Trusts

[Jim1mack]

First marriage. 47 years. One adult child. Mortage. After we both pass our child is listed as the beneficiary on our investment and bank accounts. Quit Claim Deed includes our child. Our will shows everything going to our child. Our child is our POA. Living will is basically DNR.

Don’t know what we may be missing. Without bringing up any extenuating circumstances - do we need a trust?

[Spartan86]

IANAL, but having joint ownership with your adult child exposes you, and him potentially to on another’s liabilities. If you want to keep it simple, it seems a Ladybird deed might be better, and just today a thread started on the subject.

Trusts cost money to set up, but allow you to anticipate some future possibilities- does your son pre-decease you heaven forbid, does he divorce/marry/have a child etc. A consult with an estate attorney could be enlightening.

[vintageogauge]

Have a consultation with Amy Pittman and play it safe. Not that expensive and will help you sleep at night.

[Stu from NYC]

You need to consult an elder law attorney. Why would you trust what amateurs would say here?

We did use the Pittman office and found them to be thorough.

[rjm1cc]

The answer depends on what state you live in. The purpose of a trust would be to avoid probate and the related costs.
One way to avoid probate is to have all your financial account list your child as beneficiary. These avoid probate. So, what other assets do you have. Probably Car, home furnishings etc. Your state laws are important. In Florida there is Summary Administration. Your home, if a homestead property and left to your child would avoid formal probate. Two cars would also avoid probate. Your remaining assets passing under you will would have to be under 75,000. Read up on Fl Summary Administration and then see if your state has something similar. By the way the power of attorney is null and void at your death.

[retiredguy123]

The answer depends on what state you live in. The purpose of a trust would be to avoid probate and the related costs.
One way to avoid probate is to have all your financial account list your child as beneficiary. These avoid probate. So, what other assets do you have. Probably Car, home furnishings etc. Your state laws are important. In Florida there is Summary Administration. Your home, if a homestead property and left to your child would avoid formal probate. Two cars would also avoid probate. Your remaining assets passing under you will would have to be under 75,000. Read up on Fl Summary Administration and then see if your state has something similar. By the way the power of attorney is null and void at your death.
A lot of retirees in The Villages have financial assets that can easily be designated as POD (payable on death) that will avoid probate. Their only significant non-financial asset is their house, which can be deeded as a ladybird deed and also avoid probate. So, for many retirees, they do not need a trust. But lawyers love to sell trusts because they make a lot of money on them. They make money when they prepare the trust and also when they review and revise the trust.

I had a friend who passed away a few years ago and his only heir was his son. He had a trust that was about 2 inches thick, which accomplished nothing because the son had full knowledge and control over everything my friend owned.

[manaboutown]

See an estate attorney. I see several issues here. A trust can be of great value to its beneficiaries for various reasons.

Google is your friend, too, in discovering why and how.

[dewilson58]

Have a consultation with Amy Pittman and play it safe. Not that expensive and will help you sleep at night.

:BigApplause:

[Marine1974]

First marriage. 47 years. One adult child. Mortage. After we both pass our child is listed as the beneficiary on our investment and bank accounts. Quit Claim Deed includes our child. Our will shows everything going to our child. Our child is our POA. Living will is basically DNR.

Don’t know what we may be missing. Without bringing up any extenuating circumstances - do we need a trust?
A trust protects you from your estate having to go through probate . All your bank accounts, life insurance and the deed to your house should list the trust as your beneficiary . The trust should include a transfer on death for your house to the surviving spouse. After the last surviving spouse passes the title would be transferred to the trust .

[RoboVil]

First marriage. 47 years. One adult child. Mortage. After we both pass our child is listed as the beneficiary on our investment and bank accounts. Quit Claim Deed includes our child. Our will shows everything going to our child. Our child is our POA. Living will is basically DNR.

Don’t know what we may be missing. Without bringing up any extenuating circumstances - do we need a trust?
The main advantage to a revocable trust is to avoid probate and thus maintain privacy and speed up the transfer of assets. As a general rule, you put real estate and non-retirement financial assets in the trust. If you have substantial money in non-IRA accounts then a trust would be good to avoid public disclosure. Only 5 states allow "Ladybird" transfers, Florida being one of them.

[JoelJohnson]

One thing to think about is that if the child is on the deed, then they inherit the house at what they paid for the house which means they will have to pay capital gains on the house when they sell. If they just inherit the house then there is a step up basis which means no capital gains.

[G.R.I.T.S.]

Consider a trust with a wrap around will.

