Estate Planning

[anteater]

but you should still put your assets in trust, and DO NOT HAVE AN ATTORNEY as your trustee.

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

TrustUser,

You are crossing the line. All that you know about this person is that she is a widowed 86 year old that apparently lives in Virginia and has a net worth of roughly $6 million. That is hardly the basis for making statements about "the obvious solution."

Add to that more rants about "enduring probate." Do you know for a fact that the probate process in Virginia is particularly painful and/or expensive?

And what the bleep does this mean?

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.

You were better off if you had left it as:

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.

 

[TrustUser]

to answer your question - when a trust continues to exist, each beneficiary tends to pass it along to more than one beneficiary, so that as each generation progresses, there are more beneficiaries receiving benefits from the trust.

at some point, unless you are bill gates, it probably makes more sense to distribute those assets. that determination is usually based on how much each beneficiary is receiving.

 

[anteater]

I guess I made a mistake in grabbing the entire paragraph for the quote. Let me narrow it down:

What the bleep does this mean?

and those assets wont be subject to estate tax until they are distributed to individuals...

 

[TrustUser]

while the assets are in trust, the beneficial interest changes hands, as one beneficiary passes it along to his beneficiaries.

but it is not subject to federal estate tax.

once an asset is distributed to an individual, it will once again be subject to estate tax, when that individual passes.

sorry if my original comment was not more clear.

 

[anteater]

But that does nothing for the roughly $1M liability that Mom's estate will incur.

 

[TrustUser]

true.

if you reread my posts, one of the first things that i said is there is not much that can be done about federal taxes on mom's estate.

one of my main reasons for being here is to impart knowledge about trusts, and why they are so beneficial.

most people are not aware of such. there is no sense subjecting our assets to estate taxes any more than is necessary - just another big advantage to trusts.

another one is the ability to protect assets from most of our creditors. we cant really do this with our own assets, but we can do this with assets for our kids.

in this way, people will end up with at least some of their wealth well-protected, and capable of taking care of the necessities.

i would venture a guess that rockefeller has a "family trust". and maybe with a 1000 beneficiaries by now. but it is also worth a gazillion dollars, so will probably always stay in trust.

i dont think there is ever a time when a trust is not better than a will. it is just some of the times, it is way better, while others it may not make much difference.

with a bypass trust, one can take advantage of both tax exemptions, for example.

but in any case, i will try to refrain from telling someone that they should get a trust, and rather tell them what i think a trust will do for them.

 

[marylandwoman]

Making some progress here - my Mom is meeting next week with an Estate Planning Attorney who handled a family friend's/successful local businessman's very large estate. He has an impeccable rating and reputation within the legal community...but it is the personal referral we are going by.

She admits she shouldn't have waited so long after my Dad's death, but as TrustUser said, we can't cry over spilled milk, but hopefully we can stem the flow and start to refill the glass!! At least she has made the decision to hear another side - and from someone whose specialty is that very area...

Fingers crossed and Godspeed!

Thanks again to all who took the time to respond to my pleas for advice and guidance!

 

[TrustUser]

let us know what happens. it is generally a good idea to get information from multiple sources. and then try to verify what you think sounds like good info.

 

[marylandwoman]

Well, Trustuser, you did want to be kept posted on what happened..Now, remember my Mom asked me almost 2 months ago to help her get her estate in order becuz atty #1 had left her without an updated AMD (late husband was agent) without POA (late husband was that too) and was dragging his feet on setting up a revocable trust for all her assets to avoid probate.

So, I researched and set up mtg last Wed with very reputable estate atty - and 2 of the remaining 4 siblings showed up unexpectedly. They will probably end up being hcare agent and POa, respectively, which is fine by me. My Mom played dumb and my sister, who lives out of state and who is TOTALLY dependant on my Mom for $$ (has been all her life), who knows nothing about making or saving money, let alone estate planning, was a nervous wreck during the meeting. After it finished, the atty said he would prepare a draft for my Mom's review tomorrow. Atty and I left immediately following meeting, as we smelled a rat.

