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We set-up a trust a while back. The only thing in it right now is the house. I'm thinking I should probably also put our brokerage accounts into it (avoid probate, etc). However, those accounts generate income and gains from time to time. Would we need to file separate tax returns for the trust in that event? Because the ownership becomes the name of the trust rather than my name (beyond the fact that the trust name includes my name).

1poorguy
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We set-up a trust a while back. The only thing in it right now is the house. I'm thinking I should probably also put our brokerage accounts into it (avoid probate, etc).

To avoid probate, taxable brokerage accounts and bank accounts can generally be set up as TOD (Transfer on Death) accounts. 401(k) and IRA accounts should have named beneficiaries that the accounts will pass to outside of probate. Unless there is another reason in the 'etc.' there shouldn't be any reason to put these accounts into the trust if you have them set up properly.

AJ
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We set-up a trust a while back. The only thing in it right now is the house. I'm thinking I should probably also put our brokerage accounts into it (avoid probate, etc). However, those accounts generate income and gains from time to time. Would we need to file separate tax returns for the trust in that event? Because the ownership becomes the name of the trust rather than my name (beyond the fact that the trust name includes my name).
==============================
This is a question for the lawyer you worked with when you set up the trust. He/she knows what your overall goals and plans were all about.

As to whether your trust holding the investment assets would require a separate tax return to be filed depends on all the provisions of the trust, as to whether it is a "grantor trust". If it is a revocable trust, then it is, for example. If so, then you must (not an option) report all the trust income on your personal return. You can keep the 1099s being filed with your personal SSN and skip filing a 1041 for the trust.

But this is something to discuss with your lawyer.

Bill
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Unless there is another reason in the 'etc.' there shouldn't be any reason to put these accounts into the trust if you have them set up properly.

AJ

A major reason for a revocable living trust is to avoid a conservatorship in case of disability. All accounts except IRAs/401Ks should be in a revocable trust.
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A major reason for a revocable living trust is to avoid a conservatorship in case of disability.

Which is why I said Unless there is another reason in the 'etc.' It's hard to understand what someone means by the etc. when they say "to avoid probate, etc."

All accounts except IRAs/401Ks should be in a revocable trust.

That's a pretty major leap. It depends on everyone's individual circumstances and goals. It could be, for instance, that because of circumstances, an irrevocable trust is needed. Or it could be that a trust isn't really needed at all, if they live in a state where the probate process can be waived for the amount of assets that they have.

AJ
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Yes, the retirement accounts specify beneficiaries (primary and secondary). Though I did read recently that it's a good idea to make the trust the beneficiary (we haven't done that).

It is a revocable trust. So based on Bill's comments, all gains/income would be reported on our personal returns. Which is fine (that's what I would prefer rather than having to keep two sets of books). Our brokerage is NOT a retirement account. It is a taxable account. Hence my question.

I will look into the TOD option. The account was fairly old, but was recently "acquired" by another entity, so I don't know its status now. The beneficiaries should have transferred through the acquisition, I would think. TOD is preferable to putting it in the trust?

1poorguy
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Sorry for the confusion. I used "etc" to cover things I may not be thinking about. The trust first assures assets are used for us (1poorlady and me), and then it all goes to and is under the control of 1poorkid (not a minor). There may be various legal details it bypasses including probate, but that is what it accomplishes and why it was created.

As I don't do this for a living I relied on the people that drew it up, and they explained (section by section) how it made sure 1poorkid would not have any issues getting control of assets when the time came.
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AJ

Thank you for this.

taxable brokerage accounts and bank accounts can generally be set up as TOD (Transfer on Death) accounts

I have been considering what to do with such accounts.
I have my beneficiary set up on retirement accounts but didn't realize that other accounts can be TOD.
I will have to look into that.

nag
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Though I did read recently that it's a good idea to make the trust the beneficiary (we haven't done that).

Can you elaborate on why they said it's a good idea for the trust to be the beneficiary for a retirement account?

To me, it seems like a really bad idea in most cases. If a trust, rather than a living person, inherits a retirement account, the retirement account generally must be disbursed more quickly than otherwise would have been required - possibly within 5 years. In effect, the beneficiaries of the trust end up paying taxes sooner than they otherwise would have been required to.