[HJBeck]

I doubt that you benefit by it even though some lawyers will try to sell you on it. From what you say it seems you won’t save ennough assets remaining to put the rest of your estate in full probate process, except if you have a lambergini or two. I would check to see what the value of your remaining probatable estate is to be sure you are under the maximum level to avoid full probate process.

[Singerlady]

First marriage. 47 years. One adult child. Mortage. After we both pass our child is listed as the beneficiary on our investment and bank accounts. Quit Claim Deed includes our child. Our will shows everything going to our child. Our child is our POA. Living will is basically DNR.

Don’t know what we may be missing. Without bringing up any extenuating circumstances - do we need a trust?
See a Florida attorney if you’re a permanent resident here.

[Blueblaze]

Every lawyer will tell you you need a trust, but honestly, why would you want to complicate an uncomplicated estate? If you don't have a blended marriage with heirs strewn all over creation, or complicated business interests, I don't understand why everyone thinks they need a trust. Your plan of adding your kid to your deed is fine, it's just a minor complication if you sell, since you'll need his signature. A lady bird deed is better, but probably not worth messing with at this point.

Like you, the bulk of our estate passes directly to our kids equally, through beneficiary declarations. That gives them the money to immediately to handle the burial and household bills until probate settles and the house and personal property is sold. The will basically just covers the personal property, and there's not much of that to argue over, anyway. Nobody wants our china or wedding rings. They already have nicer vehicles. Why would we complicate things by throwing a bunch of household junk into a trust?

[retiredguy123]

Every lawyer will tell you you need a trust, but honestly, why would you want to complicate an uncomplicated estate? If you don't have a blended marriage with heirs strewn all over creation, or complicated business interests, I don't understand why everyone thinks they need a trust. Your plan of adding your kid to your deed is fine, it's just a minor complication if you sell, since you'll need his signature. A lady bird deed is better, but probably not worth messing with at this point.

Like you, the bulk of our estate passes directly to our kids equally, through beneficiary declarations. That gives them the money to immediately to handle the burial and household bills until probate settles and the house and personal property is sold. The will basically just covers the personal property, and there's not much of that to argue over, anyway. Nobody wants our china or wedding rings. They already have nicer vehicles. Why would we complicate things by throwing a bunch of household junk into a trust?
I totally agree. Another reason lawyers want you to get a trust is because, when you buy or sell property, you need to go back to the lawyer to revise the trust and to pay an additional fee. That is why they won't give you an electronic copy of the trust.

[ndf888]

IANAL, but having joint ownership with your adult child exposes you, and him potentially to on another’s liabilities. If you want to keep it simple, it seems a Ladybird deed might be better, and just today a thread started on the subject.

Trusts cost money to set up, but allow you to anticipate some future possibilities- does your son pre-decease you heaven forbid, does he divorce/marry/have a child etc. A consult with an estate attorney could be enlightening.
Totally agree. There are a few scenarios that could make the OP and/or his family members vulnerable. I’d get a simple trust for the house only to avoid probate. You can also get your POA and living docs done while you are at it. It should not be more than $500-600. We had a great experience with Sham Shanawany.

[Eg_cruz]

First marriage. 47 years. One adult child. Mortage. After we both pass our child is listed as the beneficiary on our investment and bank accounts. Quit Claim Deed includes our child. Our will shows everything going to our child. Our child is our POA. Living will is basically DNR.

Don’t know what we may be missing. Without bringing up any extenuating circumstances - do we need a trust?
The thing that a trust can do is make your inheritance, creditor and predator proof.

We had a client who told his dad he wanted to get a divorce. He was filing for divorce. Two days later his father passed away. His father had everything in a trust because the inheritance was in the trust that his inheritance did not become part of the divorce as much as his ex-wife fought and fought and fought for 50% of the father’s inheritance, she didn’t get because it was in her trust so when people are talking about it makes it creditor and predator proof. It’s for the things that your child could be going through at the time of the inheritance. That’s what you need to think about.

[Eg_cruz]

I totally agree. Another reason lawyers want you to get a trust is because, when you buy or sell property, you need to go back to the lawyer to revise the trust and to pay an additional fee. That is why they won't give you an electronic copy of the trust.
I respectfully disagree at the top of my head. I can tell you three different scenarios with our clients. I’m not a lawyer, but I deal with the senior market. We had one where the son was filing for divorce when the father passed away at that time, the ex-spouse wanted 50% of the father’s inheritance, she didn’t get it because the funds were in a trust. Another was a brother passed away and his inheritance was going to the sister who was on Social Security disability had it not been in trust that would’ve thrown her off of her disability, but because the funds were in a trust they were able to give her a monthly Income off the trust and not disturb the Social Security disability. The last we had a person who was just finishing the final stages of the divorce when his mom died and so again the spouse went to try to get 50% of that inheritance because the divorce, even though they were in the final stage, it wasn’t finalized, but again because the funds were in a trust They were able to protect it.
It’s not always whether or not it’s an easy estate or if it’s a complicated estate or if it’s blended families or you’re leaving out a child it really a lot of times comes down to protecting the creditors and predators because you never know what your children could be going through at the time you pass so for their protection that’s where a trust comes in.

