Author Topic: Living Trusts & Estate Planning  (Read 7095 times)

DaveR

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Living Trusts & Estate Planning
« on: October 02, 2015, 01:11:14 PM »
Since I somehow qualify as "wealthy" and [mostly] "retired" I've started thinking more about taxes, estate planning, living trusts, etc.

A quick search on here didn't turn up a lot. I've poked around on the Interwebs and found some info, but not the FIRE-ized version I had hoped for. I'm planning to head over to the good ol' library to pick up a couple of "normal" estate planning books. At some point, it may be worth the expense of sitting down with an attorney to brain pick, but I'm not educated enough on the subject yet (I have time!).

Any pointers or resources anyone can recommend?

CowboyAndIndian

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Re: Living Trusts & Estate Planning
« Reply #1 on: October 02, 2015, 01:13:16 PM »
The Nolo books (http://www.nolo.com/) are pretty good and easy to understand.

I have the estate planning/will books.

AlwaysBeenASaver

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Re: Living Trusts & Estate Planning
« Reply #2 on: October 03, 2015, 12:24:40 PM »
I also found the Nolo books useful. However I would say if you have a complicated estate, it may be worth sitting down with an attorney after you've done your research. Mine isn't complicated so I didn't feel the need for an attorney.

Cathy

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Re: Living Trusts & Estate Planning
« Reply #3 on: October 03, 2015, 04:24:30 PM »
I haven't read any of Nolo's webpages or materials regarding trusts or estates, and I do not know whether those materials contain accurate information.

I do not generally read Nolo at all, but on occasion when I have read pages there, I've noticed errors. For example, Nolo's page "Who is Covered by the Fair Labor Standards Act?" claims that "The FLSA applies only to employers whose annual sales total $500,000 or more or who are engaged in interstate commerce" (emphasis mine). This claim is incorrect in its overbreadth. See, e.g., SEC, INC. v. Puckett, 555 SE 2d 198 n 11 (GA Ct App 2001) ("Inasmuch as it is clear from the plain language of [the statute] that the FLSA requires an enterprise to be engaged in interstate activity and meet the gross dollar volume requirement, we summarily reject Puckett's argument that he was required to prove only that SEC met one of these prerequisites to be covered by the Act.") (emphasis mine). In other words, the Nolo page took a conjunctive requirement and relaxed it into being a disjunctive requirement. This is a serious error.

I wouldn't say you shouldn't read Nolo.com, but if you do read it, you should be aware that it may contain errors. It might be a good way to start your research, but you would have to verify its claims by checking the primary sources (i.e. statutes and case law). I'm a big fan of accessible legal information because I believe everybody should be able to understand the law, but I just want to convey that the law is controlled by the primary sources. Secondary sources, whether Nolo.com or otherwise, "do not have the force of statutory enactment nor do they supersede judicial decisions". Schott, Inc. v. Kalar, 20 CalApp4th 943 n 4 (CA Ct App 1993).
« Last Edit: October 03, 2015, 09:13:43 PM by Cathy »
This post contains only general information on the issues raised by this topic. This post does not provide help tailored to your specific situation. There are many facts that could be relevant to your specific situation and I am not in possession of those facts. If you need help tailored to your specific situation, you should retain an appropriate professional and not rely on this post.

DaveR

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Re: Living Trusts & Estate Planning
« Reply #4 on: October 04, 2015, 10:12:41 AM »
I also found the Nolo books useful. However I would say if you have a complicated estate, it may be worth sitting down with an attorney after you've done your research. Mine isn't complicated so I didn't feel the need for an attorney.

Mine is complicated enough (mainly business items) that I'll need an attorney at some point. However, I have the luxury of time to gain some knowledge before buying attorney time. There wasn't anything decent on the shelf at my local library branch, so I requested a couple of books, including a Nolo book.

I wouldn't say you shouldn't read Nolo.com, but if you do read it, you should be aware that it may contain errors. It might be a good way to start your research, but you would have to verify its claims by checking the primary sources (i.e. statutes and case law).

Agreed. I wouldn't take a web site or book or even attorney as 100% accurate. Particularly when it's so easy to pull up the exact letter of the law. A little bit of knowledge goes a long way to informed decision making, but I'm too lazy efficient to spend hours reading case law when I can more easily reduce the risk of screw-up by using a competent lawyer.

