Good Lord, the longer I do probate work, the angrier I get at my fellow lawyers. So many dang unnecessary trusts that they charged an arm and a leg for when they were not in the least bit needed and in fact have created more of a problem than any benefit.
The latest - an unfunded trust, the will leaves everything to the trust. The trust says when I die, the trustee shall pay all estate expenses and debts and taxes and then distribute the property to certain people. That is what a will is for. This trust is nothing more than a way to justify charging more for estate planning fees. What a stupid waste. Now the property has to be transferred into the trust and then out of the trust. That makes more work and recording fees for no reason.
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LawyerLady
I can explain it to you, but I can't understand it for you.
What would you recommend as the best trust to set up?
DH and I have been thinking about setting up a trust for our kids and grandkids.
We have heard some terrible horror stories from families locked into trusts and unable to get out of it. Some of the lawyers around here are kind of shaddy in the trust area. Families have been burned by the lawyers.
One lawyer set herself up as the trustee and then appointed her own brother as another trustee after the couple died. They robbed the trust blind before a family member stepped in and got it stopped.
I truly wish I understood all that a trust entails.
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I drink coffee so I don't kill you.
I quilt so I don't kill you.
Do you see a theme?
Faith isn't something that keeps bad things from happening. Faith is what helps us get through bad things when they do happen.
What would you recommend as the best trust to set up?
DH and I have been thinking about setting up a trust for our kids and grandkids.
We have heard some terrible horror stories from families locked into trusts and unable to get out of it. Some of the lawyers around here are kind of shaddy in the trust area. Families have been burned by the lawyers.
One lawyer set herself up as the trustee and then appointed her own brother as another trustee after the couple died. They robbed the trust blind before a family member stepped in and got it stopped.
I truly wish I understood all that a trust entails.
Most people do not need trusts unless maybe they live in a state with estate or inheritance taxes. I understand California probate fees can be high even though they don't have an estate tax.
The federal tax exclusion for 2019 is over 11 million dollars. Most states do not have an inheritance tax.
My main problem with trusts are threefold - first, they are very expensive to create and then there are annual Trustee fees. Too expensive, really. Second - most people that are named as Trustees have no idea what they are doing, and that 25-50 page trust document looks like gobbledygook gook to them. And third - exactly as you said, there isn't really any oversight on the Trustees. There is no one to answer to except the beneficiaries, who would have to take legal action if they thought they were being robbed, whereas in probating a will, you have to answer to the Court if an heir complains.
So, the first question to ask is why do you think you need a trust? Are your children currently minors? Are your kids special needs? Drug addicts? On disability and can't inherit? Is there family property that you never want sold? (I actually don't like that one, just because you are attached to property doesn't mean your grandkids have to be) Those are pretty much the reasons I see for a Trust.
I get a lot of people that want a trust for their adult kids and I always ask - Why don't you trust your kids with money? If their answer is that they will spend it, well so what? You are gone, why do you care? Why can't they spend it?
I often do testamentary trusts for minor children where the executor keeps it in trust until a certain age with the permission to use it for health or education. But those terminate once the kid reaches a certain age.
Additionally, if you do the trust wrong, you could nullify the benefit of stepped up cost basis - the most excellent benefit of dying your kids will benefit from if you have stocks, property, or other appreciable assets.
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LawyerLady
I can explain it to you, but I can't understand it for you.
We have trusts. Because our children are minors, and want to make sure the money is spent properly on them. My parents have a trust because they think it will avoid probate.
We have trusts. Because our children are minors, and want to make sure the money is spent properly on them. My parents have a trust because they think it will avoid probate.
Here in Georgia, probate is easier than handling a Trust, in most cases.
For my kids, I have a testamentary trust if I die before they are 25 or graduate college, whichever occurs first.
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LawyerLady
I can explain it to you, but I can't understand it for you.
i have a trust. My house is part of it. when I pass 1/2 of all my estate passes into the trust, life ins, 401K, bank accounts. !/2 of my money, passes right to DS if he so chooses, other half goes into the trust for DD. My bro's and DS (all very trustworthy) are executors. DD is allowed college expenses but can't get the rest until she is 25. This was done to protect my assets from DD's father tying it up in court and draining assets for legal fees and so he has no access to it. I have legal insurance at work so all the trust cost was the $100 filing fee in court.
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Sometimes you're the windshield, and sometimes you're the bug.
When we made our will it is stated that our assets will go into a trust for our Dds until they are 25 if we pass before they are of age, but this thread has me confused.. I don't think we actually set up the trust, is that something we need to do now or does it happen when/if we die?
When we made our will it is stated that our assets will go into a trust for our Dds until they are 25 if we pass before they are of age, but this thread has me confused.. I don't think we actually set up the trust, is that something we need to do now or does it happen when/if we die?
Yes you have to establish it but courts don't like a trust established without some amount of asset being placed in it. LL can fill you in.
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Sometimes you're the windshield, and sometimes you're the bug.
When we made our will it is stated that our assets will go into a trust for our Dds until they are 25 if we pass before they are of age, but this thread has me confused.. I don't think we actually set up the trust, is that something we need to do now or does it happen when/if we die?
You have a testamentary trust. That is what I have. It is only if needed and will be funded by your executor. The will outlines the trust and the trustee powers.
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LawyerLady
I can explain it to you, but I can't understand it for you.
When we made our will it is stated that our assets will go into a trust for our Dds until they are 25 if we pass before they are of age, but this thread has me confused.. I don't think we actually set up the trust, is that something we need to do now or does it happen when/if we die?
You have a testamentary trust. That is what I have. It is only if needed and will be funded by your executor. The will outlines the trust and the trustee powers.
Thank you for clarifying. I was concerned I had set it up wrong.
