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Hello Fools!

I'm trying to help my parents decide between setting up a living trust vs. a will.

My Mom has heard that living trusts are good, but my father has heard that they are only good if you have a lot of money. He also has heard that living trusts are expensive to set up, and that you have to sell all of your possessions to the living trust. So as an example, my father would no longer own the house, the living trust would.

Could anyone refer me to a web site that may discuss the differences or pros and cons, or give me advise based on their own experience?

Thank you!

Ed Ribar
ed_ribar@hotmail.com
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No. of Recommendations: 2
I don't know of any websites, but use the search engine at www.dogpile.com and I am sure your will find many web sites dealing with the topic. We are retired, 64 and have a will and a trust. We are not wealthy, but we were able to have all of this done for less than $1000. Trusts avoid probate and maintains your privacy, where anything done in a will goes throw probate which is public, cost alot in time and money. You don't sell anything to your trust, you change the title of the asset to your trust. If you are the trustee of the trust, you can do anything with that asset that you could do before. You can amend a living trust any time you want as long as your living. If your trust is not fund then it is worthless. A trust is a very effective estate planning tool. It sounds to me that you need the help of a professional. I would encourage your parents to find an attorney that specializes in Elder Care. They could also go and take advantage of Merrill Lynch's new program, called Ultimate Advantage. They have seminars where they introduce you to the ideas, free and they feed you. I just attended one last night. They offer alot of services at very reasonable price. I AM NOT CONNECTED TO MERRILL LYNCH. I am a leader of a study group that deals with Retirement Planning, which invovles Estate Planning. If you have any more questions, please contact me at; gstipps@iquest.net

glenn
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Greetings, Ed, and welcome. You wrote:

I'm trying to help my parents decide between setting up a living trust vs. a will.

My Mom has heard that living trusts are good, but my father has heard that they are only good if you have a lot of money. He also has heard that living trusts are expensive to set up, and that you have to sell all of your possessions to the living trust. So as an example, my father would no longer own the house, the living trust would.

Could anyone refer me to a web site that may discuss the differences or pros and cons, or give me advise based on their own experience?


In general, for most folks a living trust is a needless expense that is over-hyped and over-sold. They serve a purpose, but most often that's just to line the pockets of the preparer.

For the reasons I believe that, see my article "Are Revocable Living Trusts for You?" at http://www.fool.com/retirement/retireeport/2000/retireeport000508.htm.

Regards..Pixy
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efrfool: "I'm trying to help my parents decide between setting up a living trust vs. a will."

Even if they do a living trust, they will still need wills.

"My Mom has heard that living trusts are good, but my father has heard that they are only good if you have a lot of money. He also has heard that living trusts are expensive to set up, and that you have to sell all of your possessions to the living trust. So as an example, my father would no longer own the house, the living trust would."

Expense will vary; value is the real question.

"Could anyone refer me to a web site that may discuss the differences or pros and cons, or give me advise based on their own experience?"

Chris Riser (criser on these boards) has answered this question before, but I do not recall on which board; you could check out his old posts. You might also check his website:

www.mayer-riser.com

I also know that he has written an excellent soapbox report about estate planning and you might consider purchasing it as well - less than $10, IIRC.

Regards, JAFO
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I am a recent law school graduate. I have taken every tax and estate planning, and business law course offered. I am by no means an expert and would suggest that you seek legal advice from a competent attorney in this area. However, I might suggest that you look into a Qualified Personal Residence Trust for your parents home and a Family limited partnership or limited liability company for the rest of the the family assets.
The Family partnership or Family limited liability company will provide for what is termed an asset freeze. Meaning that for estate tax purposes, any appreciation of the assets will not be in your parent's estate. Moreover, your parents will still be able to maintain complete control of the the partnership or company and maintaining an income from any assets in either of the two vehicles. All assets can then be transferred to the children without a will--effectively avoiding probate and estates taxation. Of course there will be gift taxation on any transfer of present assets should that asset transfer exceed $20,000 annually. But remember that the tax will be at today's value of the asset and not the value 5, 10, 20 or more years hence. Moreover, you can transfer $200,000 in assets in ten years at the rate of $20,000 per year. It is strongly suggested that you seek legal help from someone who is well versed in these areas.
If I can help you further, please contacted me at raylic@hotmail.com.

