Living trusts

[arbrk]

Hey, so I have enough assets and don't want them distributed the way probate would.

Is it worth it to hire someone to help me set up a living trust? I recently bought a house in probate, and the previous owner's friend came by to welcome me to the neighborhood and historic society and recommended the woman she used to do the probate stuff after the previous owner died inestate.

It would be around 3k to set up a living trust and will with this woman along with advance medical directives and power of attorney, etc. Would it be better to do this myself with online software like trustandwill.com or is this something that should be paid for so that your will would be executed as you with without issues? The other option she offered was to go through an online site (she recommended trustandwill.com) with me to explain what each question is asking, because a common issue is that it is unclear or has implications the average person does not know without a lot of research and she does know. This would be significantly cheaper (2-3 hours instead of 7 or so) and I would still get the advice of an attorney with experience.

What is everyone here dong for their trust and wills?

[Henry]

I too want to control (fuck my family) assets upon my demise. Listened to Dave Ramsey and went to MamaBear and did a will in an hour. Drove it down to UPS store and had it notarized and mailed the copies. Lady even let me borrow her tape gun so I could pack.

I believe there is a decorum to it. You need to inform people. No surprises. Money is easy. People always want money. There might be pushback on real estate . People don't want responsibility. The big issue is POA especially with medical directives. People aren't so eager to be the one to pull your plug.

And if your net worth is on the positive side, you should have a will. There is no such thing as "enough." Otherwise it goes to the state and its burden to them. Don't be a dead pain in the ass.

I'm not a lawyer but the only asset I know of that is impervious to probate are certain copyrights. Can't interrupt the chain of ownership.

[chenda]

Definitely use a lawyer with experience in trusts.

And why is this women who you've just met so keen to involve herself in your financial affairs ? I'm hearing alarm bells...

[Western Red Cedar]

I inquired about this a little over a year ago. Still procrastinating though...

viewtopic.php?p=256499&hilit=wills#p256499

[Ego]

Why do you need a trust? Wouldn't a simple will accomplish your goals?

[unemployable]

I have two siblings, both younger. One doesn't need my money and the other doesn't deserve it. In all my accounts that allow it, I have named the same charity as a beneficiary. Interestingly, I've had to be on the phone with Charles Schwab a couple times this month as my assets were transferred over from TD Ameritrade and they axed me who the beneficiary was for "security purposes". At least that transferred over fine.

This accounts for some 88% of my current net worth. The other 12% (savings bonds) I don't worry about for now. This will change if I ever own real estate. I plan to use an LLC or trust to buy if this happens. Mostly to hide my identity and enjoy legal protections and make various transactions regarding the real estate easier, but I'd be addressing succession at the same time.

The cost of using a lawyer to set these up seem to run a few thousand in initial costs and maybe another thousand in annual recurring costs. Worth it to me when the time comes.

And if your net worth is on the positive side, you should have a will. There is no such thing as "enough." Otherwise it goes to the state and its burden to them. Don't be a dead pain in the ass.

Who gets it is determined by common law, with the state as custodian, but the state doesn't "get" it. We still have Fifth Amendment rights in this country.

[Henry]

Who gets it is determined by common law, with the state as custodian, but the state doesn't "get" it. We still have Fifth Amendment rights in this country.

I meant responsibility goes to the state. Some guy died last year with $11M and no will. I think it was Chicago. Biggest estate in US history without a will Big mess. Guy could have taken 15 minutes out to give it to someone.

[basuragomi]

The only convincing reason I've heard for a living trust is if you have an adult dependent child who is both mentally incapable of managing their own financial affairs, and also would lose access to means-tested support programs if the money was in their name. You don't seem to have children. Probate tax is like 1.5% here and a bespoke will is $2k, will a team of lawyers and financial planners really take less than that over the lifetime of the trust?

[arbrk]

Definitely use a lawyer with experience in trusts.

And why is this women who you've just met so keen to involve herself in your financial affairs ? I'm hearing alarm bells...

The previous owner was her good friend, and did not have a will, and that is why the house went to probate. She ended up being the one who had to coordinate everything and get her friend's finances organized and be in charge of probate. They were friends from the historical society in our neighborhood, and because of probate, they used a probate real estate auction broker, who mainly sells to flippers, and priced it such that this was likely. Nobody in the neighborhood wanted the house sold to flippers (it has Contributing status in the historical preservation zone, but historical preservation laws are such that they only apply to the exterior of the house. Flippers could have ripped out all the original details and built ins that her friend had spend 30 years restoring). She said "That's why you always have to have a will" and she was right. I asked about whether she knew anyone and that's when she gave me a recommendation.

