Will or Trust??

[GSPHUNTER]

A couple of things should be mentioning here. Even with a will, it could take up to a year to get it settled, depending on how much and how many survivors are involved in the estate, One problem I had when I was the personal representative for my brother estate was, I had two other siblings pass before he did and their children became heirs to the estate. Those children had moved away and nobody kept in contact with them and had no idea where they were. I took 8 months of research to find them. For anyone who thinks they don't need a will, " because my family will do what is right" Is making a big mistake. A friend if mine, a retired LEO, does not have a will, he has a substantial estate He told me, he trust his family to "do the right thing by one and other". I told him for a person who dealt with human nature as much as he did in his line of work, he should know better. When it comes to money, the knifes come out.

 

[KenLee]

Any of you have experience with choosing a trust over a will? I know the general idea is a trust avoids probate (to an extent), but with an 18 yo kid, is it markedly wiser to go the trust route since almost everything asset-wise is already beneficiaried?

We’ve chatted to a lawyer , but wasn’t as helpful as I thought- he was like…it depends. We already have a will, but it’s needing updating. In the event we were
Both hit by a bus the trust manager would have to be out of state. If that makes a difference.

Gimme your experience good or bad.

There's always an "it depends" in the answer. Just gotta have the nerve to make a decision and not rely on the lawyer to give you a 100% answer when there is none

 

[49ereric]

A couple of things should be mentioning here. Even with a will, it could take up to a year to get it settled, depending on how much and how many survivors are involved in the estate, One problem I had when I was the personal representative for my brother estate was, I had two other siblings pass before he did and their children became heirs to the estate. Those children had moved away and nobody kept in contact with them and had no idea where they were. I took 8 months of research to find them. For anyone who thinks they don't need a will, " because my family will do what is right" Is making a big mistake. A friend if mine, a retired LEO, does not have a will, he has a substantial estate He told me, he trust his family to "do the right thing by one and other". I told him for a person who dealt with human nature as much as he did in his line of work, he should know better. When it comes to money, the knifes come out.

Depends on where the money is. CD’s or IRA’s with named POD individuals can be dispersed quickly whether a Will or none.
roll over the IRA’s or the tax man wants a cut no escaping that.
I’ve been executor twice with no Will’s and it sucks.

 

[GSPHUNTER]

Depends on where the money is. CD’s or IRA’s with named POD individuals can be dispersed quickly whether a Will or none.
roll over the IRA’s or the tax man wants a cut no escaping that.
I’ve been executor twice with no Will’s and it sucks.

Agree. My brother did have an account which listed my sister and I was benieficaries, and that money was paid out right away.

 

[ODB]

roll over the IRA’s or the tax man wants a cut no escaping that.

Can you explain what you mean by this ?

 

[Beendare]

Brilliant fellas - thanks for your thoughts.

Curious who you named as trustees? Anyone use a “professional” service like a trust bank?

Part of our issue is that the list of potentials is very small. And none are local.

Typically the Will will leave everything to the trust. You need both Along with a medical directive.

The advantage to a trust over a will is many. Without a will your assets will go into probate court, which incurs, hefty fees, and taxes to the state. I’ve heard cases of up to 40% of the assets….a trust and a will avoids this.

There is one more factor that it’s important. You understand how these assets are treated tax wise. Typically the attorney will not give you tax advice. You also need to consult a CPA or have an idea how these assets are treated.
An example would be your home; currently whomever gets the home after you die gets it at the current market value, they call it stepped up basis. Current limit on this stepped up basis is $13.61M for single, $25.84M for married couples.

Trusts are pretty much boiler plate stuff if you are the avg Guy. I would look at the checklist at inexpensive outfits that do this first Before going the attorney route. Assuming you understand tax consequences and such, that might be a better option. Just make sure real estate is retitled AND Recorded Whether you use an atty or not.