Ray
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Setting up a living trust costs little more than a good Will initially but saves considerable time and money at time of death. If you have a legal package on your computer, you can pull up a lot of info there. I did a trust this summer...cost $650 in all, which included the trust itself, a "pour over Will" which would cover anything I forgot to trnsfer to the trust, a Durable Power of Atty. and a Health care POA (Living Will).

You don't "Sell" anything to the trust. Once it is established, you merely contact the source of all the investments you have (including a paid for home Deed) and change the ownership wording from John and Jane Doe to the John & Jane Doe Revocable Trust dated 1/1/01. You can use the same form letter and do the transferring yourself. Mutual funds and some stocks are quickly transferred; phone stocks require that you have your bank certify your signature on the request. My bank didn't make any charge for this service even tho I had about 8 transfers that needed it. In all, it took me about 4 mos. to completely transfer all my property to the trust. Since my new home is mortgaged, it isn't in the trust now. When I die, there is a completed Deed ready for my successor trustee to file, moving the home into the trust.

There's an excellent paperback book called "Understanding Living Trusts" by Vicki & Jim Schumacher...costs about $15 and well worth the price. It very simply gives you all the info. you need. And it gives all the advantages/disadvantages of a trust in various circumstances. Well worth buying.
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I am a "living Trust specialist" I am in thehomes of 12 to 15 people per week to help educate them on the best method of "estate transfer" in terms of maintaining CONTROL, minimizing the time required for the desired heirs to receive what they have coming and to minimize the expense (like the probate process) and to maintain privicy.

Your father probably doesn't want any one from his community to be able to go to the court house and see what he had and what he did with his STUFF.

Second, he is mis-informed on the "selling of his Stuff to the trust" people mereley transfer the ownership of the asset to the trust where your Mom and Dad are the BOSSES OF THE TRUST, called Trustees.

They get to use their stuff buy and sell stuff get the imcome from their stuff just like they dotoday. When something happens to one of them the remaining spouse has the use and control of the stuff to use during her or his lifetime. At the second death the stuff that is left goes to whom ever they designate and there is no time delay, expense, or probate process to deal with. This is a private family document and only those that are invited to look at it will know what it says etc.

You don't need a lot of money to have a trust and the cost (our firms cost is a one time fee of $1,995 that covers the attorney, the documents, and lifetime assistance in the administration of the trust.

Nationally the expense of Probate is between 5 and 15 percent($5,000 to $15,000) on an estate of $100,000. So yes the trust initially costs more than a will (the will and an Estate of $25,000 normally is the TICKET TO THE HORRIBLE PROCESS OF PROBATE)and the total cost can be several time the cost of the Trust.

any questions I am jwww@att.net
I would recomment you go tothe library or book store and get the book "The Living Trust" by Henry Abbs as this is quite a reliable reference.

good luck
jwww
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My parents set up a living trust. When Mom died the Fact of the trust was realized and appreciated.

First, the trust may own your property but you control the trust. You also get to stipulate what the trust can or cannot do. The trust does not eliminate the need for a will but is in addition to a will.A good lawyer can explain it better. The saving realized from not having to fork out probate fees was more than enough to pay for setting up the trust.

Again, agood lawyer can help you more than a Fool like me. The best advice is to investigate. Nothing ventured, nothing learned>
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A Living Trust could cost $2K or $3k. It also is usually accompanied by a "Carry Over Will" to move things into the Trust which were not prior to the individuals death under coverage of the Living Trust .Those items in the Living Trust do not escape taxes. They do however escape the probate(public chalenge) or the participation of lawyers and outsiders unless they are selected within the Trust as a Trustee. They allow for care of minors or the handicap. A down side is they are treated as a separate entity and often subject to higher taxes until all of their sheltered assets are distributed.

I have a uncle who only believed in Wills and died at the end of May 2000. He actually had registered at least 5 Wills that the court identified. All the people identified in all of the Wills or their decendennts have to be located and contacted. Also some of the people are contesting the final Will. The probate lawyer indicated that it may take until Dec 2001 to resolve. This will cost far more than the $3000.
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