Yep, laws change. Our revocable trusts have remained the same, but wills and POA's for financial and health matters have needed revisions.

For most people, the use of a revocable trust to dispose of property is the better approach to take than wills. Depending on the size of one's estate, law changes and family changes may or may not require document changes. Powers of attorney, other lesser issues can always be addressed.

Reality can't be avoided, having a proper estate plan and documents in place is everyone's obligation if you care about your heirs. If you don't then no need to give it any attention. .

Your will or revocable Trust should be revised anytime there is a change in the status of anything or person(s) mentioned in the document.

We just rewrote ours, sadly,shamefully,after 32 years. Many changes! So happy to have it done!

I have gone and still going through a nightmare with inheriting after both parents passed, they put my brother as executor,etc. and I find out they take and take and take and do horrible things to you.So many have told me stories of their sibling who is executor cleaning out all the money due to them.

And the thing is there is no law for that, executors do as they please.

I would go through a lawyer the whole way for your kids to be treated fully and fairly.

Yes, you do need to be up on the laws as my parents will was done in the 80's and they passed two years ago and changes and thankful one was so good to me and happy that the lawyer told me that as I am sure brother/sister would not have said one word about it at all. Also that all siblings must be left same share of cash, can't give on all of it or one huge amount and others tiny or none at all.

I tried to get my parents to have a lawyer do it oh, no, my brother would do it but his wife took control of it and again its not legal but nothing to do about it.

No one tells you anything and wish I had known right from the beginning might have made a huge difference.

kathy

"Also that all siblings must be left same share of cash, can't give on
all of it or one huge amount and others tiny or none at all."

Am assuming you are not in the US. Or, have gotten erroneous information. If I bequeath 249,000.00 to one 'sibling' (beneficiary) and 20.00 to another, in my Last Will and Testament, those are my final declarations, and that is what each will receive when the Estate is settled and the proceeds distributed. The remainder will be distributed as designated in our Wills.

I wish I could have had Dad's will reviewed before he died and I became executor. I was told by two different attorneys and the Clerk of Court that his will was full of loopholes and very poorly written. Yes, it was written by an attorney. One person read through it and said 'this will is weird.' One major provision, which from conversations with him I now feel certain he did not understand, ended up giving a vast amount of his estate to his live-in SO. I know what he intended, but that's not the way it was written. I like her well enough, but that one sentence sure caused some hard feelings. By the way, I contacted the attorney who wrote it when I started the process, just to ask questions and get some help. She didn't have time, and referred me to the Clerk of Court.

My in-laws had theirs redone last year, and DH is executor. We already told them that we would like a disinterested third party to review them as backup.

We just redid our legal paperwork due to our move. Laws vary from state to state, so best to review if you move. And here in PA, we have found that we do not need a trust, as we did in California, since probate laws vary so much. And, if we keep our CA trust, we will have to file a tax return in CA, even if we live in PA.

I didn't specialize in fiduciary taxation, sushipup, but I'm not sure you were told the right story. If a trust comes from a non resident decedent, there's no property or source income located in California and the fiduciary isn't a California resident, there's no Cal tax or filling obligation. No harm done by your action, but it's typical that a local practitioner in one state isn't familiar with rules elsewhere.

A revocable trust (becomes irrevocable upon the settler's death) is a great instrument. You still need a will, but if all large assets are in a trust, it makes settling an estate as fast and simple as it can be. A trust can provide transfer of property through several generations -- avoiding probate and public record.

Think of a trust as a legal 'individual'. It holds property, files taxes, determines the dispersal of income. You can alter your revocable trust as you wish during your lifetime. The trustee you name can do what the trust allows him or her to do after you are gone.

It doesn't cost much to set up a trust. Remember, an unfunded trust is worthless! You must make the trust owner of your large assets. (You still control the trust and those assets until your death.)

As our attorney explained, we are talking about the CA trust during our lifetimes. PA law allows for much easier transfers of property after death. I'd think that our new attorney would love to charge us to set up a new trust, but our assets that would be affected are less than the millions that make it desirable in PA. It's been an education in different state laws.

When property is in a living trust, there is no transfer at death. But, I don't want to be guilty of my own accusation, I'm not familiar with PA property lsw

I have had a revocable trust since 1998 and my son will be the administrator when I am no longer living....and all assets are to divided equally between my three children....but now, since my grandchildren are getting older, if it might be wise to divine it into fourths and they share the one-fourth. Has anyone done this?

Generally, you leave to your children and assume that they will take care of their own children.

We discovered after Mom passed away that finding the witnesses that signed the will was necessary for swift completion of probate--since Mom & Dad had a legally valid will, but did not set up a trust. We were lucky to have found the witnesses via an internet search. It was simpler because we were able to locate the witnesses--would have still been okay, but would have taken longer. So maybe in certain states, in certain cases, it doesn't hurt to keep track of whoever witnessed your wills.