There are some reasons to make a trust the beneficiary of a retirement account, but they generally have to do with avoiding estate taxes. However, since the Federal estate tax is $0 until your estate is at least $11.4MM, most people don't need to anything to 'avoid estate taxes'. (And if you do have a large enough estate that you want to avoid estate taxes, you should probably be asking your questions someplace other than TMF, like your estate planning attorney.)

TOD is preferable to putting it in the trust?

It depends on your goals and objectives. Why did you start the trust in the first place?

AJ
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Sorry for the confusion. I used "etc" to cover things I may not be thinking about. The trust first assures assets are used for us (1poorlady and me), and then it all goes to and is under the control of 1poorkid (not a minor). There may be various legal details it bypasses including probate, but that is what it accomplishes and why it was created.

As I don't do this for a living I relied on the people that drew it up, and they explained (section by section) how it made sure 1poorkid would not have any issues getting control of assets when the time came.


It sounds like having taxable brokerage accounts be joint between you and 1poorlady, with a TOD to 1poorkid after both of you die would accomplish what you are trying to do.

But as already suggested, you might want to ask the people who drew up the trust in the first place.

AJ
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To avoid probate, taxable brokerage accounts and bank accounts can generally be set up as TOD (Transfer on Death) accounts. 401(k) and IRA accounts should have named beneficiaries that the accounts will pass to outside of probate. Unless there is another reason in the 'etc.' there shouldn't be any reason to put these accounts into the trust if you have them set up properly.

I seldom disagree with you, but I will on this one. Using TOD to avoid probate smacks of DIY estate planning and can be fraught with problems. If there are multiple heirs, it can be challenging to ensure they each get equal shares. If all the accounts are TOD, then there is no money in the estate for final expenses. If there are other assets in the estate that are not TOD and are intended to be passed to the heirs such as real estate, those assets would need to be sold to pay the estate expenses potentially leaving an heir with less than WSS intended.

A trust may or may not be needed here, but using TOD aspartame’s is DIY estate planning may also not be the answer and could have sone awful unintended consequences, something with which I am all too familiar.
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It could be, for instance, that because of circumstances, an irrevocable trust is needed. Or it could be that a trust isn't really needed at all, if they live in a state where the probate process can be waived for the amount of assets that they have.

AJ


I can agree that there are situations where an irrevocable trust is needed. Death isn't the worst situation. Probate can be expensive and is annoying but it isn't tragic. I am dealing with probate for my sister's estate.

My MIL had dementia and was unable to handle her affairs for many years before her death. Without a trust, it would have been a mess. Conservatorship is not trivial and makes probate look cheap and easy.

My argument remains that TOD only deals with death. It doesn't help when the owner is no longer competent to manage their affairs.
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Would titling an account as TOD still allow for step up in basis after death if a kid inherits it? An article on TOD just came out today as well: https://finance.yahoo.com/news/transfer-death-tod-accounts-e..., but this part made me ask the above: TOD accounts are also subject to inheritance tax and capital gains tax, ... We are looking to avoid probate as it is possible neither kid will be in-state, causing them additional hoops for probate, but would love a way to do that without setting up a trust.

IP
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We are looking to avoid probate as it is possible neither kid will be in-state, causing them additional hoops for probate, but would love a way to do that without setting up a trust.

IP


What is your thinking about avoiding a trust?

TOD should not change the stepped up basis. There are too many ways to title accounts that make any global statement impossible.

DIY estate planning can result in a large mess with no way to undo the problems. Even if you don't have an attorney do a trust, it is worth consulting a professional who knows your state's laws.
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If you're going to set up a revocable living trust, the usual instructions you will get from the attorney is to put all of your assets in the trust. House, brokerage accounts, checking and savings accounts - everything. (Well, everything except IRA and 401k accounts.) The attorney should also prepare new wills that work with the trust. Usually, these are called "pourover" wills, which leave anything that is somehow not in the trust to the trust. Anything significant that is not in the trust will still trigger probate in many states. So with the proper trust in place, why wouldn't you put your financial accounts in the trust name?

But that's all estate work, not taxes.

As to your tax question, I agree with Bill (generally, that's a good thing to do). If it is a grantor trust (and most trusts set up to avoid probate are grantor trusts), the trust is disregarded and you report everything on your personal tax return. At least you do until the first spouse passes. Things may or may not change at that point.

Now for the rant.

