Estate planning

[flatbutt]

Im thinking its time to put everything into an irrevocable trust. But it is expensive and confusing. Has anyone here done this? BTW my entire estate is under one million but i want to assure a painless maximized handoff to my kids

[Seahawk]

I have not but I am very interested in seeing what responses you get.

[Rot 911]

Find an attorney that does nothing but elder law and estate planning. I'm not sure what you consider "expensive" but you tend to get what you pay for. You can find someone to do a cut and paste will for $200 or you can spend $2000 and get a will, trust, etc., that is designed for your needs. And like I tell everyone, if you go to the initial meeting and don't get a good vibe off the attorney you are dealing with, move on to someone else.

[MBAtarga]

Wife and I paid about $1200 for wills and trusts (including POAs and "Living Wills") just a few years back. Top notch guy that knows his stuff.

[Scooter]

Originally Posted by flatbutt

Im thinking its time to put everything into an irrevocable trust. But it is expensive and confusing. Has anyone here done this? BTW my entire estate is under one million but i want to assure a painless maximized handoff to my kids

I think you mean "revocable trust". A revocable trust allows your estate to avoid probate. An irrevocable trust is when you are transferring assets and ownership rights to a trust without the possibility to transfer back to your name.

[wdfifteen]

I paid about $1200 for a pour over will and REVOCABLE trust. That included a health care POA. I feel better knowing I have more control of my stuff when I'm gone.

[Hugh R]

Paid like $1,200 for my trust as well.

[flatbutt]

As my health is not good and i may end up in long term care i thought an irrevocable trust would protect my assets better.

[wdfifteen]

Originally Posted by flatbutt

As my health is not good and i may end up in long term care i thought an irrevocable trust would protect my assets better.

It would probably take an elder law attorney to give you that answer to that. When I looked into something similar for a disabled friend of mine the attorney said she could set up a trust but her assets could not fund it. There are a lot of ramifications to this and the law is pretty complicated.

[dan88911]

I did the Revocable a while back.
Here some Pros & Cons
. Your estate avoids probate
. You distribute your assets as you wish (your instructions simply are in the trust agreement as well as in your will)
. Your decisions are not public.
. You make it harder for disgruntled heirs to complain. In most states, a disinherited heir cannot challenge a trust as easily as they can a will.
. You can direct how you want your assets to be managed during your lifetime should you
become incompetent. You can set the rules in the trust and appoint someone to manage your affairs for you.

It's good to have a Living Will, which you use to declare your preference for medical treatment in the event you become terminally ill.

As well as a Durable powers of attorney for health care, which allow another person to make medical decisions for you if you are unable to make them for yourself; and a Durable general powers of attorney, which allows another person (usually a spouse) to sign legal documents for you. The key word here is durable, for ordinary powers become void if you become incapacitated.
Be aware that you are granting the person you name in this document unlimited access and control of all your assets.

[Hugh R]

Parents were divorced.

Dad died with a will, probate took as much $ as I got and took months.

Mom died with a trust, her 2nd husband sat with us around the dining room table, wrote the three of us checks and told us to figure out how we wanted to divey up the furniture, jewelery, etc. that he didn't want to keep.

[Porsche-O-Phile]

Went through this recently - you want irrevocable. That puts enough legal "distance" between you and your assets where a challenger (nursing home or Medicaid) can't claim that you have actual control of those assets. If they can successfully make the case that you can / do control the assets, those assets become subject to seizure to pay for care. Nursing homes can and will wipe out your estate, then kick you onto Medicare at which point you're likely to be shoved into a substandard nursing home.

Even with an irrevocable trust you have controls (you can appoint, hire and fire trustees). You also control your will, beneficiaries, etc. definitely talk to a lawyer.

[Rinty]

I'm an attorney, and I would only have an attorney who specializes in this area, set up a trust.

[Scooter]

I am an estate planning attorney in Washington. I can't represent you, but I am willing to be a sounding board to help you ask the right questions for an attorney in your State. Shoot me a PM with your phone number and I will give you a call.

[flatbutt]

Originally Posted by Scooter

I am an estate planning attorney in Washington. I can't represent you, but I am willing to be a sounding board to help you ask the right questions for an attorney in your State. Shoot me a PM with your phone number and I will give you a call.

thanks Scooter. I am checking out state certified elder attorneys now, man they are expensive.

PM on the way.

[MRM]

Of course they are. You want someone with specialized knowledge above and beyond what regular lawyers know, that can save you hundreds of thousands on an estate worth something less than a million (one meeeelion dollars) and you think the expertise you retain isn't going to be expensive?

But seriously, if your estate is worth a million or less you're not going to be hit with any estate taxes so why worry about it? You don't need to do anything fancy to avoid taxes because you won't pay any (because you're dead) and your heirs won't pay any because you're under the threshold.

As for long term care coverage, there it gets a little tricky. There's a three year look back so regardless if whether you put the money in a trust, bank account or give it away, the state will claw it back if you go into a nursing home within three years if you doing whatever you do to protect your assets. So the basic idea is usually to put it in an irrevocable trust and buy long term care insurance for three years to sit out the look back period.

But again, with a million dollar estate I question why you need to do anything fancy. Hugh's experience probably has more to do with the personalities involved than whether the estate was in a trust or will.

However, you do need a healthcare power of attorney so someone can make decisions for you when you are too sick to make them on your own. That's a simple form that costs hardly anything extra over and above the cost of the will or trust.

Finally, not all wills need to be probated. Only real property or assets over a certain level need to be probated. So without a large estate the value of a trust is again diminished. Talk to someone who does only estate planning in your state and they'll set you straight.

For what it's worth, I have a simple will with a health care directive. It cost about five hundred bucks fifteen years ago. The lawyer I used wanted me to do a trust for something like $2,500. I figured my heirs could pay the extra in probate. Now I need to redo everything since we're older and life has progressed, and I'm doubly glad we didn't do a trust. I won't do one this time around either.

[Baz]

Thanks for the thread and all the posts so far.

Don't mean to sidetrack the discussion but I have a friend whose mother is not super stable mentally and his brother is taking care of her. They got their mom to put the home in the brother's name - and told me this way when she passes away it eliminates any taxes to pay in the inheritance.

The brother is taking care of her so my friend said he encouraged her to transfer the home to his name.

Does this make sense?

[Scooter]

Originally Posted by MRM

There's a three year look back...

I think you are talking about Medicaid look back. Medicaid look back period is five years from the date of application for Medicaid benefits, and any gifts or transfers made within that five year period are subject to penalty.

[LakeCleElum]

Paid about $2,400 for all this 2 yrs ago. Dealing with sizable assets, unworthy step kids, and a princess that thinks the "prenup" has Expired. Don't get me going

[wdfifteen]

Originally Posted by Porsche-O-Phile

Went through this recently - you want irrevocable. That puts enough legal "distance" between you and your assets where a challenger (nursing home or Medicaid) can't claim that you have actual control of those assets. If they can successfully make the case that you can / do control the assets, those assets become subject to seizure to pay for care. Nursing homes can and will wipe out your estate, then kick you onto Medicare at which point you're likely to be shoved into a substandard nursing home.

My parents were in the best nursing home in the state and their stays were paid by Medicaid. Hiding your assets so you can obtain public assistance is just another welfare scam.