Trustee; Be advised, this person/ entity has a lot of power over your assets, can draw a salary and fees for holding that position. The wrong bank or atty will milk this for all its worth. Assuming you have little kids, this takes some thought into who gets them….when and how your assets will be allocated- for example; If you give little kids the home, what about payments, taxes, maintenance until they are old enough?

Lastly, you can restrict fees allowable to the trustee…and put stipulations And/ or milestones on payments to them and your kids. These stipulations can help cause less infighting between relatives in the future.

Its something only you can think through….whether you use an atty or not.
Edited mistaken dictation

 

[49ereric]

Can you explain what you mean by this ?

IRA’s cashed out from a deceased relative are subject to income tax.
i know that first hand. Rolling over is the only escape.

 

[SDHNTR]

IRA’s cashed out from a deceased relative are subject to income tax.
i know that first hand. Rolling over is the only escape.

It’s not exactly a rollover. It’s called an inherited IRA, and it doesn’t avoid taxes, you can just spread the tax burden of distributing out over a 10 yr period.

But yes, an immediate distribution will be fully taxed as regular income.

 

[ODB]

You guys are tops. Really appreciate this info!

 

[ddd-shooter]

A couple of things should be mentioning here. Even with a will, it could take up to a year to get it settled, depending on how much and how many survivors are involved in the estate, One problem I had when I was the personal representative for my brother estate was, I had two other siblings pass before he did and their children became heirs to the estate. Those children had moved away and nobody kept in contact with them and had no idea where they were. I took 8 months of research to find them. For anyone who thinks they don't need a will, " because my family will do what is right" Is making a big mistake. A friend if mine, a retired LEO, does not have a will, he has a substantial estate He told me, he trust his family to "do the right thing by one and other". I told him for a person who dealt with human nature as much as he did in his line of work, he should know better. When it comes to money, the knifes come out.

Your friend is not just naive, but cruel. Wife and I have been through a few deaths with “no will.” Of course these people were relatively younger than the average age of death so they hadn’t planned at all.

It’s not fun. At all. All of the work is placed in people who are grieving and unsure of the wishes of the dead.

To others reading this: get a will or trust legally done ASAP if you haven’t already-no matter your age

 

[GSPHUNTER]

Your friend is not just naive, but cruel. Wife and I have been through a few deaths with “no will.” Of course these people were relatively younger than the average age of death so they hadn’t planned at all.

It’s not fun. At all. All of the work is placed in people who are grieving and unsure of the wishes of the dead.

To others reading this: get a will or trust legally done ASAP if you haven’t already-no matter your age

Take that to the bank. I did not have that issue with one of my brothers who had a will. the other was a real pain, he did not have a will. almost two years for a small estate. Get a will and trust. TODAY.

 

[hillbillyfab]

Both are needed. We learned this after setting up a trust years ago for my first few cans.

 

[deezs]

Not trying to get off topic, but I am wondering what everyone's thoughts are about putting rules or restrictions on the assets, specifically any land assets?

The reason I ask is my grand parents had significant land assets along with monetary assets. They intended these to be used to help future generations, think help with school or a piece of land to build or recreate on. So all there stuff was in a trust and split between 2 sons, one son (my father) totally blew his money and sold off all but one parcel of land that connects to my house. We were able to get him to create a trust with the land to leave to my sister and I. We are now trying to decide if we should put stipulations on the land asset when we create a trust. Our intention is to leave it to her son / my nephew. My nephew is 14, he loves to hunt and comes out to hunt deer, turkey, squirrel, sheds and just hiking. The restrictions would be along the lines of not being able to develop or sell if a family member wants it, but I also don't want it to be a burden to someone.

Any thoughts?

 

[GSPHUNTER]

Not trying to get off topic, but I am wondering what everyone's thoughts are about putting rules or restrictions on the assets, specifically any land assets?