DaveR

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Re: Living Trusts & Estate Planning
« Reply #5 on: October 04, 2015, 10:27:21 AM »
I'm just (in the last couple of days) getting my head around some options.

Has anyone set up a living trust? I'm not planning on dying anytime soon, but like the idea of having complete control of how my estate is handled without all the probate hoopla.

How much complexity does a trust add come tax day? I'm fine doing my own taxes as they are and don't mind adding some work, but how big a mine field is it?

Paul der Krake

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Re: Living Trusts & Estate Planning
« Reply #6 on: October 04, 2015, 10:59:58 AM »
I have found NOLO books to be very accessible. I used one to file my green card application and was pleased that this particular NOLO author was very clear in pointing out the cases where you would be a fool to try doing things yourself, for instance if you've overstayed your legal presence.

Anyway, back to trusts. One of my favorite bloggers recommended The Complete Book of Trusts. I found it a rather challenging read for a layperson, but it struck a good balance between accessibility and depth of the various options presentend. The author is also adament that you find an attorney specialized in trusts, and presents cases where oversights have had catastrophic repercussions. You are also highly recommended to marry once and only once, because issues with ex-spouses and step-children are apparently when trust attorneys bring home the bacon.

Cathy, how would you recommend approaching legal matters, short of becoming an attorney? Is there a good layman's guide somewhere that explains how to look up statutes and case law if necessary?

DaveR

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Re: Living Trusts & Estate Planning
« Reply #7 on: October 04, 2015, 11:05:08 AM »
... issues with ex-spouses and step-children are apparently when trust attorneys bring home the bacon.

No! Sounds like I might need to learn about pig farming, too.

TVRodriguez

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Re: Living Trusts & Estate Planning
« Reply #8 on: October 04, 2015, 11:34:49 AM »
I'm just (in the last couple of days) getting my head around some options.

Has anyone set up a living trust? I'm not planning on dying anytime soon, but like the idea of having complete control of how my estate is handled without all the probate hoopla.

How much complexity does a trust add come tax day? I'm fine doing my own taxes as they are and don't mind adding some work, but how big a mine field is it?

I'm an estate planning attorney. There are many kinds of trusts, but most people are referring to revocable  (living) trusts here.  A revocable trust is not a separate tax entity. If you use a revocable trust to hold your assets during your life, you use your own social security number and all income and expenses are your own. There is no separate tax return to prepare during your lifetime.

Cathy

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Re: Living Trusts & Estate Planning
« Reply #9 on: October 04, 2015, 11:42:32 AM »
Cathy, how would you recommend [researching] legal matters[...]?

There are probably books on how to do legal research intended for nonlawyers. Unfortunately, I don't have a specific recommendation or endorsement.

A lot of the skills required are not specific to law though. Probably the most important skill for legal research is impeccable reading comprehension, understanding all the nuances of the language and not reading things that aren't there. For example, the error I identified earlier in the thread was almost certainly the result of a failure of reading comprehension. The author confused "and" and "or", and it's difficult to imagine what could explain that other than trouble parsing English sentences. You have to master reading comprehension before you can analyse any written instrument, whether it is a statute, a judicial opinion, a contract, a novel, a blog article, or a post on this forum.

Once you've mastered reading comprehension, you need to know where to find the relevant documents for your issue, so that you can read them. That skill is actually specific to law and requires understanding where the law comes from.

Once you find the relevant documents specific to your issue, you need to understand how they interact with all other areas of law, which tends to require a broad base of general knowledge about law. For example, trusts are not really an isolated thing you can learn about on their own. In order to understand the law of trusts, you would also need an understanding of property law, the law of agency, contracts, equitable principles, and a lot of other things. You'd need all that knowledge so that you can properly understand the relevant documents that are specific to your issue.

So, I certainly wasn't intending to suggest that legal research is easy. It will probably take a few years of study to become good at it. I wasn't really suggesting it as a practical course of action for the average person. Most people would be better served by retaining counsel than by trying to become an expert on legal research. However, the abstract point I was making with my earlier post is still important: secondary sources, although possibly helpful, are only descriptions of the law, they aren't the law themselves. This may sound obvious, but I've noticed lots of people, for example, think that publications on the IRS website are the tax code, and that's just not the case.
« Last Edit: October 04, 2015, 11:50:40 AM by Cathy »
This post contains only general information on the issues raised by this topic. This post does not provide help tailored to your specific situation. There are many facts that could be relevant to your specific situation and I am not in possession of those facts. If you need help tailored to your specific situation, you should retain an appropriate professional and not rely on this post.

msilenus

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Re: Living Trusts & Estate Planning
« Reply #10 on: October 04, 2015, 11:59:02 AM »
What the attorney said.  *ahem*

But to add a bit, some quick notes on livings trusts.  I've been living with one for a couple of years now.