I have a personal aversion to TOD accounts. They sound great, but usually reek of DIY estate planning. They sound easy until the TOD is exercised. Say you have a TOD account and name your three children as the beneficiaries. What happens when you die? The account will need to be split into separate accounts for each child. That's how TOD works. So how do you split 100 shares equally between 3 children? If you're not a round lot buyer, how do you split 557 shares equally between 2 children? What if one child wants to liquidate everything and get the cash? Sorry - the account has to be split first, then they can liquidate. Only one child? They still need a new account. The Transfer part of TOD is a transfer of the assets in the account, not a transfer of the account itself.

Or what happens with a TOD account if your health declines and you can no longer manage your own affairs? Now you've got to deal with a POA. But are you competent to execute a POA? Maybe not. If not, someone will have to go to court to get you declared incompetent before they can act on your behalf. In the mean time, how are your bills going to be paid? A durable POA helps, but isn't a cure-all and needs to be signed before you become incompetent. And you better get that POA (durable or not) from each financial organization you deal with because they may not honor the one your attorney writes without a bunch of legal haggling.

This is all much easier with a trust. The trust can (and should) say how a successor trustee takes over. Death is the easy case. The initial trustee (typically you and your spouse) can simply resign and let the successor take over. The trust can (and should) say how to determine that you are incompetent so the successor can take over. That could be the opinion of a doctor or two, or perhaps the majority of beneficiaries, or whatever mechanism you choose. Once the triggers happen, the successor steps in and takes over. The trust continues to exist, so no frozen accounts, no need to immediately split up the account and set up new accounts.

In short, put the brokerage account into the trust unless your attorney is advising against that for some logical reason. (State laws usually matter more than federal laws in these cases, so that's the expertise you need from your attorney.)

--Peter
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I have two comments:

#1. Read Peter's Comment carefully again - http://tinyurl.com/yxjwt5em

#2. We have what you likely want - A revokable trust which holds all our assets except IRAs, cars, pocket change and household contents.

We got a full set of documents so they work together. One item I have not seen other comments about is "An Assignment of Personal Property" which upon death transfers ownership of personal property not held by the Trust into the Trust upon death. Additionally we have a Pour Over Last Will and Testament, General Power of Attorney and Advanced Directive for Healthcare (aka Healthcare POA).

Some couples have two Trusts. We opted for a Joint Trust. Among other points we liked, this allows any Trustee to remove control of financial matters from a person for reason of diminished capacity without going through a months long, public, court process. Essentially a document is filed saying X is believed not capable. Independent physicians examine X and decide. X can appeal through another set of physicians. In the event the diminishment is temporary, a similar process can restore financial authority.

We decided we did not want to go through the process of adding and removing cars from the Trust every time we changed cars. Also we thought it likely the cars would be sold prior to death unless death were sudden.

Just like medicine has specialists for eyes and spinal surgery, there are legal specialists. Having dealt with legal generalists and specialists, I vote for getting your "Terminal Documents" prepared by an Elder Law expert. Lots of attorneys hang out signs saying this or that expertise. Look for a Certified Elder Law Attorney (CELA). https://nelf.org
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The trust can (and should) say how to determine that you are incompetent so the successor can take over. That could be the opinion of a doctor or two, or perhaps the majority of beneficiaries, or whatever mechanism you choose.

As Dad went further and further into Alzheimer's and we had to rescue him out of one financial venture after another, (which he requested in lucid moments of buyer's remorse,) we tried to get him declared incompetent by doctors. Extraordinarily difficult to do. He knew what year it was and who was the POTUS and that was that. Mom was easy enough to get declared after she was compromised by stroke, and even though we were able to get custody of Mom and Dad was denied, we could not get him to be declared incompetent. Very high bar. He wasted hundreds of thousands of dollars in his manic phases, which could be prolonged. Fortunately they did not run out of money, but it was getting close.

Only one child? They still need a new account. The Transfer part of TOD is a transfer of the assets in the account, not a transfer of the account itself.

We are considering a TOD with enough money in it to finish paying for Youngest's college. Don't want schooling interrupted by our (accidental) deaths and probate. The above implies this could be more difficult than we were led to believe.

I have a personal aversion to TOD accounts. They sound great, but usually reek of DIY estate planning.

