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Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

716.0. "Living Trust Inquiry (anon)" by VMSDEV::HALLYB (Fish have no concept of fire) Tue Apr 19 1994 17:54

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Does anyone have direct experience of executing a Living Trust?
In scanning this notes file, most people were referred to attorneys
for advice on probate, trusts, wills,etc.  Of course, that's the 
obvious place to go--IF you 'trust' them.  My concern is that
they are recommending these living trust tools to avoid probate,
but it could possibly be just a way for them to make more money
in the short term.  Then, what happens when you actually
try to follow through with one?  Do you get hit with a bunch
more legal fees, etc, anyway?

So, I wasn't sure if they've been around long enough that there's some
experience with them, & they do work as 'marketed', or if we'd just
be biting off another set of headaches going this route.

My mother has been advised to use this vehicle, and I'm just trying
to research it a bit more. Her estate is smaller than the $600K
limit for federal estate taxes (if that changes your opinion/input).

Thanks
T.RTitleUserPersonal
Name
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716.1Stuff to go into the TrustHELIX::SPIELMANjerry dtn 297-4879Tue Apr 19 1994 22:4395
    >... experience EXECUTING a Living Trust ....
    
    If you mean, settling the estate, NO. But I am aware of some issues
    that might be of some help.
    
    My experience as a co-trustee on one of these (ie, not my estate) is
    this: 
    
    - attorney charged $500 to set it up. Document is about 15 pages long
      double spaced on legal size paper (for whatever that's worth).
    
    - the document need not list the assets in the trust. It can say, for
      example, Inventory, $10.00.  Then the owner can simple start moving
      assets into the name of the trust; for example a bank account, a
      brokerage account. The attorney doesn't have to update the initial
      document and need not know of this. The idea is that the language of
    the Trust makes clear how assets should be disposed of after the
    "settlor" (essentially the person whose stuff the Trust is about).
    
    [ Note: If any reader knows that an up-to-date inventory is important
       I'd like to hear about it. I'm assuming it shouldn't matter as long
       as it is crystal clear whether an asset is insided the trust or not]
    
    
    - types of topics to cover:
        .beneficiaries, including all cases of some predeceasing the settlor
        .reference to how assets are divided (can point to the Will)
        .how decisions are made if the settlor becomes impaired (physical,
         mental)   -- that is who is "in charge", 1, or more ...
        .what changes in the event one or more of the "in-charge" cannot or
         no longer want to take on that responsibility
        . standard statements about how the residual estate (after the
          principle dies) is administrated - for example:
           that bond doesn't have to be posted 
           that monies can be used to pay immediate expenses or legal fees,
           or whatever
    
           basically, clauses that arrange so that the courts cannot impose
           "overseers" who can charge the estate to do what the Trustees
           already can do themselves 
        
        
     SUggestion: Try to spend some time thinking ahead about two issues
                 when planning what to include:
                 a. what might happen from your perspective as a presumed
                   Trustee
                 b. what the settlor may want to protect or "prepare" for
                     from her/his point of view. 
                 These may not initially agree. 
    
    
    
                       For examaple, if you are married and a child of the
                       settlor, and you were to predecease both the settlor
                       and your spouse, what would the settlor want to
                       happen to your share of the assets and how would the
                       settlor want them administrated, vs. how you might
                       want same. This kind of stuff comes up in the text
                       or (should be handled in it). (Succession trustee
                       clauses)  
    
                 c. Don't try to be too specific on how things should be
                    done:  as there could later be irrelevant situations
                    that commit or tie up assets in ways you might not
                    want.  
    
    I know some of these ideas are vague. I only have my own experience to
    go on. 
    
    Finally, the document can be ammended.
      
    Hope this is of some help.
    
    re - at time of inheritance:
    
    My guess about the attorney's role in "handling" the "estate" if the
    settlor dies, is that you will need/want an attorney to do certain
    legaleze, and you may want to address how he charges for such work
    before selecting him to "write" the Trust in the first place. But I
    don't think there needs to be any big fees to actually settle the
    estate. I would hope that the size of the estate would be rather
    irrelevant -- rather the complexity of what the trust says is the
    issue. But I guess you would have to discuss this with the attorney
    first. They may actually charge a % of the estate to "finish it up".
    I don't have specific figures, but 1% looms up as something I've heard.
    You may be able to find an attorney who will claim he has a flat fee
    which would be less.   e.g. 1% of 600,000 is 6,000.   If the estate had
    only some bank accounts to be divided between 2 children, without a
    contest, that would be a lot of money to charge for 
    changing account names (plus whatever other fixed overheads).
    