First up, retirement accounts aren't covered.  Federal laws constrain inheritance options for those, and they cannot be put into the trusts' name.  (This is my understanding, per my attorney, but it's been a while and I and would be happy to be corrected on it.)  So you want your assets motivating the trust to be unsheltered assets.  This may reduce the attractiveness.  Personally, I got mine set up before I knew about Roth conversion pipelines and after tax -> Roth conversions.  These probably would have changed my decision, as taxable is a much smaller fraction of my projected net worth over the next 20 years than it used to be.

Second, taxes are completely unchanged, but some things aren't.  You'll find occasionally that someone needs your trust documents, and getting them the entire binder for them to pick through and take what they want isn't practical.  I gave up on getting a Vanguard account set up in the trust's name because I didn't want to deal with this.  But I was able to get my Fidelity accounts created by going to a branch, dropping the Trust on the counter, and waiting an hour while the associate figured everything out with the back office.  Right now I'm trying to do a refinance, and they need the trust to be sure I have access to the assets I'm claiming.  I just scanned over the parts that seem to show that, and am waiting to find out if that's good enough.

All that said: I'm happy that I have one.  I just paid slightly more than it is worth to me.

TVRodriguez

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Re: Living Trusts & Estate Planning
« Reply #11 on: October 04, 2015, 12:12:13 PM »
A good estate planning attorney will address ALL assets, including retirement accounts and life insurance. The big thing for the layperson to realize is that you really don't know what you don't know. I hear questions all the time that are simply the wrong questions. This is why I offer a consultation for a fee rather than for free. I provide an education to the client so that they can make an educated choice. If they choose to hire me within a month of the consultation, I credit the amount paid towards the flat fee that I quote them that day. Of course I'm biased, but it's really money well spent. In an hour and a half, you can learn what applies to your particular situation rather than futzing around for months chasing answers to the wrong questions.

Drifterrider

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Re: Living Trusts & Estate Planning
« Reply #12 on: October 05, 2015, 05:22:00 AM »

Mine is complicated enough (mainly business items) that I'll need an attorney at some point. However, I have the luxury of time to gain some knowledge before buying attorney time. There wasn't anything decent on the shelf at my local library branch, so I requested a couple of books, including a Nolo book.


Really?  A lot of people will go to bed tonight with plans for tomorrow but will die before they get there. 

OkieStache

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Re: Living Trusts & Estate Planning
« Reply #13 on: October 05, 2015, 08:13:45 AM »
First up, retirement accounts aren't covered.  Federal laws constrain inheritance options for those, and they cannot be put into the trusts' name.  (This is my understanding, per my attorney, but it's been a while and I and would be happy to be corrected on it.) 
Retirement accounts can be put into a trust.  For 98% of people (give or take 2 percent) there is no need or benefit that outweighs the cost.  While there is seldom a benefit to do so, when there is a reason it is typically a very good and important one.  It pays to do some research.  Basically, if control over the funds and their distribution after you die is more important than income tax considerations and set-up costs, go for it.  The ABA put out a pretty good summary http://www.americanbar.org/newsletter/publications/law_trends_news_practice_area_e_newsletter_home/coordinatingretirement.html, although now a little outdated. 
One thing to remember, if you have non-mustachians that might inherit retirement accounts, prior to 2014 they were exempt from bankruptcy creditors in most places and now inherited retirement accounts are not exempt in bankruptcy.  If interested, U.S. Supreme Court decision is Clark v. Rameker. 

DaveR

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Re: Living Trusts & Estate Planning
« Reply #14 on: October 05, 2015, 10:04:52 AM »
... I have the luxury of time to gain some knowledge before buying attorney time...

Really?  A lot of people will go to bed tonight with plans for tomorrow but will die before they get there.


Yes, really. According to my back of the envelope math, I have a 99.993% of living long enough to learn about and establish a living trust, if appropriate. Decent odds...