As for trusts, the inlaws paid a considerable sum for an insanely complicated trust that was drawn up by a lawyer. So complicated that it is tough to find someone willing to administer the trust. The hours and $$ DH and SIL have put into this have been significant. I am not willing to do that to our kids. I have a personal aversion to trusts, but a desire to make things easier for our kids.

IP
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We got a full set of documents so they work together. One item I have not seen other comments about is "An Assignment of Personal Property" which upon death transfers ownership of personal property not held by the Trust into the Trust upon death. Additionally we have a Pour Over Last Will and Testament, General Power of Attorney and Advanced Directive for Healthcare (aka Healthcare POA).

It is a good statement to include but doesn't avoid probate. Assets are distributed based on the trust but first must be probated. There is (at least in California) a non-free (estimate of $7K-8K) option to have the court reassign assets to the trust. I don't remember the exact code.

We decided we did not want to go through the process of adding and removing cars from the Trust every time we changed cars. Also we thought it likely the cars would be sold prior to death unless death were sudden.

We don't put cars in our trust. Unless you have an expensive car it isn't worth the hassle. Our lawyer also told us not to bother about cars and that California DMV has problems with titling cars to trusts.
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As for trusts, the inlaws paid a considerable sum for an insanely complicated trust that was drawn up by a lawyer. So complicated that it is tough to find someone willing to administer the trust. The hours and $$ DH and SIL have put into this have been significant. I am not willing to do that to our kids. I have a personal aversion to trusts, but a desire to make things easier for our kids.

IP


A revocable family trust should not be complicated or difficult to administer. The only real complication in my MIL trust is the establishment of a special needs trust for my BIL. If it wasn't for the to do that a sister-in-law caused the costs of administering the trust would be minor. She forced a several hour unnecessary meeting with the family lawyer.

Understanding the history makes your aversion to a trust understandable but still not your best choice. Setting an account aside outside of a trust for your son's education is understandable.

My MILs trust allowed my husband to handle her affairs through her extended dementia and sell her house after her death without a conservatorship or probate. The sale of her house was much easier than selling my sister's house in probate. Done properly a trust will make things easier for your kids.

One warning is if charities are included in your trust be very careful about how they are included. If a charity or worse multiple charities is/are to receive any proceeds from real estate, it can get very messy. The charities have to approve all aspects of the sale and are required to sign off in escrow.
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Using TOD to avoid probate smacks of DIY estate planning and can be fraught with problems.

Well, the entire premise of asking on TMF whether assets that weren't put into the trust in the first place should now be put into the trust seems to be DIY estate planning, at least to me. So, I guess the question I would have is - why weren't those assets put into the trust when it was initiated, and what is different now?

I understand putting assets into a trust if the state has onerous, lengthy and expensive probate proceedings, like CA - where vkg and ptheland are located. But not all states are like that. I have dealt with an estate that included multiple pieces of real estate in addition to taxable and retirement accounts with no named beneficiaries, no will and no trust (kind of the worst case scenario posited here). We just had to get the personal representative appointed, disburse the estate and ensure that tax returns were filed, and taxes were paid by the estate, or appropriately passed on to the beneficiaries.

And as inparadise pointed out, putting assets into a trust to protect them from the owner becoming incapacitated doesn't always work, and can get expensive for those trying to protect the owner from their incapacity.

AJ
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Done properly a trust will make things easier for your kids.

Yeah, "done properly" is always the important caveat. We've met with two different lawyers who had fees ranging from $1500-8000, both insisting their approach was right. How is a non-lawyer to know which one does it right? Both had glowing reviews and specialized in the field, but it's tough to get recs posthumously, since one won't know how their estate planning worked til the customer dies.

IP
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Interesting discussion. Thanks to all.

Our trust was set-up with wills and powers of attorney, and provisions for diminished capacity, and all that. Everything works together.

Why didn't we put our brokerage accounts in the trust? Laziness. And thinking "beneficiary" ought to cover it with one kid. It was suggested at the time that we might want to do that, and I even have the forms on my desk. Coming across those forms again got me thinking "I should probably do this, shouldn't I." Which led to the question posted here.

Since we can deal with the taxes simply (rather than keeping separate books), there seems to be no down-side to submitting those forms and folding them into the trust.

Thanks again for all the conversation. It's good to get differing viewpoints.

1poorguy
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We've met with two different lawyers who had fees ranging from $1500-8000, both insisting their approach was right. How is a non-lawyer to know which one does it right?

