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Old 09-06-2017, 08:36 AM
 
Location: Idaho
1,452 posts, read 1,153,447 times
Reputation: 5482

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I have been wondering whether we should establish a trust especially after reading all the threads here about long term care and estate planning.

We just received an invitation for a free dinner seminar "7 Reasons Why Trusts Are Preferred Over Wills". We usually ignore or toss those free dinner seminar invitations away but I decide to have a closer look at the invitation.

The invitation claimed that in 1991 AARP advised members to use trusts instead of wills and gave 7 reasons. I think that only 2 of the 7 reasons may apply to us (my reasons are in blue).

1. Living trusts help avoid guardianship in the case of disability. Not applicable since the chance of both of us become disabled at the same time is very tiny & if so, our only daughter is the obvious guardian.

2. Trusts avoid the expense and delay of probate court proceedings. Not applicable since we only one daughter and will leave most things to her.

3. Trusts can provide asset protection for your home and life savings from nursing home costs. Maybe applicable. From little that I have read, only irrevocable trust can provide the protection. We don't have LTCi and plan to self-insured. We also don't like the idea of asset shielding for Medicaid (just like our parents). However, I would like to be more educated on the subject.

4. Trusts are private while wills expose your assets and heirs to public scrutiny. Not applicable We are neither rich nor famous so I don't think that anyone would care to know about our wills!

5. Trusts can protect inheritances from children's divorces. Probably not applicable. Our only daughter has just recently engaged and does not seem to be crazy about children. We will just have to be contented with the grand puppies.

6. Trusts avoid the additional probates required for out-of-state property. Not applicable now or in the future.

7. Trusts can protect your assets if your spouse remarries after your death. Maybe applicable. I have always thought we can address this in our wills but maybe it is better to address this potential concern with a trust.

I told my husband about the invitation and convinced him to go to the dinner just to learn more. We may have to endure a boring, mind-numbing presentation loaded with exaggerated scary facts and likely to be bothered with follow-up emails and phone calls. However, we may learn few things at the seminar.

I'd appreciate comments and feedbacks from retirees who have trusts and who have decided that wills are good enough for them.
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Old 09-06-2017, 08:55 AM
 
Location: Close to an earthquake
890 posts, read 676,795 times
Reputation: 2390
Quote:
Originally Posted by BellaDL View Post
I have been wondering whether we should establish a trust especially after reading all the threads here about long term care and estate planning.

We just received an invitation for a free dinner seminar "7 Reasons Why Trusts Are Preferred Over Wills". We usually ignore or toss those free dinner seminar invitations away but I decide to have a closer look at the invitation.

The invitation claimed that in 1991 AARP advised members to use trusts instead of wills and gave 7 reasons. I think that only 2 of the 7 reasons may apply to us (my reasons are in blue).

1. Living trusts help avoid guardianship in the case of disability. Not applicable since the chance of both of us become disabled at the same time is very tiny & if so, our only daughter is the obvious guardian.

2. Trusts avoid the expense and delay of probate court proceedings. Not applicable since we only one daughter and will leave most things to her.

3. Trusts can provide asset protection for your home and life savings from nursing home costs. Maybe applicable. From little that I have read, only irrevocable trust can provide the protection. We don't have LTCi and plan to self-insured. We also don't like the idea of asset shielding for Medicaid (just like our parents). However, I would like to be more educated on the subject.

4. Trusts are private while wills expose your assets and heirs to public scrutiny. Not applicable We are neither rich nor famous so I don't think that anyone would care to know about our wills!

5. Trusts can protect inheritances from children's divorces. Probably not applicable. Our only daughter has just recently engaged and does not seem to be crazy about children. We will just have to be contented with the grand puppies.

6. Trusts avoid the additional probates required for out-of-state property. Not applicable now or in the future.

7. Trusts can protect your assets if your spouse remarries after your death. Maybe applicable. I have always thought we can address this in our wills but maybe it is better to address this potential concern with a trust.

I told my husband about the invitation and convinced him to go to the dinner just to learn more. We may have to endure a boring, mind-numbing presentation loaded with exaggerated scary facts and likely to be bothered with follow-up emails and phone calls. However, we may learn few things at the seminar.

