Estate Planning

[marylandwoman]

What is the name of your state (only U.S. law)? Virginia

My mother - lives in Virginia and is 86 wishes to "gift" her home to 2 of her children. Is there any way she can do this, as well as minimizing estate tax on the value of the house ? Will an LLC work? A QPRT seems too tricky, as she would have to outlive it...

Also, in Virginia, can my mother form a Family Limtd Partnership (for the kids)and put her cash (treasuries) and stock into it to receive a discount on the estate tax that will be do at her death?

One final question, does a Revocable Trust in Virginia help to expedite settlement of the estate (ie avoid probate?)

Many thanks!

MarylandwomanWhat is the name of your state (only U.S. law)?

 

[curb1]

What are the values of these assets? It makes a difference for the kind of advice you will receive.

You said, "My mother - lives in Virginia and is 86 wishes to "gift" her home to 2 of her children.". What would be the desired outcome for doing this, rather than willing the home and getting the stepped up basis upon her passing?

 

[TrustUser]

living trusts avoid probate.

 

[marylandwoman]

Thanks - estate is @ 6 million (house 1 million - treasuries 3 million and stock 2 million) - that's why I thought FLP might be good instrument for everything except house to receive discount (20% or so) from Estate Tax.

re: house - as long as 2 named beneficiaries receive it, and it reduces Estate Tax on the value of house, it can be left in her will as you suggest.

Is Living Will same thing as Revocable Trust in VA ?

 

[anteater]

A living will is a form of advance health care directive. It is not the same as a living trust. And a living trust does nothing for estate taxes.

Without intending to bash (although you may interpret it that way), I can't believe that your Mom is 86 and worth $6M and you are on an internet message board looking for advice. Truthfully, these issues should have been addressed 20 or 30 years ago.

Find an experienced estate planner and get an appointment for Mom.

 

[tranquility]

FLP? Why choose that?

 

[anteater]

FLP? Why choose that?

The OP probably read something on the internet about "discounted estate taxes."

 

[tranquility]

Well, if it were on the *internet*....

 

[marylandwoman]

A bit of clarification here...my father died 3 yrs ago and my mother inherited everything - including all the headaches of a large estate. there wasn't that kind of money 20 or 30 years ago...she has just now decided she needs to update her will, AMD, POA and try to shelter her estate from a big tax bite.

I am only trying to get some other viewpoints as her current attorney(whom she also inherited from my Dad) is trying to be executor AND have POA and handle her estate planning - which makes me very uncomfortable

I have identified an excellent attorney (through trusted referrals) who specializes in the estate planning area, but as she is old and set in her ways, and hasn't done anything with her will for decades, it will be a big deal trying to get her to start over with someone new...

All I can do is try...

 

[TrustUser]

what should have been done is set up an a/b trust so that both spouses could have taken advantage of their personal estate tax exemption. that was not done, so everything is now in the name of the surviving spouse's name, with only one estate tax exemption. the federal govt is thankful for your generosity. they will never run out of ways to blow the taxpayer's money.

not much you can do about estate taxes, at this point.

but you should still put your assets in trust, and DO NOT HAVE AN ATTORNEY as your trustee. if there are enough assets governed by a will, you need to endure probate. assets in trust, and assets with beneficiaries on title, avoid probate. in both cases, there is a legal way to determine who gets what, without the court system intervening.

 

[TrustUser]

you have a sizable estate. as others have stated, talk to some competent professionals - more than one. and then check out the various pieces of advice that you get, so you can better formulate what you like best.

 

[anteater]

Uh... Trust... This is Mom's estate.

 

[TrustUser]

i understand. but mom is not writing in. and since the estate will eventually go to the kids, one of the kids may as well do things correctly. not much you can do about spilt milk, but you can sure do something about spilling more of it. and perhaps even start to fill the glass again.

gosh, and who said milk isnt healthy - LOL.

 

[marylandwoman]

Thanks to all of you for both your candor and advice.

I am going to propose to my Mom how important it is to get AT LEAST a second opinion (maybe also a 3rd) before she proceeds - just like one would when considering major surgery.

True, if Dad had done a bypass trust, we wouldn't be here now...but as he didn't, and I am the only child my Mom trusts and who will take the time to understand what CAN be done to preserve as much of the estate, I will stand by her.

Me

 

[TrustUser]

to me, the obvious solution is a trust with you as trustee.

one thing that you may not be told about is that you can keep the trust going after your mom passes.

with the proper clauses, those assets can be protected from most of the beneficiary's personal creditors.

with other proper clauses, the trust can be moved to any state - namely one that does not require the trust to be dissolved due to perpetuity.

and those assets wont be subject to estate tax until they are distributed to individuals. at some generation, the number of beneficiaries will increase to the point that it is better to distribute the assets as opposed to managing it for an ever growing number of beneficiaries.

trusts are my thing, so i typically only comment on threads about them.

i would place the real estate in a separate trust, though - especially if you plan to keep it after your mom passes.