Not easy. References from friends that have had to handle trusts are useful.

Review online examples of trust. Unless your situation has complications such as including a Special Needs Trust, the trust should be understandable without undo complexity. Both of their approaches may work. $8,000 sounds high.

Fortunately, my MIL willingly resigned as trustee. We didn't go through her spending recklessly. We made certain she had sufficient funds in her checking account to pay her bills. Utilities were put on autopay. She never used the internet and by the time she resigned she was barely able to leave her house alone.

We have a family lawyer who has handled multiple estates for us. Estates have been both trusts and probate. He wrote our trust and wills. Overall, our trust isn't complicated. My SIL dislikes him and constantly needles me about her perceived problems with him, but she is also the one who expects her siblings to "worship" their parents trust.
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We've met with two different lawyers who had fees ranging from $1500-8000, both insisting their approach was right.

Back in 1994 when we had our trusts drafted (they have since been updated a couple of times), we had a similar range of fees. The biggest reason for the discrepancy seemed to be that the guy at the low end gave us instructions to put all our assets into the trusts where the guy at the high end insisted it was a very complicated thing, and that he had to do all that work, hence that inflated cost. We opted for the less expensive guy, and I did the legwork to get the assets moved into the trusts. It was very easy and mostly required a letter to the various banks and brokerages to make the change. I wonder if that might have something to do with the discrepancy you are seeing.
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The biggest reason for the discrepancy seemed to be that the guy at the low end gave us instructions to put all our assets into the trusts where the guy at the high end insisted it was a very complicated thing, and that he had to do all that work,

The lawyer should assist with transferring real property into the trust. As you found out, transferring accounts into a trust is not complicated. New accounts are opened and other are closed over time.

The other item to be aware of is that if you own property in multiple states, multiple trusts may be required.
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The other item to be aware of is that if you own property in multiple states, multiple trusts may be required.

For sure. My father owned property both in the United States and in France. He needed a different will in each country. They contradicted one another, but there was no way out of it.

What he finally did was to sell his property in France to a friend of his (who lived both in France and Switzerland), with a life tenancy in that property.

That solved the legal problem, but getting the money wired from his French bank account to his American one was a royal pain. The formalities were trivial, but the execution was enragingly exasperating. The money vanished from his French bank account immediately, but it took an entire year of telephone calling, letter writing, appearing in bank offices in each country, before the money made it to his account in USA. I wonder who made the float in that fiasco.
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Why didn't we put our brokerage accounts in the trust? Laziness. And thinking "beneficiary" ought to cover it with one kid. It was suggested at the time that we might want to do that, and I even have the forms on my desk.
==================================
That was sort of our situation, when we got our trust set up and new wills done, etc. Not exactly laziness, but more of a time-pressure situation. We wanted the trust in place, quickly, to provide for our oldest daughter in the event that something happened to us. She was suffering from cancer, and was on Medicaid and Social Security disability. The trust included a subtrust for her share, designed to keep her eligible for those benefits.

Transferring the brokerage accounts to the trust was a good idea, and still is, but for the moment it was easier to just add the TOD feature. Schwab let you do it online, and Fidelity had a mail-in form. Transferring the accounts to the trust would have involved submitting the trust documents to their trust & estate departments, and who know what else from there. So we just did a TOD designation for the time being. And that's where we still stand today - the brokerage accounts are in our respective names, with a TOD/beneficiary designation, and the Living Trust is the beneficiary. Our oldest daughter has since died, so that aspect is no longer urgent.

Bill
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We don't put cars in our trust. Unless you have an expensive car it isn't worth the hassle. Our lawyer also told us not to bother about cars and that California DMV has problems with titling cars to trusts.
======================
Our newest car is in the trust; we bought it since the trust was set up, so it was no more hassle with the title than if we bought it personally. (This is Wisconsin.) We paid cash; it may have been more complicated if it was financed.

As to financing, we did a different thing with our house. We did a "Transfer on Death Deed" to our living trust, but we still own the house for now, and own it free and clear. But our lawyer said to do it that way in case we ever wanted to get a home improvement loan or HELOC. Some lenders have a problem with a mortgage loan where the property is owned by a trust. So that's what we did.

But then our city tax assessor's office didn't read things right, so our tax bill says the trust owns the house as of now. Our lawyer says it isn't worth fixing it; if we do want to get a loan the lender will do a title search and see the actual ownership from the deed.