And we are talking about trusts and more complex planning than just having a will (which everyone should have). If a chunk of the sky fell on me today, my estate isn't a complete disaster, but I know it could be even better, so I'm using some of my free time to optimize.

Second, taxes are completely unchanged, but some things aren't.  You'll find occasionally that someone needs your trust documents, and getting them the entire binder for them to pick through and take what they want isn't practical.

This is good info. Some of the non-obvious consequences. Shuffling real estate and business assets around means not only work initially, but more hassle in the future. An important factor to consider.

... I wasn't really suggesting it as a practical course of action for the average person. Most people would be better served by retaining counsel than by trying to become an expert on legal research...
... big thing for the layperson to realize is that you really don't know what you don't know...

Exactly.

Current course of action:
1) Read up on the basics (books, web, etc) so I can have an intelligent conversation
2) Find a kick-ass estate attorney; have some candidates, need to interview
3) Deeper-dive research into the areas that the attorney interviews uncover
4) Follow-up and attorney selection
5) Hashing out something to sign
6) Funding that sucker

At this point, a revocable living trust seems to make sense. I'm dealing with hers, mine, and ours. Since"mine" includes a minor child and business assets. Add in some of "our" real estate and "her" assets and the whole thing gets more annoyingly complex than I want.


SnackDog

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Re: Living Trusts & Estate Planning
« Reply #15 on: October 05, 2015, 10:15:26 AM »
You have a decent plan but no need to over-complicate it. We just found the best local estate attorney we could at the best price and let him make recommendations tailored to our specific situation. He was fabulous as this is all he does all day. We did wills, health directives, and living trust all in one go for about $500.   He re-titled our properties for us with the county.  Named trust as primary beneficiary for retirement accounts and we are good to go.
The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind. –Thomas T. Munger

OkieStache

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Re: Living Trusts & Estate Planning
« Reply #16 on: October 05, 2015, 10:32:36 AM »
Current Suggested course of action:
1) Read up on the basics (books, web, etc) so I can have an intelligent conversation [No more than 3 hours]
2) Find a kick-ass estate attorney; have some candidates, need to interview [Don't be surprised/offended if the "interview" costs you]
3) Deeper-dive research into the areas that the attorney interviews uncover
4) Follow-up and Attorney selection and punch list.
5) Research suggested course of action.  Hashing out something to sign
6) Funding that sucker

You will not likely get (and should not expect) an attorney (especially a "kick-ass" one) to tell you what you should do at an "interview."  Give them some broad scenarios and see what they would recommend.  Courtesy of Step One you will have enough information to know if they are on the ball or not.  After you've decided, make an appointment, fill out their paperwork and disclosures (solvency, citizenship, etc.) and THEN get some ideas for your personal situation.  Don't dive deep initially, that's what you pay the attorney for; this area is really complicated.  You need to be cautious that your zeal to understand what you are doing does not drive up the costs.  I don't know where you are, but expect an estate plan like the one you contemplate to run you about 10X SnackDog's rate if you're in the U.S.
Good luck to you!  Sounds like you have a great start to a your planning.

DaveR

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Re: Living Trusts & Estate Planning
« Reply #17 on: October 05, 2015, 01:59:19 PM »
You will not likely get (and should not expect) an attorney (especially a "kick-ass" one) to tell you what you should do at an "interview."  Give them some broad scenarios and see what they would recommend.  Courtesy of Step One you will have enough information to know if they are on the ball or not.  After you've decided, make an appointment, fill out their paperwork and disclosures (solvency, citizenship, etc.) and THEN get some ideas for your personal situation.  Don't dive deep initially, that's what you pay the attorney for; this area is really complicated.  You need to be cautious that your zeal to understand what you are doing does not drive up the costs.  I don't know where you are, but expect an estate plan like the one you contemplate to run you about 10X SnackDog's rate if you're in the U.S.
Good luck to you!  Sounds like you have a great start to a your planning.

A few very good points here. Already past that 3hr recommendation for learning. But I like this stuff, so entertainment value has to be included.

I'm not expecting free advice from an attorney, for sure...you get what you pay for. At the same time, there is a balance to being an educated consumer.
I'm not intimidated in the least by legalese, so probably the most important thing for me to remember is your warning RE:zeal to understand driving up costs. As confirmed by real-life estate attorney TVRodriguez earlier in this thread, mis-education can be as dangerous as no education on the matter.

