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If the assets had been placed in a TRUST there would not be a need for an estate. Her home would be owned by the trust, her bank accounts would have been in the trust name, etc. She would be the beneficiary of the trust while alive, signing the checks, etc. The trust would be set up, so she was in complete control as long as alive and could do anything with any of her assets as long as she is alive. Just in her trust name, not her own. On her death, the next trustee steps into the picture, and is now the beneficiary. No Probate. No stress. Setting up the trust costs about what it costs to make a good will. Good thing at her death, there is no probate or probate expense. There is no 4 to 12 months to worry about before the ownership changes to the beneficiary of her will like with a will.
If the assets had been placed in a TRUST there would not be a need for an estate. Her home would be owned by the trust, her bank accounts would have been in the trust name, etc. She would be the beneficiary of the trust while alive, signing the checks, etc. The trust would be set up, so she was in complete control as long as alive and could do anything with any of her assets as long as she is alive. Just in her trust name, not her own. On her death, the next trustee steps into the picture, and is now the beneficiary. No Probate. No stress. Setting up the trust costs about what it costs to make a good will. Good thing at her death, there is no probate or probate expense. There is no 4 to 12 months to worry about before the ownership changes to the beneficiary of her will like with a will.
This is correct, but very difficult for a non-lawyer to implement. Consult a trusts and estates attorney.
My mother-in-law suffered a debilitating stroke over the winter and is in a nursing home. She likely doesn't have much time left. In the mean time, my husband has power of attorney over her finances. Is there anything he needs to do financially before she dies that would make sense tax-wise versus doing it after she dies?
This is what she has:
She owns a house worth about $100K. It is in her name and my husband's name, although not with survivorship. He will be selling this house. It can be sold now or later.
She has an annuity IRA worth about $85K
She has another annuity (not IRA) also worth about $85K
She has mutual funds worth $30K
She has CDs worth $60K
She has about $20K in her checking account which will pay for her funeral and other expenses. The checking account is joint with my husband.
These are all of her assets. My husband is an only child and is the beneficiary on anything that has a beneficiary.
We were just going to plug along and take care of things after she passes, but just want to make sure there isn't something that should be done beforehand either because of taxes or because there is less complicated paperwork.
If you have any tips, let me know. Thanks!
If your husband has POA to sell the house, she will not be eligible to utilize Medicaid, if she will ever need to, for at least (I think) 3 years after the sale.....
Location: Chapel Hill, NC, formerly NoVA and Phila
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Originally Posted by Chaffeetrekker
If your husband has POA to sell the house, she will not be eligible to utilize Medicaid, if she will ever need to, for at least (I think) 3 years after the sale.....
Fortunately, she has lifetime long-term care insurance so she will not need Medicaid. Her days are numbered in the nursing home anyway.
The house. I'm not sure what you mean when you state that your H is on the deed but that his mother is the owner. Everyone named on a deed has some type of interest in the property. Tenants in Common? Joint Tenants? Remainder of Life Estate? hmm.
I don't believe you need to consult with an estates attorney, but I do suggest you consult with a financial or tax professional to determine whether it is best to wait until after your MIL dies before selling the home. In general, there is a tax advantage to selling/transferring ownership of the home AFTER the owner dies (stepped up basis). But this might not apply in your particular situation.
I would urge you to see the attorney and get it all straight now.
My father died in 2003, my mom in 2009, and my H in 2012. None of them did any kind of planning. I am still slugging away at collecting the estates 11 years later. And I have had to pay significant legal fees as well.
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