Bill
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As for trusts, the inlaws paid a considerable sum for an insanely complicated trust that was drawn up by a lawyer. So complicated that it is tough to find someone willing to administer the trust. The hours and $$ DH and SIL have put into this have been significant. I am not willing to do that to our kids. I have a personal aversion to trusts, but a desire to make things easier for our kids.

That explains a lot. Thank you for saying something about the issue.

While a trust can be complicated, it is not necessary for them to be complicated. And most of them should not be complicated. I believe you are a pretty smart person. You should be able to read and understand a trust with little more than a google search to define a technical term or two you are not familiar with.

Here is one place you can go to play around with a trust. https://www.lawdepot.com/contracts/living-trust/?loc=US#.XRU... The trust language changes a bit depending on the choices you make about the trust as you go through their customization process. You can read the trust as it changes. Of course, I would not recommend giving them any of your actual information, but you can easily give made up names and information which follows your general situation.

I also would not recommend actually using them to prepare a living trust. But on a quick glance, their format follows the general idea of most trusts I have read as part of my job as a tax preparer.

And lastly, I don't really want to try to convince you to use a trust for your specific situation. All I hope to do is to begin to reduce the fear of trusts you have from your bad experience with one.

--Peter
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We are considering a TOD with enough money in it to finish paying for Youngest's college. Don't want schooling interrupted by our (accidental) deaths and probate. The above implies this could be more difficult than we were led to believe.

It's certainly not as easy as some people try to say. But it's also not terribly difficult, depending on the organization. The beneficiary (Youngest, in your case) would typically need to show up in person with an original death certificate in hand. Filling out a new account application would be the other main task, so he'd also need whatever identifying information the organization needs to open a new account.

The biggest risk IMHO is when a brokerage account is TOD. The various investments in the account will be stuck in place from the time the broker learns of the death until the transfer is complete. Hopefully, it won't be important to make any trades during that time. Naturally, that risk can be mitigated with investment choices that don't need frequent trading (as in weekly or less) to avoid risk of significant loss.

Given your intended purpose - finishing up college expenses - you'd probably want the account in CDs or similar. So that time delay risk wouldn't be very significant to you. The only other planning bit I'd suggest is finding out what exactly the institution would need to make the transfer. Hopefully that knowledge would help during what would likely be a difficult time for your heirs.

--Peter
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While a trust can be complicated, it is not necessary for them to be complicated. And most of them should not be complicated. I believe you are a pretty smart person. You should be able to read and understand a trust with little more than a google search to define a technical term or two you are not familiar with.

The inlaws trust was insane. About 6 inches thick I read it forward and back, pulled it apart and put it back together again. The guy who wrote it had since retired and even his law firm was flummoxed over it, not that that stopped them from charging DH and SIL for the hours of consultation on their firm's screw up, even though nothing was ever resolved.

I suspect that if we do a trust it will stop with our death rather than becoming an irrevocable trust that future generations have to hassle with, particularly given the tax consequences of investments within an irrevocable trust. But in order to read the trust I have to first pay for the trust to be written. I am having a hard time trusting anyone to do it right, given I have to pay sight unseen for the product.

Hopefully our experience is not a common one.

IP
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The biggest risk IMHO is when a brokerage account is TOD. The various investments in the account will be stuck in place from the time the broker learns of the death until the transfer is complete. Hopefully, it won't be important to make any trades during that time. Naturally, that risk can be mitigated with investment choices that don't need frequent trading (as in weekly or less) to avoid risk of significant loss.

Given your intended purpose - finishing up college expenses - you'd probably want the account in CDs or similar. So that time delay risk wouldn't be very significant to you. The only other planning bit I'd suggest is finding out what exactly the institution would need to make the transfer. Hopefully that knowledge would help during what would likely be a difficult time for your heirs.


Yeah, I need to call our Vanguard guy to hash it out with them. Youngest has the same rep since I am joint on his taxable brokerage which gives him the benefit of our higher balances. The funds are in a money market, not invested since funds needed within 2-5 years. Hopefully all they would have to do is transfer the funds from the TOD account to his account, but I need to touch base. We figure we will just keep enough funds in the TOD account to take care of the rest of his college expenses and pay for them from there, so there remains sufficient funds for his college if we are hit by a bus.