The reason I ask is my grand parents had significant land assets along with monetary assets. They intended these to be used to help future generations, think help with school or a piece of land to build or recreate on. So all there stuff was in a trust and split between 2 sons, one son (my father) totally blew his money and sold off all but one parcel of land that connects to my house. We were able to get him to create a trust with the land to leave to my sister and I. We are now trying to decide if we should put stipulations on the land asset when we create a trust. Our intention is to leave it to her son / my nephew. My nephew is 14, he loves to hunt and comes out to hunt deer, turkey, squirrel, sheds and just hiking. The restrictions would be along the lines of not being able to develop or sell if a family member wants it, but I also don't want it to be a burden to someone.

Any thoughts?

Some areas/states may have rules regarding certain restriction. If you have a trust lawyer he should know the answers to any and all your questions.

 

[Oldbuff]

Will in addition to trust. As your family's circumstances change, be sure to keep them updated.

 

[Minute_of_Antelope]

In another life I was an estate planning attorney. My non-comprehensive two cents on the other comments:
1) a revocable inter vivos trust is a viable probate avoidance tool but only helps the assets you put in it. Your attorney wasn’t wrong when he said it depends because your asset picture may not justify the complexity of an IV Trust. In my not-constituting-legal-advice opinion, most folks who have basic assets (home, 401k, life insurance, etc), an IV trust is not necessary as you can avoid probate on most of those assets individually.
2) within a will you can create a testamentary trust that springs into existence and shields assets until your kids turn 30 or whatever. That’s what I did with mine. I picked 30 because that’s usually when people get all their financially reckless dumb stuff out of the way. Car accidents, failed first marriages, dumb college majors… I said USUALLY.

If you want to do a trust, knock yourself out. They have utility. But I think they’re sometimes overkill for a lot of folks. Probate can take while, yes, but you can usually keep a lot of your assets out of it without a trust in my experience.

{insert disclaimer here about this not being legal advice, no Atty-client relationship formed on rokslide, blah blah}

 

[fwafwow]

Get an attorney. It’s not that expensive and your company EAP may provide one for free or at a discount.

We have a will and a trust. I honestly can’t remember why we needed both, but it made sense at the time.

Find another lawyer and one that specializes in this. So many things they are aware of that we are not. Also they give you a non biased, non emotional perspective which you need, trust me you do.

In another life I was an estate planning attorney. My non-comprehensive two cents on the other comments:
1) a revocable inter vivos trust is a viable probate avoidance tool but only helps the assets you put in it. Your attorney wasn’t wrong when he said it depends because your asset picture may not justify the complexity of an IV Trust. In my not-constituting-legal-advice opinion, most folks who have basic assets (home, 401k, life insurance, etc), an IV trust is not necessary as you can avoid probate on most of those assets individually.
2) within a will you can create a testamentary trust that springs into existence and shields assets until your kids turn 30 or whatever. That’s what I did with mine. I picked 30 because that’s usually when people get all their financially reckless dumb stuff out of the way. Car accidents, failed first marriages, dumb college majors… I said USUALLY.

If you want to do a trust, knock yourself out. They have utility. But I think they’re sometimes overkill for a lot of folks. Probate can take while, yes, but you can usually keep a lot of your assets out of it without a trust in my experience.

{insert disclaimer here about this not being legal advice, no Atty-client relationship formed on rokslide, blah blah}

Sorry to be late to this - what did you do OP? Note - a Will and a Revocable Living Trust are not mutually exclusive. You should always have a Will. Whether you should also have a RLT is another question.

I started to reply/quote more of the above posts, but it's easier to quote the few above that are the best. While not every other post was wrong, quite a few are.

To correct the most glaring IMHO:

• "it depends" is a correct answer. A shady attorney would instead sell you on a revocable living trust, even if you don't need one.
• In some states it is not worth the hassle of creating and funding a revocable living trust to avoid probate, as probate isn't that bad.
• A revocable living trust will do nothing to protect your assets from your creditors, and probate avoidance isn't always worth the hassle of funding a revocable living trusts. If someone dies with a messed up situation that would require a long probate, a RLT won't fix that.

The only advice I can give that you can rely upon is that you shouldn't rely upon advice, especially legal matters, on the internet. Yes, that's completely circular and it's worth exactly what was paid for it.