Revocable Living Trust - What to include in it?

[RSKY]

About a year before my mother passed a local hospital hosted an "Elder Law" program. There is ONE law office in the state of Kentucky that specializes in the laws and affairs concerning the elderly. A young lawyer from that office held the seminar. I cannot detail everything the young lady spoke of during the meeting but it was enough different from what we had been told locally to make my sisters and I very concerned. We were about to make some serious mistakes. As it turned out we changed nothing from what was already set up and everything turned out well. BUT my sisters and I worked together and nobody tried to get more than their share. It's been five years and I cannot remember details and it mostly concerned Kentucky laws. So my advice is to seek out legal advice from an office that deals in laws concerning the elderly in your state.

RSKY

 

[Runner]

I am not sure if this is even possible, but can you have more than one trustee at a time? It seems like the idea of a "trust" is to authorize one person to handle the affairs of the trust, and, upon death of that person, the next named trustee takes over. But the problem is, what if the assets in the trust need to be liquidated, the trustee is still alive, but incapacitated to the point that someone else (power of attorney) needs to deal with the assets in the trust?

This happened with me. My Mother had a bunch of bonds that were in the name of her trust. I was the trustee upon her death, however, we needed to liquidate all of her assets, including the bonds while she was alive but not physically able to do it.

Fortunately, I had employed an elder attorney for this and many other issues that had arisen, and his solution was simply to write up a new trust with me as the trustee, then had Mom sign it. This allowed me to deal with the bonds. However, it would have been much easier if this could have been handled when the trust was initially set up.

Sorry if this is a stupid question, but I am ignorant about this particular topic.

Also, I strongly second the advice to find a good elder law attorney to help with these issues. There is no way I could have gone through the process without one.

 

[Sigarms]

If you inherit an IRA as a non-spouse, of age individual, there is a ten year draw down from the death of the last trust holder, with required minimum distributions, like other IRAs, but those RMDs and the ten year clock start at the death. Like any withdrawal from an IRA, you can decide when and how much, though for inherited IRAs, the penalties can be 25% of what should have been withdrawn.

After dealing with the credit unit that doesn't have a physical location near, me but where I had to talk to a different individual after every time I called, your comment is spot on per the 36K my father left me in his IRA.

End of the day, I just maxed out on the taxes per monthly withdrawal.

I would just like a bank where they know your name when you walk in locally....

 

[duffer]

I am not sure if this is even possible, but can you have more than one trustee at a time? It seems like the idea of a "trust" is to authorize one person to handle the affairs of the trust, and, upon death of that person, the next named trustee takes over. But the problem is, what if the assets in the trust need to be liquidated, the trustee is still alive, but incapacitated to the point that someone else (power of attorney) needs to deal with the assets in the trust?

This happened with me. My Mother had a bunch of bonds that were in the name of her trust. I was the trustee upon her death, however, we needed to liquidate all of her assets, including the bonds while she was alive but not physically able to do it.

Fortunately, I had employed an elder attorney for this and many other issues that had arisen, and his solution was simply to write up a new trust with me as the trustee, then had Mom sign it. This allowed me to deal with the bonds. However, it would have been much easier if this could have been handled when the trust was initially set up.

Sorry if this is a stupid question, but I am ignorant about this particular topic.

Also, I strongly second the advice to find a good elder law attorney to help with these issues. There is no way I could have gone through the process without one.

Yes you can have more than 1 trustee. My wife and I are "Co-trustees" on each other's trusts (we have 2, 1 for her, 1 for me). Many people don't need 2 trusts, some do.

Successor trustees take over when the original trustee(s) are gone, or incapable of managing the trust. Most of the time it's the kids. Sometimes it's a CPA, Atty, or bank. The trick is to have an ODD number of Successor Trustees. So if there is disagreement, there are no "ties" in the voting.

My attorney would have simply made a trust amendment to your Mom's trust, adding you as a Co-Trustee with all of the rights and privilege's of your Mom. Writing a new trust in it's entirely solely to add you smacks of he wanted more legal fees...IMO. But...the end result is it works for you.

 

[Runner]

Yes you can have more than 1 trustee. My wife and I are "Co-trustees" on each other's trusts (we have 2, 1 for her, 1 for me). Many people don't need 2 trusts, some do.

Successor trustees take over when the original trustee(s) are gone, or incapable of managing the trust. Most of the time it's the kids. Sometimes it's a CPA, Atty, or bank. The trick is to have an ODD number of Successor Trustees. So if there is disagreement, there are no "ties" in the voting.

My attorney would have simply made a trust amendment to your Mom's trust, adding you as a Co-Trustee with all of the rights and privilege's of your Mom. Writing a new trust in it's entirely solely to add you smacks of he wanted more legal fees...IMO. But...the end result is it works for you.

Good information. Thanks.

 

[dfkrug]

Some people make the Trust a beneficiary of the IRA/401k, which is questionable for tax reasons.

Not just questionable. Expensive.

My folks paid a lawyer to make a living trust for them back in the 80s. He made the Trust the beneficiary of their IRA, and I filed the 1041 for the estate as the successor trustee. When my mom died in 2003, the estate tax exemption was only $600K, so I paid a lot of taxes. The exemption is over $12M now.

In CA, you are best off using Nolo Press Trust-maker, which is vetted by CA-based lawyers. Easy and inexpensive. I used it for managing and closing out the Trust. Lawyers and CPAs do not necessarily do a better job.

My wife and I did not have a living trust because we do not have kids, plus some accts will not allow trust ownership. Since I live in one of the Community Property states, I went that route. I recently became a widower and found out that I need a court order to transfer spousal community property. I filed the papers myself, but it was a surprise and quite a hassle.

 

[lsgreg]

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.

Wells Fargo is a criminal enterprise.