Really weird how retiring, and thus our spending more time together increasing the possibility for being killed together, changed our way of thinking from long term way down the road estate issues to what happens if tomorrow...

IP,
tending to plan for multiple possible outcomes
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Transferring the accounts to the trust would have involved submitting the trust documents to their trust & estate departments, and who know what else from there. So we just did a TOD designation for the time being. And that's where we still stand today - the brokerage accounts are in our respective names,

Fill out the appropriate form to transfer to the estate and provide the trust document should be all that is necessary.

Establishing a successor trustee took a little more effort but wasn't that difficult. The only real issue was with a 30+ year old account that the bank claimed we hadn't submitted the first death certificate 20 years ago. It had been thoroughly messed up by going through so many software changes that it took multiple levels of escalation to close.
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We did a "Transfer on Death Deed" to our living trust, but we still own the house for now, and own it free and clear. But our lawyer said to do it that way in case we ever wanted to get a home improvement loan or HELOC. Some lenders have a problem with a mortgage loan where the property is owned by a trust. So that's what we did.

Lenders are getting better with handling real estate titled to trusts.
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I suspect that if we do a trust it will stop with our death rather than becoming an irrevocable trust that future generations have to hassle with, particularly given the tax consequences of investments within an irrevocable trust. But in order to read the trust I have to first pay for the trust to be written. I am having a hard time trusting anyone to do it right, given I have to pay sight unseen for the product.

Hopefully our experience is not a common one.

IP


Only if you have significant assets and don't trust your children would a multi-generational irrevocable trust be reasonable. Definitely not a normal trust.

Our trust is 32 pages. My MIL's/FIL's trust includes a special need trust and is 29 pages. Not certain why ours is a little longer. A first look is that it is mostly formatting including title page and page layout differences. They were written by different lawyers. Their flow is similar. Both are boring to read but each section is easy to understand.

The estate tax exemption goes back to $5 million a person in 2026. Our trust was written when estate tax exemption was low and gives 30 days to decide whether or not to setup a B trust. I don't understand how the current portability of a spouse's unused estate tax exemption works.
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Really weird how retiring, and thus our spending more time together increasing the possibility for being killed together, changed our way of thinking from long term way down the road estate issues to what happens if tomorrow...

IP,


Our next vacation is with my oldest step-son's family. He has information about our lawyer who has the originals of our wills and trust. Currently we are still involved in handling my sister's and MIL estate plus an account from my father's estate. If the plane crashes, the younger step-son will have a complicated mess to handle.

I don't believe that either step-son have a will. The oldest step-son's mother vanished decades ago. He really needs a will and should have a trust.
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Only if you have significant assets and don't trust your children would a multi-generational irrevocable trust be reasonable.

Both would depend on when we die. Old age, no problem. Way fewer assets, potentially, and more mature kids. Youngest has take a leap of maturity this year, but he is still only 21 and not yet in his career. How would he handle getting millions of dollars were we to get hit by a bus tomorrow? Who would take advantage of him to get access? Those are the reasons why we are considering a trust, but not multi-generational. No desire to manage the kids from our graves in perpetuity.

Honestly all kind of crept up on us. We were just hard workers who saved and invested well. We are not spenders which is why there is the potential for our assets to grow in old age rather than diminish, but by then I should have finished prepping them for the responsibility of inheriting significant assets. The concern is a hit by a bus scenario that takes us out prematurely.

IP
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Some lenders have a problem with a mortgage loan where the property is owned by a trust.

Just refi'd my house which is in a revocable trust.

It required some extra work.
Lender required a copy of the trust to review.
We had to basically sign every document twice - once as ourselves and a second time as trustee.
(which with the amount of paperwork for a mortgage is a PITA.)
For the cash from the refi, we had to either receive it as a check made out to the trust or have it wired to an account in the name of the trust. (so I had to quick open a checking account in the trust name - which took ~1.5 hours at my credit union.)
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For the cash from the refi, we had to either receive it as a check made out to the trust or have it wired to an account in the name of the trust. (so I had to quick open a checking account in the trust name - which took ~1.5 hours at my credit union.)

Why not just re-title your checking account to the trust?
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Why not just re-title your checking account to the trust?

The checks I have wouldn't match the account name anymore (may or may not be an issue - I dunno)
And I don't think it would have been any easier/quicker.
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