    
    
    
    
716.2I'm pleased with our trust documentsSTOWOA::GIUNTAWed Apr 20 1994 16:5839
    All your legal fees on the living trust should be incurred when you set
    it up with no additional fees later on.  My husband and I just went
    though this exercise since we updated our estate planning and went with
    a revokable trust [we're too young now to do anything irrevokable to
    avoid estate taxes, so we'll settle for avoiding some estate taxes and
    probate at this point].  All our financial assets and real estate has
    gone over to the trust, so if one of us dies, there are no legal steps
    to take nor any fees to incur since the trust still exists, and there
    are still trustees to handle the trust assets.  There are no assets to
    go through probate as they are already in the trust.
    
    There are a lot of reasons to use the living trust including passing
    assets down to your heirs, avoiding probate, providing for the
    children, avoiding contesting of a will and all its legal fees, and
    keeping your financial business private [the contents of a will are
    public record, but not so with a trust].  And you can do all sorts of
    things in a trust. We have a spendthrift provision so that if the
    trustee thinks the kids, who are beneficiaries, will spend the money in
    an inappropriate manner, they don't have to give it to them right then
    and can wait literally years til they reach the age at which the trust
    gets dissolved.  And you get to pick those ages.
    
    I liked the idea of the trust since it makes settling the estate a bit
    easier, and we were able to provide for all sorts of situations like if
    we die and my son grows up, gets married,  has a child and gets hit by
    a train. We provided for his widow and child to get his portion to live
    a comfortable life instead of the money being locked up til the child
    reached the age of maturity.  
    
    If you want, I can even recommend our attorney who I thought had a very
    reasonable fee structure especially since I had talked to other
    attorneys who were much higher. The catch is that he sets up the trust
    paperwork and such, but it is up to me to actually transfer all the
    assets into the trust.  At this point, I've got about half of it done
    and am waiting on 1 more document to get the other half done to
    minimize trips to the bank for signature guarantees.  
    
    Regards,
    Cathy
716.3Trustee? Fees?TLE::JBISHOPWed Apr 20 1994 17:475
    Cathy--
    
    What kind of a trustee did you pick, and what were its fees?
    
    	-John Bishop
716.4we're our own trusteesSTOWOA::GIUNTAWed Apr 20 1994 18:3222
    We chose to have ourselves as co-trustees, and for back-ups I have my
    brother first and then his brother.  But since we are co-trustees,
    there would hopefully be one of us left should the other die, so the
    back-ups wouldn't be needed til we were both deceased.  
    
    I did not want a professional trustee or bank since they don't know me 
    and don't know what I want. I have regular conversations with both 
    brothers and have a written document to fill in the spaces for other 
    instructions, so I'm very comfortable with the way things are set up. 
    And it avoids the guardian of the children having to document every
    expense to get reimbursed [and it does happen like that -- I've got a
    friend in such a situation with how her kids' social security payments
    are spent] as well as allowing a lot more flexibility.
    
    If you want a professional trustee, you could go that route, but in my
    situation, that is the least desirable.  But then, when we just had a
    regular will with a trust set up for the children if they weren't
    majority age, my brother was designated as trustee with no restrictions
    so this is not a change for me.  To do this, though, you have to trust
    your back-up trustee implicitly.  In our case, we do.
    
    Cathy                                                 
716.5what about software packages?TARKIN::TINGAlbert TingFri Apr 29 1994 14:138
Don't know  if  this  deserves a new topic but I was wondering if anyone has
used  one of those living trust software packages.  I was thinking of buying
one,  the  only  one  I've  seen  on  the  Macintosh is Nolo's Living Trust.
There's  also  a WillMaker program that seems to be highly recommended.  Any
info would be appreciated.

Thanks,
Albert