Revocable Trust


T

twendzinski

My father has established a revocable trust in his name. Is there an
advantage to transferring ownership of his assets to the trust over
leaving the him as the owner and naming the trust as the beneficiary?
The latter seems to be less work.

Thanks.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
Ad

Advertisements

G

Gil Faver

My father has established a revocable trust in his name. Is there an
advantage to transferring ownership of his assets to the trust over
leaving the him as the owner and naming the trust as the beneficiary?
The latter seems to be less work.
skipping the revocable trust all together is even less work. What is the
purpose of the revocable living trust? How can that purpose be served if
the assets are not transferred into it now?

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
B

BreadWithSpam

My father has established a revocable trust in his name. Is there an
advantage to transferring ownership of his assets to the trust over
leaving the him as the owner and naming the trust as the beneficiary?
The latter seems to be less work.
Mainly, avoiding probate. Advantages in that are *not*
tax-related, but rather simplicity and privacy related.

It's especially helpful for title to a piece of real
property which is not in the same state (saves executor
from having to do probate in a second state), and for
immediate access to and use of property (investments,
cash).

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
K

kastnna

skipping the revocable trust all together is even less work.  What is the
purpose of the revocable living trust?  How can that purpose be served if
the assets are not transferred into it now?
Most revocable living trusts do not include ownership transfers. The
goal is to avoid probate and dictate asset use after death, not avoid
estate taxes.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
D

Dave Dodson

My father has established a revocable trust in his name.  Is there an
advantage to transferring ownership of his assets to the trust over
leaving the him as the owner and naming the trust as the beneficiary?
The latter seems to be less work.
There is no reason to have a revocable trust if he doesn't transfer
his assets to it. He might as well have written a will that
establishes a testamentary trust.

The advantage of transfering the assets to the trust are several. The
most important is that it is easy to change the trustee if he should
become unable to manage his affairs. This happened to my mother, who
has dementia. She had a trust containing all of her assets, and was
able simply to resign as trustee to have the successor trustee take
over the management of her affairs when she was not able to manage her
business herself. Without a trust, my brother and I would have had to
take her to court and have her declared incompetent, which would have
humiliated her. Furthermore, the court might have ordered either a
court appointed conservator or extensive reporting to the court of the
management of her affairs. Anyway, the trustee was able to sell her
house and car after she moved into an assisted living facility.

Dave

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
P

PeterL

My father has established a revocable trust in his name.  Is there an
advantage to transferring ownership of his assets to the trust over
leaving the him as the owner and naming the trust as the beneficiary?
The latter seems to be less work.

Thanks.

Isn't part of the process of establishing a revocable trust the
transfer of assets into that trust? When I had mine done the lawyer
who did it also helped me transfer my assets into the trust. It's
part of the whole package of service.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
Ad

Advertisements

D

Don

Isn't part of the process of establishing a revocable trust the
transfer of assets into that trust? When I had mine done the lawyer
who did it also helped me transfer my assets into the trust. It's
part of the whole package of service.
I believe one of the problems is that people forget to transfer
something into the trust or some years later acquire a new asset and
forget to put it in the trust. Then it turns out probate is necessary
after all.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
M

Mark Bole

Don said:
I believe one of the problems is that people forget to transfer
something into the trust or some years later acquire a new asset and
forget to put it in the trust. Then it turns out probate is necessary
after all.
One way to look at it is, only assets that one would need to sell need
to be in a living trust, for example real estate, or stocks not in a
retirement account. Cash and retirement accounts (IRAs, annuities) can
have beneficiary designations which avoid probate, instead of being in a
trust.

I once thought it made sense to have cars titled in the name of the
trust but have since dropped that idea (although I might think
differently if I had a $50K car).

There is also a thing called a "pour over will" which puts miscellaneous
assets into a trust upon death, not sure how this differs from a
testamentary trust. A lawyer once told me that no more than $60K of
assets should be outside of the trust in order for it to be effective,
not sure if that number still makes sense.

Obviously state laws make a difference.

-Mark Bole

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
D

Dave Dodson

I believe one of the problems is that people forget to transfer
something into the trust or some years later acquire a new asset and
forget to put it in the trust. Then it turns out probate is necessary
after all.
I suppose that happens. For just an eventuality, my trust package
includes a "pour over" will, which directs that all non-trust property
be put into the trust. Probate would be necessary, but only for the
non-trust property. The rest of my estate would not be tied up by the
probate court while that property was probated.

Dave

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
K

kastnna

I believe one of the problems is that people forget to transfer
something into the trust or some years later acquire a new asset and
forget to put it in the trust. Then it turns out probate is necessary
after all.
Pour over wills are used to catch anything that was forgotten and/or
obtained after the trust was drafted.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
D

Don

Pour over wills are used to catch anything that was forgotten and/or
obtained after the trust was drafted.
For someone with only one or maybe two heirs, a simple solution is to
have everything held jointly (JTWROS). My wife and I hold every last
account jointly, so the survivor will have immediate access to
everything. No probate, no trust.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
Ad

Advertisements

M

Mark Bole

Don said:
For someone with only one or maybe two heirs, a simple solution is to
have everything held jointly (JTWROS). My wife and I hold every last
account jointly, so the survivor will have immediate access to
everything. No probate, no trust.
A little too simplistic -- what if you both die at the same time? (auto
accident, for example).

In the case of spouses, often the assets belong to both anyway, either
legally or ethically, so JTWROS makes sense. But don't depend on JTWROS
for children or other descendants, if there is more than one and you
want the money split according to your wishes. It will never work
out... unless your kids are space aliens and therefore exempt from the
normal inter-sibling issues that inevitably arise in these situations.

As previously mentioned, living trusts can also serve when the trustor
is not dead but merely incapacitated.

-Mark Bole

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
K

kastnna

In addition to Mark's excellent points, properly structured Trust
ownership provides asset safety after death.

A JTWROS won't protect your heirs from greedy ex-spouses during nasty
divorces. Nor will it help shield assets from a successful lawsuit.

The most common concern I encounter with JTWROS situations is as
follows: Husband dies and leaves everything to the wife. Wife
remarries. Wife dies and either 1) she leaves everything to YOUR heirs
(as originally intended); 2) she leaves everything to new husband; or
3) some combination of 1 and 2. If event 2 or 3 happens, strangers
will inherit some or all of your estate. Most people don't like that
thought.

Trusts aren't for everyone. But if you're going to leave behind a
sizable estate, it's penny wise and pound foolish not to take the
precautions.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
D

Don

A little too simplistic -- what if you both die at the same time?
(auto accident, for example).

In the case of spouses, often the assets belong to both anyway, either
legally or ethically, so JTWROS makes sense. But don't depend on
JTWROS for children or other descendants, if there is more than one and
you want the money split according to your wishes. It will never work
out... unless your kids are space aliens and therefore exempt from the
normal inter-sibling issues that inevitably arise in these situations.
Agreed. If there are children or many other heirs it would never work.
In our case, there are no kids, and neither of us wants assets to go to
anyone not approved by the other. Our wills are specific as to who
gets it if we die at the same time.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 
Ad

Advertisements

P

PeterL

One way to look at it is, only assets that one would need to sell need
to be in a living trust, for example real estate, or stocks not in a
retirement account.  Cash and retirement accounts (IRAs, annuities) can
have beneficiary designations which avoid probate, instead of being in a
trust.
IRA accts cannot be in a trust because they must be owned by an
individual, cannot be owned by a trust.

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top