Who Should You Trust About Trusts

[Bogin Munns & Munns]

A lot of people who are new residents in Florida do not understand our probate process. Every state is different when it comes to probate and Florida happens to have a long, complicated and expensive process that is required if you have no estate plan at all or if you have a Last Will & Testament. Having a Will does NOT avoid probate.

Probate in Florida takes a long time (10-18 months), is expensive (3% plus of the estate value), and is public. So trusts have evolved as a way to completely avoid probate in Florida and in other states as well. There is now a national Uniform Trust Code.

Many people have a simple spill-out trust just to avoid probate and it is fast, easy and inexpensive to administer for the basic estate. Those with greater wealth often waste opportunities for asset protection with trusts by having basic spill out provisions. Trusts are a great tool to preserve wealth through generations by avoiding the unfriendly hands of divorce or lawsuits, but also to lock in estate and generation skipping tax free growth.

Recently, a group has been canvasing The Villages advocating against trusts – calling them nightmares. One reason given is income taxes. Yes, a trust does reach the highest income tax bracket with nominal income, but very few trusts actually pay income tax because the income is distributed out to the beneficiaries, who pay the tax at their lower tax brackets. Even an ongoing dynasty trust, if properly drafted, will allow for the distribution of income to avoid high tax rates.

Another reason given to avoid trusts is the need for a pour-over will, which must go through probate. But when a person fully funds their trust, there are no assets governed by the pour-over will and thus, no probate. The mere existence of the pour-over will does not mandate probate. The key is to title assets in the name of the trust.

An added suggested “horror” is the integration of trusts and IRAs. Using a trust with IRAs does require advanced tax knowledge that not all attorneys possess. However, given the elimination of the life-time stretch for inherited IRAs under to the SECURE ACT, a trust is a great way to re-gain asset protection for IRA money after it is converted out of the IRA. Avoiding high trust level income taxes will need to be considered so it is important to have a trust drafted so that the trustee has discretion to optimize tax planning.

With so much misinformation and conflicting opinions, who do you trust? I’m an attorney here in The Villages, but I’m also a resident of The Villages. I wouldn’t want to get bopped on the head with a golf ball while out on the course, or wacked with a pickleball when on the courts for misleading a neighbor.

Everyone’s situation is different and personal and there isn’t always a one size fits all, but generally I recommend an ongoing dynasty trust. However, if you want a Will, I do those too.

Katherine A. Barski, Esquire
352-391-6031
8564 E. County Road 466. Suite 102
The Villages, FL 32162

[EdFNJ]

Sounds like a commercial with some good info but I'll ask for some free advice since you are getting free advertising! :D My father passed away ~3yrs ago had no estate and basically left nothing (he had a rev mort) except for an old car (taken care of) and a $279 balance in his BOA checking account which seems to be untouchable without paying a $300 fee to file a "small estate affidavit" to claim the $279. The $279 isn't important in the general scheme of things but since I was the POA on the account they keep sending me statements and it is annoying to keep seeing the bank has "his" $279. I tried writing a check but that didn't work. Any way to get his $279 that BOA is holding onto without spending $300 ???

[retiredguy123]

Sounds like a commercial with some good info but I'll ask for some free advice since you are getting free advertising! :D My father passed away ~3yrs ago had no estate and basically left nothing (he had a rev mort) except for an old car (taken care of) and a $279 balance in his BOA checking account which seems to be untouchable without paying a $300 fee to file a "small estate affidavit" to claim the $279. The $279 isn't important in the general scheme of things but since I was the POA on the account they keep sending me statements and it is annoying to keep seeing the bank has "his" $279. I tried writing a check but that didn't work. Any way to get his $279 that BOA is holding onto without spending $300 ???
I had a similar situation when I was the executor for a deceased friend. I received a small insurance refund check made out to "the estate of" the deceased person. I tried to cash the check, but my bank would not accept the unprobated will as proof that I was the executor. So, I signed the check and deposited it at the ATM machine with no problem. I would suggest that you write another check and try to deposit it electronically. In fact, I might try it several times.