[Rainger99]

The main advantage to a revocable trust is to avoid probate and thus maintain privacy and speed up the transfer of assets. As a general rule, you put real estate and non-retirement financial assets in the trust. If you have substantial money in non-IRA accounts then a trust would be good to avoid public disclosure. Only 5 states allow "Ladybird" transfers, Florida being one of them.

If your non-IRA accounts have TOD (transfer on death), they would be payable on death. They would not be publicly disclosed and would not go through probate.

Avoiding Probate in Florida (https://www.nolo.com/legal-encyclopedia/florida-avoiding-probate-32070.html#:~:text=If%20you%20register%20an%20acco unt,Stat).

I would say that 90% of people do not need trusts - but lawyers sure like to tell you that you do!

[manaboutown]

I respectfully disagree at the top of my head. I can tell you three different scenarios with our clients. I’m not a lawyer, but I deal with the senior market. We had one where the son was filing for divorce when the father passed away at that time, the ex-spouse wanted 50% of the father’s inheritance, she didn’t get it because the funds were in a trust. Another was a brother passed away and his inheritance was going to the sister who was on Social Security disability had it not been in trust that would’ve thrown her off of her disability, but because the funds were in a trust they were able to give her a monthly Income off the trust and not disturb the Social Security disability. The last we had a person who was just finishing the final stages of the divorce when his mom died and so again the spouse went to try to get 50% of that inheritance because the divorce, even though they were in the final stage, it wasn’t finalized, but again because the funds were in a trust They were able to protect it.
It’s not always whether or not it’s an easy estate or if it’s a complicated estate or if it’s blended families or you’re leaving out a child it really a lot of times comes down to protecting the creditors and predators because you never know what your children could be going through at the time you pass so for their protection that’s where a trust comes in.

Those are good examples of what can happen. I have seen similar situations occur. They ain't pretty. Another is an heir/devisee inherits, then faces bankruptcy for one reason or another, or loses a liability lawsuit due to an auto accident or such. There goes what he/she inherited. A well written trust can protect the inherited assets within the trust from financial losses due to such occurrences. It can also be wise to put a spendthrift provision in a trust if warranted.

[Altavia]

Been through this multiple times. Life is full of unknown unknowns, twists and turns...

A trust can mitigate Florida probate complications (word selection counts). And make things easier on your survivors helping insure your wishs are executed.

The cost isn't significant relative to a substantial estate.

[retiredguy123]

I respectfully disagree at the top of my head. I can tell you three different scenarios with our clients. I’m not a lawyer, but I deal with the senior market. We had one where the son was filing for divorce when the father passed away at that time, the ex-spouse wanted 50% of the father’s inheritance, she didn’t get it because the funds were in a trust. Another was a brother passed away and his inheritance was going to the sister who was on Social Security disability had it not been in trust that would’ve thrown her off of her disability, but because the funds were in a trust they were able to give her a monthly Income off the trust and not disturb the Social Security disability. The last we had a person who was just finishing the final stages of the divorce when his mom died and so again the spouse went to try to get 50% of that inheritance because the divorce, even though they were in the final stage, it wasn’t finalized, but again because the funds were in a trust They were able to protect it.
It’s not always whether or not it’s an easy estate or if it’s a complicated estate or if it’s blended families or you’re leaving out a child it really a lot of times comes down to protecting the creditors and predators because you never know what your children could be going through at the time you pass so for their protection that’s where a trust comes in.
You are explaining a situation where a trust is needed because the estate is complicated. But there are many situations where a trust is not needed, but the attorney wants to sell you a trust to make money. A trust is not needed in every case, but some attorneys will sell you a trust anyway. If you only have one heir, and simple assets, you do not need the hassle and cost of a trust. All I am saying is that you need to make an informed decision about when you need a trust and when you don't. It has nothing to do with the value of your assets. Don't blindly accept the advice of an attorney who is motivated to sell you a trust even if you don't need one. I have substantial assets, but I definitely do not need a trust, even though several attorneys have tried to sell one to me, just based on my assets.

[Rainger99]

Objective article on whether someone needs a trust.


When a Living Trust Might Not Be Needed (https://www.nolo.com/legal-encyclopedia/living-trust-need-unnecessary-30260.html)