OkieStache

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Re: Living Trusts & Estate Planning
« Reply #18 on: October 05, 2015, 02:24:43 PM »
Named trust as primary beneficiary for retirement accounts and we are good to go.
Should have addressed this previously.  For all of the reasons stated previously, in the U.S. or for U.S. citizens, naming a trust as beneficiary for retirement accounts is NOT generally beneficial and should not be done without a reason and counsel to make sure your trust is qualified for tax purposes.

One other aside that might be useful when conversing with prospective planners:  If you are talking to an estate planning professional about trusts and they don't discuss "trust protectors" or are able to respond to your questions about the need for one, be very careful (run away).

Dee18

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Re: Living Trusts & Estate Planning
« Reply #19 on: October 05, 2015, 05:05:57 PM »
I set up a revocable living trust for one of the most common reasons: most of my assets are to go to my child...who was 1 when I established the trust, but is now 18.  Even now, I would want a designated older adult doling out the money per the terms of the trust.

Reynold

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Re: Living Trusts & Estate Planning
« Reply #20 on: October 06, 2015, 01:57:34 PM »

Second, taxes are completely unchanged, but some things aren't.  You'll find occasionally that someone needs your trust documents, and getting them the entire binder for them to pick through and take what they want isn't practical.  I gave up on getting a Vanguard account set up in the trust's name because I didn't want to deal with this.  But I was able to get my Fidelity accounts created by going to a branch, dropping the Trust on the counter, and waiting an hour while the associate figured everything out with the back office.  Right now I'm trying to do a refinance, and they need the trust to be sure I have access to the assets I'm claiming.  I just scanned over the parts that seem to show that, and am waiting to find out if that's good enough.


This is probably the most annoying part of it while you are still alive.  My wife and I have been working with my mother-in-law after my father-in-law passed away, and they had a living trust.  It was originally set up when the estate tax kicked in a lot lower, so it is aimed mainly at handling husband/wife credits to pay less taxes.  Now the federal and state exemptions where they live are so much higher that is irrelevant, they have a very simple family structure (2 kids, both reasonably affluent adults, 50% each) and having to provide copies of trust documents to get things into her name after my FIL's passing has been a significant hassle.  When they originally did it, banks and such didn't ask for copies of everything, but now we spent 10-15 hours in the local Chase Bank office over three days to get a new account set up for her, for example.  I think in their case it would have made sense to ditch the trust once the estate tax exemptions were raised, probate is fairly cheap and fast in their part of New York State.  In other states, like New Jersey, ditto (though estate/inheritance tax issues are much worse).  In some states like Florida, from what I have read, probate is much more expensive and slower, so a living trust can make more sense.  We'll look at it again each time we move, really even plain wills/POAs need to be updated sometimes.  My wife ran into an issue with a Power of Attorney for a friend because NY State had changed standard forms a couple years back and an insurance company wanted the NEW form signed. 

Overall, I think the hassle factor for working with the living trust while alive roughly matches the hassle factor of dealing with probate after death, if the same person is doing most of the work, as in the case of my wife. 

DaveR, in your case you may need it a lot more, you need some kind of Guardianship thing set up for the minor child, have separate assets, and so on.  If someone has an inheritee who lives on public assistance, Medicaid, etc., or may be bankrupt or getting sued, living trusts can be very handy to prevent all the assets from getting grabbed by the government or creditors.  Just a warning, though, in my experience the attorneys who go around giving talks on how essential living trusts are may have high fees for handling them after death, my in-laws attorney wanted 1% of the estate for any consults after their death, they won't do hourly.  Conversely, we had a great experience with an attorney who gave a talk who lives locally to us, he recommended against a living trust for a simple situation like ours in the state we live. 

One other note for anyone getting wills, POAs, health care proxies, etc. set up for loved ones to use; US Social Security won't take those, they want their own, special form filled out.   

