Revocable Living Trust - What to include in it?

[California]

We just established a Revocable Living Trust and re-titled our home and ranch deeds to be owned by the Trust.

Likewise we opened a Fidelity account owned by the Trust, and moved our mutual funds into it. We understand that IRAs have to stay outside the Trust, so we'll keep the old Fidelity account to host them.

Now the question: Our trust attorney has guided us expertly through three trust or estate distributions. But she said move everything we use for current transactions - credit card, credit union account where we get cash from their ATM, pension and retirement automatic deposits, utility bills set on autopay - into new corresponding Fidelity sub-accounts under the Trust, and basically do everything there.

Then reading financial columnists online, I saw advice to use the Trust only for the large assets that will go to the heirs, and continue using existing accounts for everything else, as before.

In the state of California, for instance, you may hold up to $166,250 in assets, property, or accounts outside of a Trust and still avoid Probate. But if you have over $166,250 in your account, you should consider transferring it to your Trust so that your Beneficiary can receive their inheritance outside of Probate.

(We have 'pour-over' wills that say personal assets go to the Trust after the last Trustee has died.)

Our daily living expense transactions are well under that $166k limit.

Any advice? Move everything into Trust-held sub accounts, or continue unchanged? How have others handled this?

Anyone have links to expert advice that would broaden my understanding?

 

[ponytug]

Congratulations on getting things in order!

My folks received the advice to put as much as possible into the trust for two reasons;
1) it makes the assets and liabilities easy for your heirs to find, and
2) there are fewer loose ends for the heirs to clean up.

Given the issues that we had with some folks that shall remain unnamed, I would second that advice. The effort it takes to convince some hide bound, pea brained keeper of the keys can be incredible. Like a year plus after we started, with all of the paperwork in order to begin with, and the keeper of the keys kept repeatedly asking for information that they already had, or requests that were impossible, like dual notarization on a form of theirs that only had space for one notary, or saying that some other group had final say, but the keeper of the keys could neither disclose said group to us, nor talk them either. We finally hired an attorney after eighteen months.

Don't think for a moment that just because some group was easy to deal with when you were alive makes them easy to deal with later. Some small folks were great, the big folks were mostly great, and some were obstreperous just because.

All the best,

Peter

 

[Tpondel]

You paid the attorney for their advice. Why not follow it or at minimum, share what you read and get their take.

 

[newbury]

Don't think for a moment that just because some group was easy to deal with when you were alive makes them easy to deal with later.

Having been through many an estate settlement when my wife was an executor it seems some people take it as the start of a race to see who can get the biggest piece of the pie, by hook or crook.

 

[ponytug]

Having been through many an estate settlement when my wife was an executor it seems some people take it as the start of a race to see who can get the biggest piece of the pie, by hook or crook.

Unfortunately, so true.

Luckily in our case, it was the heirs collectively against a group obligated to pay upon death, who resisted for close to two years. It was just crazy obstreperous. I try not to attribute malice to things that can be explained by stupidity. It was hard to believe at first, but I slowly came to the opinion that in this case, it was by design and intent. They are a well known, established group, and it caused the heirs to change our own planning to avoid them. Silky on their part.

All the best,

Peter

 

[California]

Unfortunately, so true.

Luckily in our case, it was the heirs collectively against a group obligated to pay upon death, who resisted for close to two years. It was just crazy obstreperous.

Ah I see you've dealt with Wells Fargo!

The have a special 'prey on widows and orphans' branch in Oregon that is designated to handle deceased customers affairs - which is simply a black hole.

Twice I sent them the requested original death certificates and a request for a check to close Dad's checking account. Never acknowledged, and never answered email or phone, not even 'leave a recording' as I recall. The balance was a few hundred $ so I finally wrote a check payable to Dad's Trust, to make it clear I wasn't self-dealing, leaving less than a dollar in the account.

Then discarded all the low balance fee invoices that arrived over several months.

Similar bad dealing on 95yo Mom's, and FIL's accounts. I intercepted and prevented several new WF credit cards that Mom never ordered, after she asked me to investigate a $75 'protecting your credit' monthly fee that appeared on one of them. FIL had five new WF cards open that my wife shut down. He said he had never requested them and was baffled with all the monthly statements he received. That unrequested cards issue for elders made the papers a year later and WF paid some substantial fines.

 

[2manyrocks]

California may have its own peculiar trust/probate rules so on-line advice that isn't California specific could be badly mistaken.

Generally, the basic problem I see is that people establish a living trust, but fail to put some valuable asset in it which means the heirs end up in probate anyway to deal with that asset.

The other problem is banks have their own rules about accounts and may open an account in the name of the revocable trust if you go to the bank in person and request the change. But if you try changing the account any other way with a POA or anything short of a court order, banks will generally resist doing it.

 

[California]

My folks received the advice to put as much as possible into the trust for two reasons;
1) it makes the assets and liabilities easy for your heirs to find, and
2) there are fewer loose ends for the heirs to clean up.

Agree! In Dad's last years we took a 50 year mess of original stock certificates, dividend reinvestment statements, etc etc into a Fidelity office and they sorted it all out for us. This made administering his estate as Successor Trustee far simpler. There were a couple of issues but not the mess I would have had trying to cash out all those original stock certificates individually with none related to a broker. (Dad was really Old School, he came of age in the Depression, didn't trust brokers).


I think you're right, to get all the everyday household stuff into the Trust. It won't make a difference for us but it will for our daughter who will eventually have to wind down everything.

 

[Sigarms]

Every banking / savings account, 401K along with every insurance policy along with all assets have been placed into our Revokable Living Trust.

 

[MoKelly]

Every banking / savings account, 401K along with every insurance policy along with all assets have been placed into our Revokable Living Trust.

I’m surprised you put 401k assets in a Trust.

If you retitled the 401k from your name to the Trust name there could be tax issues. I’ve always been told 401k assets need to be separate - outside the Trust.