not transfered and I have verified her investments have the proper benif designation.
2) Mom's estate would not be subject to death tax due to $5M limit for federal and her state
3) She has a living will including POA whereby my brother is empowered to make medical decisions, my bother and sister are both co-owners on checking account, and I have a general POA and she signed POA forms from here investment house.
4) Mom doesn't have any special case like this.
So does anyone see something I don't understand (keep it on point, I know this is a open line) or something I'm missing? We had considered a trust for us and came to same conclusion, not really needed.
Finally, how does a trust affect the death tax, if you are over the exemption?
Thanks for any information not already covered.
A few details, my mom has about $500K of investments and a paid for house (about $150k). Her investment accounts all have assigned befenficaries. Her intent is equal share to her 3 kids. She has also put the house in a "Transfer on Death" or TOD status. Her understanding is that will avoid probate.
My understanding is that a trust can be used to solve several problems or situations:
1) Pass assets without cost of time of probate
2) Somehow sometimes used to pay less inheratance tax
3) Care for mom should she become not able to make financial decisions
4) Other specific cases, like fund and continue care for children needing special care.
My analysis has lead me to believe:
1) Would be covered with the TOD or beneficaries, I can take the time to probate anything left that is not transfered and I have verified her investments have the proper benif designation.
2) Mom's estate would not be subject to death tax due to $5M limit for federal and her state
3) She has a living will including POA whereby my brother is empowered to make medical decisions, my bother and sister are both co-owners on checking account, and I have a general POA and she signed POA forms from here investment house.
4) Mom doesn't have any special case like this.
So does anyone see something I don't understand (keep it on point, I know this is a open line) or something I'm missing? We had considered a trust for us and came to same conclusion, not really needed.
Finally, how does a trust affect the death tax, if you are over the exemption?
Thanks for any information not already covered.