another trust fund question
 

My recent heart issue got me to thinking about protecting my investments against the ravaging of a nursing home or outa control tax laws.

I already have an irrevocable trust set up for my home and a college fund for the G'kids.

So now I'm considering putting my stock funds into the trust just in case I hit the floor and end up non compos mentis.

Any input from youse guys?

Need more info...sounds like you have estate planned to a degree and want to lock down some assets (duh). Who is the Executor of your Will and Estate? I was for my Father and it made the transition a whole lot easier...get the person responsible for your wishes involved early and often.

The discussions are odd at first (death doesn't come with party favors) but the business of figuring it out was, at least for my Father, very cathartic.

He and I reached a nice level of agreement and he knew I would faithfully execute his wishes.

Earth, Wind and Fire:

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My son is my Executor on the existing trust and will be on this one. I was just wondering if anyone has gone this far with a trust. Like I said my home and money for the Gkids is in a trust, now I'm planning to put my stocks,bonds et al into one as well and hoping it doesn't cause me headaches down the road, the unknown unknown as it were.

That is great news, since I think I understand your relationship with your son is as solid as mine was with my Father.

It really makes a difference.

You two need to find a trusted estate planner and work though the options...I bet NJ has some rules and post death taxes that would focus the non compos mentis Flatbutt ASAP.

That said, my wife is her Mothers Legal Guardian...she runs everything on a pretty snappy (valuable) estate. We did this since her mother is truly non compos mentis and we needed to protect her and her assets. We did it right and involved her brother every step on the path.

Not an easy task, very emotional and requires a certain skill set. If your son is up to it, begin the research on Legal Guardians and how they can come into play given certain circumstances.

Honestly, FB, working through the options with my Father was an honor and there is a certain beauty in it.

Thanks Paul, I respect your opinion and your thinking mirrors my own.

Got lucky.

The next time I get to NJ, I am going to make sure we go have a meal. You'll pay:cool:

The beauty is FB 2.0 and FB 3.0 are in your life...that is the best asset any man has.

If you're asking for our opinions, I vote that you just avoid hitting the floor and ending up non compos mentis.

Well, there's a 2 year lookback if I recall.

you need to weigh the asset amount against the hassle...

pm me if you'd prefer not to air that publicly

Pay? Sure but if you're close enough I'll cook!

Thanks Greg but the look back is 7 years.:eek:

I have my home in a revocable trust along with the brokerage account.
IRAs have beneficiaries listed.
The revocable trust becomes irrevocable on my death my sons are Executors and beneficiaries.

I though it was 5 years.

If you were in GA, I've got a guy.

Yes, I believe any convenience to an irrevocable trust triggers a new look back period. I just went through this with my parents (my mom went a little nuts and decided she needed to sell her house and run right out and buy another different one, long story). Anyway it’s “mostly” protected now. Hoping nothing happens to her health-wise for another couple of years (it’s a five year look-back in her state).

Looks like its 5 years ...

WITH T-rump killing the estate tax a gift to the super rich
is the need for trusts still valid ?

my multi-millionaire buddy had a generation skipping trust set up
that allowed tax avoidance but meant he did not have full control of his wealth
and had to pay full rate income taxes on any funds transferred in to the USA
from his very extensive swiss holdings

This is called medicaid planning.

Some atty's won't do it as they have a moral objection to it.

Revocable trusts don't achieve the goal of medicaid planning.

Estates are a GOOD thing if you are passing appreciated assets to your heirs. Most all of us don't have enough of an estate to actually pay estate tax. Medicaid planning has you gifting the asset to a person and their basis is YOUR basis. Meaning you no longer get the step up.

And a revocable trust that becomes irrevocable on death does NOT achieve medicaid planning (aka free nursing care).

Yes, Medicaid planning is basically a way of keeping you from being hollowed out by nursing homes.

The problem is - if / when someone needs nursing home care, they WILL clean out everything you have. Houses, cash, retirement holdings, everything. They take it all and eventually (when the assets are all gone) say “oh you can’t afford to be here anymore” and kick you to a low-quality nursing home (usually paid for by Medicaid anyway).

The whole idea of Medicaid planning is to make the person destitute (i.e. they have no assets) so they go straight into a Medicaid-paid nursing home. The downside of course is that those facilities are often low quality and provide “minimum standard” type care. They’re not pretty places. I’ve been in several for various projects and research for relatives.

The alternative is to dump everything (all your assets) into a higher-quality (translation: expensive) nursing home and hope you die before the money runs out and you get kicked to the Medicaid type facility anyway. That strategy might make sense if you expect to decline quickly, if you have no heirs or you have very, VERY deep pockets. Otherwise Medicaid planning makes sense - although it has it’s own subset of problems (lower quality care, increased taxpayer burden, etc.)

There are no “winners”. It’s a question of what makes sense for you and your situation. In every case, SOMEONE is going to get screwed - either you, your heirs, the state / taxpayers, someone. It’s a complicated problem and when you start really getting into it, you realize just how screwed up our healthcare (particularly end-of-life healthcare) system is and why it’s probably going to collapse at some point (another discussion for another time...)

The “best case” is to line up your estate to go to your heirs as you wish and die quickly and suddenly, without a long, drawn-out period in your “golden years” in a home with little to no quality of life.

Sadly, many (most?) people now aren’t so lucky.

so your guys favor a socialistic end game plan
to avoid paying for terminal care and transfer the costs of your care to the government