[arbrk]

The only convincing reason I've heard for a living trust is if you have an adult dependent child who is both mentally incapable of managing their own financial affairs, and also would lose access to means-tested support programs if the money was in their name. You don't seem to have children. Probate tax is like 1.5% here and a bespoke will is $2k, will a team of lawyers and financial planners really take less than that over the lifetime of the trust?

I do not want my assets and real estate distributed as probate would distribute it. It would give my 2 homes to my mom - which she doesn't want or need the responsibility of dealing with. I would want my man to get the home we currently live in - along with money to pay the mortgage without me upon my death. The rest would go to my sister, who would be responsible for my mom's care when the time comes. I want the money to go to my sister before my mom because my mom has made her wishes clear - that we should run through her assets and put her in a nursing home, so we don't want her to have more assets. I doubt my sister will put her in a nursing home even if she has dementia (which is against my mom's wishes, but I think my sister will think it's wrong) and I would want the money in her account and not my mom's for hiring in-home nurses, or to protect them from being run through if my mom does need 24/7 medical care in a facility.

My sister should also get power of attorney and "pull the plug" rights if I'm incapacitated. She is an ICU nurse and would be the best person to make these determinations. Currently, my mom would get it, and when I get married, my man will get it. But my sister should be the one who has it because she is in the best position to make medical calls.

[basuragomi]

I do not want my assets and real estate distributed as probate would distribute it.

What do you think a will is meant to do?

[arbrk]

What do you think a will is meant to do?

A will still goes through probate. A trust does not. There are court fees, attorney fees and executor fees. It can take months of years for assets to be disbursed to heirs. A living trust avoids that.

[Ego]

A will still goes through probate. A trust does not. There are court fees, attorney fees and executor fees. It can take months of years for assets to be disbursed to heirs. A living trust avoids that.

That may be true for real estate. Is it true if you listed someone as a beneficiary on your accounts?

[chenda]

A will still goes through probate. A trust does not. There are court fees, attorney fees and executor fees. It can take months of years for assets to be disbursed to heirs. A living trust avoids that.

A properly written will should not be particularly problematic or costly to execute. Issues usually only arise if it's contested or if there are complications like multi-jurisdictional assets. A trust would likely be much more complex and expensive to run. As mentioned I suggest you speak to a lawyer and discuss what your aims are, and he or she will be able to advise of the best method of achieving it.

[Sclass]

@Ego A beneficiary isn’t a will. Legally it’s something else altogether.

You don’t go to probate court. The bank calls up the beneficiaries and you bring in a death certificate and they transfer cash and stocks to your account. All cost basis is stepped up automatically to the date of death.

In some ways I see this as superior to a will. A will is grounds for a fight…get everyone in the room with lawyers and start saying who gets what. If you aren’t a beneficiary on a stock account or bank account you won’t even know you’ve been stiffed.

I don’t know much about trusts. They seem superior to wills. My friend recently complained that his wife was taking half his money in a divorce because she and her dad kept their family money in a trust established before their marriage. She and her dad are very wealthy. Does anyone know how this works?

[Chris]

A will also becomes public record after probate, which may be undesirable.

[chenda]

She and her dad are very wealthy. Does anyone know how this works?

Yes they can be used to protect assets from creditors in certain circumstances. The key thing with trusts is the settlor and beneficiary/ies don't own the assets, which could be advantageous or disadvantageous depending on the circumstances. I've considered putting some of my assets in a trust in the future to protect them if I ever become an irresponsible spendthrift. However trusts can be expensive to run, especially discretionary trusts.

[chenda]

A will also becomes public record after probate, which may be undesirable.

Yes especially when people put passwords and other sensitive information in it. A letter of instruction to be kept with a will is much better for this sort of sensitive information as it's not made public.

[IlliniDave]

That may be true for real estate. Is it true if you listed someone as a beneficiary on your accounts?

It might depend somewhat on the state, but I think in general having a death beneficiary (or beneficiaries) named for an account means probate is bypassed. At least that' the case for New York, Illinois, and Alabama.

Living trusts, if you can find a reliable trustee when the time comes, can be a fallback plan in the event of cognitive decline. Although like WRC I'm dragging my feet, it's the leading candidate for what I'm likely to do to have everything "in one place" should I get to the point I have to hand my keys to the bartender and take a cab home.

[The Old Man]

What are you trying to accomplish exactly? ERE is all about DIY. In this particular case you should educate yourself on estate planning. After this personal education then and only then should you decide on the particulars of your estate plan which may if deemed necessary involve professionals. First, read a book. I like the books by Nolo.

I have a Revocable Living Trust which I created with software costing less than $100. However, the bulk of my assets are handled through Transfer on Death arrangements which cost me $0. I also have a will to serve as a backup. I have things setup to where probate is not necessary. Your particular plan will be dependent upon what you are trying to accomplish.