Yesterday, email came from atty # 2 saying atty #1 had contacted him and warned him off (legally) as Mom had met with atty #1 on Saturday! (while sis still in town) I was so embarrassed - I called to apologize and tell him I was as surprised as he was and would never be that unprofessional. He was cool and said that atty #1 said my mother was obviously "way off track, but he had gotten her back on track"...

It is amazing when ignorance and greed get in the way of common sense and planning...but I can only hope that my Mom did set up a revocable trust (even tho atty #1 was against it) and that she has done what is best for her.

What was interesting to hear from atty # 2 was that at this point, with my Mom having inherited the estate from my Dad, who didn't set up a bypass trust, there was no option to "minimize" estate taxes when she dies. I thought at least the stock certs could have gone into an FLP for transfer with a discount off value of 10-20 %-- that is what an accountant told us who does this quite freq in Fla.

The "best laid plans...." hmmm....

Time to go back to a simple life of just me, my hubby, our 2 cats and dog!! Much simpler than being involved with a very wealthy mother who is supporting 3 of her 50+ children.

Here endeth the lesson!

Life is still the best teacher there is!

 

[tranquility]

You don't have a business purpose for an FLP--which is why I asked the question earlier.

 

[TrustUser]

i think it was stated that there wasnt much that could be done, regarding FEDERAL estate tax. i dont know the rules on all the various states.

the reason why a bypass trust is helpful is that it allows the couple to take advantage of the exclusion amount for the spouse that dies first. otherwise, everything is lumped together for the surviving spouse, and only one exemption can be applied. but that is after the fact, at this point.

i wonder just what kind of clout that atty 1 has. it is my gut feeling that atty 1 does not have your mom's best interest at heart.

your mom had gotten off track, and atty 1 got her back on track ? my question is whose track did atty 1 get her back on ?

i see no reason why you could not use atty 2 to look over the "track" that atty 1 got her back on. could be that this track may get easily derailed in the future.

 

[marylandwoman]

Hello again -

Tks for your thoughts, Trustuser, however, NO CAN DO...as the only child of 5 who is not DIRECTLY (currently subsidized) or INDIRECTLY (major inheritance potential) tied to my Mother, I don't want to get involved with this mess.

As my sister basically controls my Mom's life from afar - med decisions, who gets what in will, clothing she wears, maid she hires...etc and she does not know the difference between an Attorney who specializes in estate planning(Estate Planner) and a Financial Planner, she has my Mom believing the new ATTY #2 was going to con them somehow and thus are paranoid of using any attorney besides ATTY #1, who just happened to be my late father's godson -- so he considers himself almost a "blood relative" and "in like Flynn".

I think my sister thought ATTY #2 was going to inveigle my Mom out of her money, and thus all the other kids out of a potentially large inheritance- and when I say dependent, 3 of my siblings who are between 50 and 60 have never worked, and my brother that lives with my Mom does have a job and will inherit the 6 figure home to live in as long as he likes.

So, you see, they all stand to benefit greatly and must "play the game" and placate my Mom or else their inheritance might be greatly reduced (as I imagine mine will be, just because I have chosen to live without "handouts" that come with a very big string attached!) It's all about CONTROL!!!

It is a humongous, dysfunctional mare's nest that no one in their right mind would want to get entangled with...the strange thing is - my Mom asked me face to face about 2 mos ago to help her get her affairs in order. When my sister got wind of it, she panicked and convinced my Mom otherwise.

I think this should be the last chapter in this sad saga....I hate to waste any more of anyone's time or the space here on such a hopeless cause.

Arrivederci all - and thank you for listening!

 

[anteater]

Jeepers. I'm surprised that you even tried.

Well, remember... Don't wait until you have a couple mil and in your eighties to think about estate planning.

 

[marylandwoman]

Amen, brother - Anteater...

Yet, as I am pretty darn sure I will be a miniscule beneficiary of my Mom's estate, and with inflation and higher taxes lurking in this country's financial future, my husband and I won't have to do much "estate planning"...but, we already have wills set up, along with POA and our Advanced Medical Directives.

God help us all in the years ahead under the growing Socialist regime...we will NEVER experience the wealth and lifestyle of our parents...quite the contrary...