OkieStache

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Re: Living Trusts & Estate Planning
« Reply #21 on: October 06, 2015, 02:12:50 PM »
If someone has an inheritee who lives on public assistance, Medicaid, etc., or may be bankrupt or getting sued, living trusts can be very handy to prevent all the assets from getting grabbed by the government or creditors.  Just a warning, though, in my experience the attorneys who go around giving talks on how essential living trusts are may have high fees for handling them after death, my in-laws attorney wanted 1% of the estate for any consults after their death, they won't do hourly. 
As Reynold points out, some hucksters have "estate planning packages" that they sell for $25k.  Some people might need that, 99% of people don't.  HOWEVER, if you have special needs kids or there is medicare planning involved, those are specific instances where a specific trust will apply.  For special needs kids, there are Special Needs Trusts.  For long-term care planning there are irrevocable trusts or very tailored revocable trusts that dodge the "any circumstances" test.  In these instances, spending some money can make a lot of sense.  I have never heard of anyone charging a percentage fee for consults after death and that would likely be grounds for censure in my state.  There are firms that have home-offices or management services that will charge a percentage to act as Trustee after death.  I would run away quickly from a percentage-for-consult agreement.
Trusts do not beat the Trustee in a bankruptcy and a bankruptcy Trustee can avoid any trust set up or funded in the last TEN years if a bankruptcy is filed by the original grantee.  Something that some practitioners fail to advise folks. 
Many government agencies, including DOD, won't take forms prepared by attorneys and must use their forms.  If that is an issue, find the nearest military base and have civilian legal assistance or the staff JAG help you fill out the forms for free.

TishaWillemsfqnx

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Re: Living Trusts & Estate Planning
« Reply #22 on: April 19, 2017, 06:06:46 AM »
Have you ever considered hiring an estate planning Peterborough based advisor? They can work closely with you to accomplish not only estate planning, but with other financial matters as well. Working with professional advisors will not only lighten your load, but you will surely learn a lot of things with them as well.

Drifterrider

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Re: Living Trusts & Estate Planning
« Reply #23 on: April 19, 2017, 06:58:35 AM »
When you do find the right attorney (you might also want to look for an attorney who specializes in elder care) you want to know the differences between a revocable living trust and an irrevocable living trust.

Do you have assets you want to protect for yourself, from Medicaid?  You want to ask about the five year look back provision.

Do you want to leave assets to people who might need them but not be able to successfully manage them?

Do you want contingencies?  You might choose to leave assets to an individuals provided they do certain things or refrain from doing certain things (the attorney can tell you the law in your jurisdiction).

A good attorney will be well worth the money you spend and one of the best investments you can make in yourself.

Disclaimer:   I am not an attorney and I did not stay in a Holiday Inn Express.  I have stayed in motels 6.


FinancialDad.org

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Re: Living Trusts & Estate Planning
« Reply #24 on: April 29, 2017, 07:32:08 PM »
Overall, I think the hassle factor for working with the living trust while alive roughly matches the hassle factor of dealing with probate after death.... 

I hear you.  I myself have had mixed experience with setting up accounts in the names of "living trusts".

 - Some financial institutions only asked for the basics (e.g., first and last pages and signature pages).  (My lawyer has a cute (but unprintable) name for this approach..suffice to say CYA would be the kind way to say it.)

 - Some requests were much more detailed.

 - None of the requests were more than "send me the whole trust" (which was, for my mom & dad, ~50 pages).

Hassle? Yes.  But manageable for us.  YMMV.

One thing I will say is that my dad's living trust allowed his assets to skip probate and therefore be (more) private.  This was not a big deal to me or my brother (there wasn't enough of anything to draw any kind of attention), but it was an important point for him.  But..his money, his call.  And we lived with the hassle of the living trusts.

rockeTree

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Re: Living Trusts & Estate Planning
« Reply #25 on: May 05, 2017, 01:54:03 PM »
We have been trying to do the preliminary legwork for this this year too - we have a special needs child who may or may not need full lifetime support but will certainly need someone else in charge of maintaining any benefits and making financial decisions of much significance. The SNT that I can find the most about in our state charges 1.7% management fees (a shock compared to the old Bear Sterns account!) which inclines us to have it funded at our deaths... but we have to balance that with the possibility of costly end of life care depleting resources we didn't shelter earlier. Can fill the gap with extra life insurance if we plan to die young, maybe do that until life insurance gets pricey enough that 1.7% investment fees seem reasonable.... Also have to decide if we want the house in the trust, to go to whoever seems most likely to live with the kid in hopes they could stay in the same place. Lots to think about.

Drifterrider

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Re: Living Trusts & Estate Planning
« Reply #26 on: May 10, 2017, 08:30:49 AM »
In order to place your house in a trust you must own it.