I'd appreciate comments and feedbacks from retirees who have trusts and who have decided that wills are good enough for them.
What's on the menu, that would help me to decide along with if there was anything else more exciting that would conflict with attending this event.

Not sure about your state law or the size of your estate but probate fees could be more than the cost of administering a living trust post-mortem.

If it's filet mignon, maybe go but if it's ground round, wait for the next invite is my cyberspace food for thought reply.
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Old 09-06-2017, 09:10 AM
 
Location: California
4,554 posts, read 5,467,791 times
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Find a good elder law attorney who can get to know your particular situation in your area. Local laws may vary according to your assets so this forum may not provide accurate information. Also, no matter what you do be sure to revisit all your documents such as will and power of attorney at least every five years to resign them which keeps them "fresh" as people change their minds or others may challenge on the grounds of being too old.

Go to the seminar if you like, but always contact a qualified local attorney before signing!
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Old 09-06-2017, 09:14 AM
 
Location: Idaho
4,621 posts, read 4,460,757 times
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I also am leery about such invitations. The ol' cliché about free lunches. Wouldn't be surprised if it were a 'high pressure' sales gig. It is my understanding that it is preferable in addition to having a family trust, to also have a will to back it up.

All I really know about the whole thing is that my parents had a living trust, (I was first executor), and things were very, very simple after they both passed on. When my dad died, nothing really happened because my mom was still around. When she died, all I had to do is settle her bills, cremate her remains, (per her wish), and divvy up stuff and money that were left over equally among the remaining children.

I will be getting a family trust once I get resettled, hopefully in another month or so. But, I'm not going to go with someone who sponsors luncheons. Those events have to be paid by someone, and guess who that is? I'll poll my neighbors and church family to see who they recommend.
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Old 09-06-2017, 10:32 AM
 
Location: Idaho
1,452 posts, read 1,153,447 times
Reputation: 5482
We have no intentions of signing up right away with the law firm who sponsors the luncheons. If we are convinced that a trust is a good idea, we would first check with the firm who prepared our legal documents (wills, living wills and POA) years ago. We will also check for references and compare several places before selecting an attorney.

Yes, I am very well aware that legal documents vary from state to state. This is the reason that my sister who is an estate attorney in CA only gives the family general suggestions and never specific advice.

My PIL had a revocable living trust with my husband being the first executor. They had the trust done while in Michigan then moved to Arkansas and finally Minnesota. Our recollection is that there were only minor changes which were done by the local attorneys after each move. However, this may not be the case depending on what state that we will relocate. We may wait until our relocation to decide what to do. Right now, we are still not quite sure whether it is a good idea to move west especially with all the news about drought and wild fires! Concerns about climate and weather pattern changes have started to be a factor in our relocation decision.

About the dinner, it will be held at a nice Italian restaurant. We had dined there before and the food and wine selections are quite decent.

BTW, I was not seeking for online legal advice - two of my sisters are lawyers ;-). The question "Do we need a trust?" just means this is the reason that I accepted the dinner seminar invitation.

I started this thread because I am interested in learning about other retirees' experience, their reasons for getting a trust or not getting a trust, to accept or not accept a dinner seminar invitation. I like the idea of making the decision based on the quality of the dinner ;-)

Last edited by BellaDL; 09-06-2017 at 10:49 AM..
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Old 09-06-2017, 10:44 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,546 posts, read 39,924,861 times
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as mentioned in detail in your previous post...

Depends entirely on the state and your wealth / assets / need for a trust (National cap of ...$5.49m at the moment) BUT... my income tax free state has the TOP estate tax 20% with a low thresh-hold n($2m).
...2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. That means an individual can leave $5.49 million to heirs and pay no federal estate or gift tax.Oct 25, 2016
https://www.thebalance.com/state-est...-chart-3505462
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Old 09-06-2017, 11:05 AM
 
Location: New Mexico
6,558 posts, read 3,656,219 times
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I have one and find that it is probably is a good thing on the long run but is sort of a pain on occasion. I own property in a couple states and moved from one to the other. Trusts were more common in the former state but something of an oddity where I moved. When I tried to transfer money from one trust account to another the bank wouldn't do it at first because they figured I was somehow incompetent and not responsible because I had a trust. I had to show them the trust documents and my wife's death certificate and contact my original lawyer for a statement before they would listen to reason.