[Stu from NYC]

I had a similar situation when I was the executor for a deceased friend. I received a small insurance refund check made out to "the estate of" the deceased person. I tried to cash the check, but my bank would not accept the unprobated will as proof that I was the executor. So, I signed the check and deposited it at the ATM machine with no problem. I would suggest that you write another check and try to deposit it electronically. In fact, I might try it several times.

Interesting advise but are you sure you can do this legally?

[retiredguy123]

Interesting advise but are you sure you can do this legally?
I could because I was the named executor and trustee and authorized to sign the estate checks. But, because the will did not need to be probated, the bank manager was overly careful and refused to accept the will or the trust documents as proof that I had the authority.

[Bogin Munns & Munns]

There is no way around the fee/small estate affidavit. At some point, the bank may surrender the funds to the Florida Department of Unclaimed Funds. The State has its own set of hurdles to claim unclaimed funds, but you may not be required to go through the Court process.

[rjm1cc]

There is summary probate in Fl for estates under 75,000. Under certain circumstances the homestead is not counted as part of the 75000. An attorney is not needed.
Assets can avoid probate if the title to the assets is a transfer on death or the assets has a beneficiary. These are usually financial accounts. Best to discuss with an estate planning attorney.

[retiredguy123]

There is summary probate in Fl for estates under 75,000. Under certain circumstances the homestead is not counted as part of the 75000. An attorney is not needed.
Assets can avoid probate if the title to the assets is a transfer on death or the assets has a beneficiary. These are usually financial accounts. Best to discuss with an estate planning attorney.
I agree. If you can put all of your financial assets in "transfer on death" accounts and other property is owned as "joint tenants with right of survivorship", you may not need a will or a trust. Ownership will transfer automatically when you die. And, it provides peace of mind.

[EdFNJ]

There is summary probate in Fl for estates under 75,000. Under certain circumstances the homestead is not counted as part of the 75000. An attorney is not needed.
Assets can avoid probate if the title to the assets is a transfer on death or the assets has a beneficiary. These are usually financial accounts. Best to discuss with an estate planning attorney. Yes, that's what I was refering to in my post. $300 bucks filing fee for a $279 checking account balance (in my case).

[EdFNJ]

I had a similar situation when I was the executor for a deceased friend. I received a small insurance refund check made out to "the estate of" the deceased person. I tried to cash the check, but my bank would not accept the unprobated will as proof that I was the executor. So, I signed the check and deposited it at the ATM machine with no problem. I would suggest that you write another check and try to deposit it electronically. In fact, I might try it several times. Except I'm not the executor (there was no estate, no will and no property). I was his Power of attorney which is dissolved upon death. That being said, I did try that :D and the check bounced because the account was blocked after his death.

[EdFNJ]

There is no way around the fee/small estate affidavit. At some point, the bank may surrender the funds to the Florida Department of Unclaimed Funds. The State has its own set of hurdles to claim unclaimed funds, but you may not be required to go through the Court process.
Yea, that's what BOA told me. I figured maybe there was some sort of "backdoor." They told me "after 5 years" and "good luck,"

[Bogin Munns & Munns]

When it comes to the Florida home, putting another owner on the title as a joint tenant with rights of survivorship is very risky because you lose control by losing the ability to sell or mortgage the property yourself, alone. Also, whenever you add another person to an asset as an owner, that other person's debts and liabilities can attach to you asset.

If the only asset without a beneficiary designation is the Florida home, the estate can utilize a summary probate administration. A lawyer to accomplish this would be highly recommended.

[retiredguy123]

Except I'm not the executor (there was no estate, no will and no property). I was his Power of attorney which is dissolved upon death. That being said, I did try that :D and the check bounced because the account was blocked after his death.
Bummer. But, I can't help but think that BOA could make it happen if they wanted to. They could close the account and give you the money if you are the legal heir, especially if you are a customer. My bank for over 20 years almost lost all my business when they refused to cash a legal check from USAA because the branch manager refused to accept a will and a trust that proved that I was the executor and trustee of the estate.