You should establish your trust soonest.  You can fund it at death.  You could buy an insurance policy that names the trust as the beneficiary thereby protecting the assets.  You can assign the trust as beneficiary of your retirement accounts. 

You should consult with an attorney that specializes in creating trusts in your jurisdiction as laws vary from place to place (state laws).

rockeTree

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Re: Living Trusts & Estate Planning
« Reply #27 on: June 19, 2017, 09:33:20 PM »
So I have asked around for referrals and gotten three; the two attorneys I am still considering both cost $400-$500 to interview. I don't really know how to choose the better one absent that initial consult. One set up a trust for a friend who liked her fine; younger, a little less conveniently located. The other did estate planning for another friend who was very happy with his services after his wife died. More senior guy, right in town but not as clear on how much he's done with special needs trusts specifically (but it does seem to align with some of his volunteer board positions). Rough prices seem similar. Any thoughts on how to pick and if it's necessary to spend a grand talking to both of them in depth before picking one?


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TVRodriguez

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Re: Living Trusts & Estate Planning
« Reply #28 on: June 22, 2017, 08:57:33 AM »
So I have asked around for referrals and gotten three; the two attorneys I am still considering both cost $400-$500 to interview. I don't really know how to choose the better one absent that initial consult. One set up a trust for a friend who liked her fine; younger, a little less conveniently located. The other did estate planning for another friend who was very happy with his services after his wife died. More senior guy, right in town but not as clear on how much he's done with special needs trusts specifically (but it does seem to align with some of his volunteer board positions). Rough prices seem similar. Any thoughts on how to pick and if it's necessary to spend a grand talking to both of them in depth before picking one?


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Some thoughts:

1. Those are reasonable fees for an initial consultation (mine is $300, fyi).  Do they offer flat fee plans?  Many of us do, and I freely tell clients over the phone the range of fees I anticipate quoting -- I don't want someone to waste their time or mine with a visit if they can't afford my services.  Do they accept credit cards or payment plans?  Some do and some do not.  Ask.

2. Did you get to speak to the attorneys by phone already?  Go with the one you like, who listened to you, and who you feel like you can talk to--you'll have lots of personal things to discuss and you don't want to feel shy/stupid/cut off during your meetings. 

3. Will they provide you with electronic versions (pdfs) of your documents once they are completely executed?  Do they charge extra for that?  Ask in advance if this is important to you.  I offer to email clients pdfs at their request, which they can then store how they wish (and provide to banks if necessary), in addition to an indexed binder of copies of all documents and free storage of all originals. 

4. You can likely check with your state bar association (online or by phone) to see if the lawyers are in your state bar's trust/estate law section of the bar.  Most estate planners I know are in the probate and trust law section of the state bar association.  You want someone who does this and only this -- not someone who is filling in litigation or  real estate downtime by "writing simple wills."

5. You can check to see if a lawyer is AV rated by Martindale Hubbel (martindale.com or lawyers.com), which has been rating lawyers for over a century, I think.  An AV rating generally means that at least 18-20 other lawyers in that area of practice find that attorney to be ethical.  Not all lawyers are rated, though, so lack of an AV rating does not mean that the attorney is unethical, merely that s/he hasn't been reviewed by Martindale. 

6. There are also ratings and reviews posted on different websites, like avvo.com and others, where some attorneys have client reviews and other attorney endorsements posted on a public profile.  Sometimes that can be helpful (not always) so it's worth seeing if they're listed, but a low rating or lack of reviews can simply mean they're busy enough not to have to rely on that for business generation.  FYI, at least on avvo, there are both ratings and starred reviews.  The ratings are on a 10 point scale: attorneys can't pay to increase their rating, but there are ways attorneys can bring up a score somewhat (a point or two).  Most attorneys who don't bother to fill out their profile start with a 6.5 or so. Filling out the profile can bring it up to an 8.  Attorney endorsements can bring it up another point. Awards, publications, and involvement in a legal organization can bring it up another point.  It took me a bit to get to 10.  Client reviews are on a 1 to 5 star scale and do not affect the rating on the 10 point scale. 
« Last Edit: June 22, 2017, 09:02:22 AM by TVRodriguez »

DavidAnnArbor

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Re: Living Trusts & Estate Planning
« Reply #29 on: June 22, 2017, 01:02:22 PM »
Wow really helpful info. I really need to look into this.