That was only part of the problem. This was the same bank chain that I had at my former home. It finally turned out that the original bank branch went through a computer system change and didn't carry over the trust documentation associated with my accounts. I had original bank documents showing a trust account but their system didn't have it properly recorded so my new bank branch figured I was nuts.

My local title company also had a problem with it when I bought my new house. They wanted to do one property recording in my name and then later come back in a month or two and do a second recording for transfer into the trust. (That way they get more than one fee for the same property purchase.) Their supposed reasoning was that the county recorder of deeds might not understand the trust. I bought other property in the same county earlier with no problems or confusion on the trust.
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Old 09-06-2017, 11:50 AM
 
Location: Sierra Nevada Land, CA
8,392 posts, read 9,136,940 times
Reputation: 13030
Mrs5150 is an estate planning attorney. Point 2 is a big reason. With a trust you do save time- no court hearings and the estate saves money. Mrs5150 makes $7000 to $20000 per probate. And the delay of the distribution can be many months. And beware of trust mills with the free lunch.
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Old 09-06-2017, 12:18 PM
 
Location: Silicon Valley
3,610 posts, read 1,625,423 times
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Hey Op. If someone's willing to teach for free, it's not necessarily a terrible idea. It's a difficult industry to grow into so these seminars are fairly common. If they get to aggressive with the sales pitch afterwards and won't give you time, take a long time and explain to them that you're concerned about your beer bottle collection and want a trustee that will take care of your 48 cats and would they be willing to do that?

It's worth learning though. Basically if you have real estate, it's worth knowing. If you have a significant position in a company that is below FMV, it's also worth knowing. If you have a crazy family, it's worth knowing too. However, it takes time to also feel comfortable with a trustee. After all, you are talking about ending the ownership of your assets...or putting yourself in a likely bad tax situation if your retain control. You need to talk with them from a legal operation standpoint for your situation, and then follow up with your accountant to understand the tax ramifications. They can be quite large.

I can give a couple horror story anecdotes:

1) A + B marry and have child Z. A passes. B remarries to C. C has has grown children of their own. B passes and C remains in the home. C places home in trust for her children, ignoring Z.

2) A has real estate. A + B marry and have child Z. Child Z is handicapped but is promised the estate for to cover their care when A and B are gone. A passes before B. B sells the estate and lives well. Met Z in a state hospital.

3) A + B marry and have child Z and several real properties. A passes. B, at age 88, takes on a 26 year old girlfriend (G) who becomes his caregiver. G takes out loans against all properties shortly before B's passing and then flees the country. Z still inherits, but all the properties are leveraged. (Terrible, but this Z was the perfect recipient if there ever was one)

4) A + B are bf and gf. A has 3 children with other women. A dies in a terrible accident and is awarded a significant settlement. The attorneys of the B and the children cannot reach agreement. Eventually the award is split 4 ways after half of the award is used to cover probate costs.

5) See Prince

6) A + B are married and have more money than they plan to spend. A + B have children of various responsibility levels. A + B establish generations skipping trusts for the benefit of their grandchildren as well as those that they want to ensure receive something that are not family. (Horror story avoided)

7) A + B have a family farm with a very low basis that has been passed forward for generations and is expected to remain. The farm has equipment and facilities that make separation difficult. Due to land appreciation, passing the land forward again will trigger estate taxes. No child has financial ability to buy the entire farm. A trust is established to avoid gift taxes and define beneficiaries. (This can also be structured differently)
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Old 09-06-2017, 12:33 PM
 
Location: Tucson Arizona
3,876 posts, read 1,648,337 times
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my husband was executor of his sister's estate, with no trust. What a nightmare, it took nearly a year to get everything worked out.

I was executor of my parents's trust, things went smoothly, bing bang boom done.

We keep meaning to create a trust, but haven't done it yet. I believe you can do it economically online.
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