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Old 06-02-2016, 11:21 AM
 
9,446 posts, read 6,549,098 times
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Quote:
Originally Posted by mathjak107 View Post
no great benefit as very few of us really want to be saddled with a piece of property forever . the whole advantage is things avoid probate and you can add stipulations and instructions .

the real powerful advantages are only in an irrevocable trust . reducing estate taxes , creditor protection , medicaid planning , etc. all these things are not an advantage of anything revocable

Property in a revocable trust can be sold; you aren't "saddled with it forever". You can avoid probate and keep them for any period you choose. Many investment properties provide a sizable income, even enough to avoid medicaid for those who prefer that.

Last edited by Harpaint; 06-02-2016 at 12:12 PM..
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Old 06-02-2016, 12:36 PM
 
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sure it can be sold if the trust allows but the trust by itself adds nothing to that equation of passing it between generations that you can't do without the trust
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Old 06-02-2016, 12:39 PM
 
Location: Myrtle Creek, Oregon
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My parents put their assets into a revocable trust that became irrevocable when one of them died. My mother outlived my father by 15 years, so we are faced with paying capital gains on 15 years of his half of the estate. If they had just let her inherit, there would be no capital gains. At the time they formed the trust, the estate tax exemption was low enough they were worried about going over. Since then the exemption has been raised by millions, and their estate would never have been subject to taxation. When their largest farm sells, the capital gains will be large enough that it will push all of the kids into AMT territory.
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Old 06-02-2016, 12:42 PM
 
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this is why you really need a skilled estate attorney and not some cheap general practitioner . there are so many ramifications to everything you do or don't do .
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Old 06-02-2016, 12:45 PM
 
Location: Florida
6,608 posts, read 7,291,546 times
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Quote:
Originally Posted by Larry Caldwell View Post
My parents put their assets into a revocable trust that became irrevocable when one of them died. My mother outlived my father by 15 years, so we are faced with paying capital gains on 15 years of his half of the estate. If they had just let her inherit, there would be no capital gains. At the time they formed the trust, the estate tax exemption was low enough they were worried about going over. Since then the exemption has been raised by millions, and their estate would never have been subject to taxation. When their largest farm sells, the capital gains will be large enough that it will push all of the kids into AMT territory.
I think a disclaimer trust would have helped a little. As the laws change you do have to update your documents but the attorney who wrote the trust could have provided some language to help with changing tax limits. This shows that it is important to get an expert and not someone who just sells trusts.
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Old 06-02-2016, 12:46 PM
 
Location: 89052 & 75206
8,103 posts, read 8,284,205 times
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Quote:
Originally Posted by Larry Caldwell View Post
My parents put their assets into a revocable trust that became irrevocable when one of them died. My mother outlived my father by 15 years, so we are faced with paying capital gains on 15 years of his half of the estate. If they had just let her inherit, there would be no capital gains. At the time they formed the trust, the estate tax exemption was low enough they were worried about going over. Since then the exemption has been raised by millions, and their estate would never have been subject to taxation. When their largest farm sells, the capital gains will be large enough that it will push all of the kids into AMT territory.
That could have been avoided by setting up the Trust correctly so assets split at one death and making the house go into a ByPass trust and the balance of trust assets into another trust.
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Old 06-02-2016, 01:10 PM
 
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Quote:
Originally Posted by mathjak107 View Post
sure it can be sold if the trust allows but the trust by itself adds nothing to that equation of passing it between generations that you can't do without the trust
The trust avoids probate. It also can keep some assets in the family as a group, which is sometimes desirable.
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Old 06-02-2016, 01:31 PM
 
Location: Myrtle Creek, Oregon
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Quote:
Originally Posted by Harpaint View Post
The trust avoids probate. It also can keep some assets in the family as a group, which is sometimes desirable.
That must be a local thing. In my state, all inheritance goes through probate. A will makes things simple, a trust makes things more complex, but everything goes through probate.
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Old 06-02-2016, 02:49 PM
 
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Quote:
Originally Posted by Harpaint View Post
The trust avoids probate. It also can keep some assets in the family as a group, which is sometimes desirable.
that is what i said , it is good for avoiding probate . but there are downsides too and probate may be the lessor of the evils .
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Old 06-02-2016, 05:24 PM
 
9,446 posts, read 6,549,098 times
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Quote:
Originally Posted by Larry Caldwell View Post
That must be a local thing. In my state, all inheritance goes through probate. A will makes things simple, a trust makes things more complex, but everything goes through probate.

I know you can't do it in Oregon. But I don't think California is alone in allowing it.
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