Guide2003

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Re: Living Trusts & Estate Planning
« Reply #30 on: June 22, 2017, 09:57:54 PM »
I'm sure OP has made his moves since the thread was resurrected, but I ran across this post recently and thought it was an interesting perspective. It relies a lot more on strong relationships and personal responsibility, but those are pretty Mustachian traits. I'm only 30 so not in the market per se, but would be curious to hear critiques of this method.
http://actionecon.com/building-generational-wealth/
“We think sometimes that poverty is only being hungry, naked and homeless. The poverty of being unwanted, unloved and uncared for is the greatest poverty. We must start in our own homes to remedy this kind of poverty.” Mother Teresa

rockeTree

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Re: Living Trusts & Estate Planning
« Reply #31 on: June 22, 2017, 10:27:50 PM »
Hey thank you so much for the list of things to consider, that's so helpful to me. I've mostly been talking to the paralegals and all have given me flat prices with reasonable caveats about complexities that can raise costs. Just said no to one that was about 3x other prices - said I had several references I trusted and his fee schedule was so high I couldn't see choosing him and didn't want to waste his time. I'm out of town right now but will go through those resources when I get home and go for initial consult with the one I feel best with after that, and then if the consult has me confident proceed. If not can go to the backup :-)


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TVRodriguez

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Re: Living Trusts & Estate Planning
« Reply #32 on: June 26, 2017, 10:00:38 AM »
I'm sure OP has made his moves since the thread was resurrected, but I ran across this post recently and thought it was an interesting perspective. It relies a lot more on strong relationships and personal responsibility, but those are pretty Mustachian traits. I'm only 30 so not in the market per se, but would be curious to hear critiques of this method.
http://actionecon.com/building-generational-wealth/

I didn't read the whole thing, but I do not generally recommend using an UTMA account as the blogger plans to do for grandchildren, for the very reason s/he mentioned:  you wind up handing thousands of dollars over to a young adult with no brakes or reins whatsoever (UTMA goes to age 21, not 18, which was age of majority under UGMA).  And you put that money in when the child was born?  You don't know what type of disability that child may develop, or if one becomes a bad seed.  That's just short-sighted.  Better to put that money into a 529 account, at least, if you want to avoid trusts, where you maintain complete investment control, you maintain control over distributions, and you can name a beneficiary but still have the option to change the beneficiary later.  Yes, distributions are limited to "education" but that has a broader interpretation than just tuition.

Also, the blogger gets overly complicated.  One thing to remember: you should not try to rule from beyond the grave.  Choose your trustee wisely.  Do your best to be a good parent.  Put some general guidelines in writing (many of my trusts contain these already), but don't get lost in details.  You cannot predict the future.  Neither can I.

Dicey

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Re: Living Trusts & Estate Planning
« Reply #33 on: June 26, 2017, 10:28:00 AM »
PTF
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

rockeTree

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Re: Living Trusts & Estate Planning
« Reply #34 on: August 08, 2017, 06:17:42 AM »
No longer intestate! Thanks for the thoughts and for making me feel accountable to someone for getting my affairs in order. :-)


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TVRodriguez

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Re: Living Trusts & Estate Planning
« Reply #35 on: August 08, 2017, 02:12:16 PM »
No longer intestate! Thanks for the thoughts and for making me feel accountable to someone for getting my affairs in order. :-)


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Congratulations!  Clients often tell me at signings how they feel like a weight has been lifted off their shoulders.  It's a back-burner issue for many many people, but it's one of those things that you also know you're "supposed" to do.  So actually getting it done feels very satisfying (I'm told). 

rockeTree

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Re: Living Trusts & Estate Planning
« Reply #36 on: August 11, 2017, 07:15:54 AM »
We will be back in a few months for medical power of attorney once the kid turns 18 - no need for full guardianship I don't think but his ability to make sound medical decisions when presented with explanations by strangers is unlikely to be good. Of course we have already protected him from suddenly inheriting and promptly losing or spending the family fortunes on soda and chips which should help his diet at least :-)

GettingClose

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Re: Living Trusts & Estate Planning
« Reply #37 on: August 16, 2017, 01:58:04 PM »
Just a note on the hassle of providing the full trust to banks, etc., in order to move assets into it:  We got a Certification of Trust, a one-page notarized document that basically provides all the info about the trust, without revealing any of its contents.  We've had no trouble using it and it certainly makes things simpler.  Don't know if it is useful in all states.