A trust can continue for generations. It doesn't *have* to distribute entire assets to anyone. The named trustee can be empowered to decide how/when/in what circumstances to distribute from the trust -- if that's the way the trust is written. Trusts have a lot of leeway for the settler to direct what happens during his or her lifetime, and set up what's to happen after the trust becomes irrevocable after the settler's death.

Winesses to our wills have been employees in the office of the attorney who wrote the wills.

"Generally, you leave to your children and assume that they will take care of their own children."

Yes, this is true the majority of the time for the vast majority of people. But not always.

It can vary significantly depending on personal and family circumstances. An example is when the estate planning generation's children are financially secure but grandchildren are adults just starting out in life, then it can be better to bypass the children in whole or part, jump a generation and leave significant bequests directly to grandchildren. That can also save estate taxes.

I just this week closed out the last trust from my parent’s
estate. It was a bypass trust set up when my mother passed away 14 years ago so
irrevocable. My sibling and I are beneficiaries for the trust but my father was
the beneficiary of the income from that trust, with restrictions, until his
death 2 ½ years ago. The way there trusts were written gave me great leeway as
far as asset distribution. I was able to postpone the sale of several
properties until leases were up if I wanted to and did. My sibling and I had
income from those properties for the last 2 ½ years. I also waited until CD’s
came due to distribute funds. I was really not that bad with the help of our
CPA and attorney. Probate would have been a nightmare and with the bypass
trusts we did save on estate tax.

DH and I had our trusts and wills looked over this last year.
I am so thankful my parents took me to all the meeting with the attorneys and
accountants I knew exactly what to do and who to get advice from I can’t imagine
walking into successor trustee position with no prior knowledge of the estate.
We have kept our daughter and grandson informed of any and all changes to our
trusts and wills so they can be prepared.

Elmer,

I’m pretty sure sushipup1 is correct. A trust is
a separate entity and as soon as the settlers pass the trust has to file for an
ITN number so even if they had no assets in California the trust would have to
file a final tax return. I could be wrong and I’m sure if they had no assets or
not paying any taxes in California they probably could just ignore it. My
parents bypass trust filed its own tax return as soon as it was created, 14 years ago, when my
father passed away we had tax returns
for the other trusts, with new ITN numbers, and one for his personal income using his SS number.

kathleen44, you sound like a situation I experienced. But you're in error about the equal division requirement.

It's a common misconception that if you have a Trust, you do not need a Will. Absolutely wrong.

phoggie, you can do the division how you want. You can certainly leave something to your grandchildren. You can give them equal shares or any portion you so desire. I would NEVER depend on a parent to do the right thing. Estates bring out the greed in people. I've seen it so many times.

Simple changes to a Will are easily accomplished through a Codicil. For deceased heirs, etc, this is an easy way to go. It's better however to put conditions in the Will/Trust for instance if Heir 1 should not survive me, Heir 1's portion shall be given to ______ or whatever. People laughed at me for being so precise in my Will but given the changes over the years it lasted much longer than it would have had I not include the clauses and conditions I did. However, my Will now needs to be changed completely so I'll have a lot of work to do.

partst, I'm a CPA, now retired, and spent almost all of my career practicing in California. The comments I made concern very basic rules and principles and I'm more than comfortable with what I said. You can accept what I said or not, your choice.

Using trusts in place of wills to dispose of property saves on probate fees and on ease of access to assets but rarely will make a penny of difference with estate taxes. Using a will or a trust is a choice to accomplish the same thing, same end result. The main difference is that living trusts as a device will avoid the need to go through the state court probate process and the resultant probate fees and costs which result when property is disposed of using a will. Otherwise, same thing, same effect, same techniques and alternatives are available. Property disposed of by will often will be placed into trusts, again, the same outcome is visible when the dust settles no matter how it's done.

When I first worked for a Trust Officer of a bank in 1959 & we acted as Executor & often Trustee in California, any gross estate over $60,000 had to file an Estate Tax Return (Form 706) with the IRS (this much later went to $600,000) and a California Inheritance Tax Return (I think IT-22) had to be filed with the State, and, of course, any determined taxes had to be paid. These often held up the total estate payouts, but that would have been the case in a Living Trust also. California voters, by proposition, voted out the CA Inheritance Tax in 1982, and although a Federal Estate Tax still exists, the cut-off amount is pretty high ($4 million or something) and I would venture to guess many more estates & their beneficiaries were inconvenienced with the $60,000/$600,000 cutoff in earlier days than there are today.

Also trusts are nothing new. The trusts we handled as Trustees were called Testamentary Trusts Under Wills, and were not much different than the Living Trusts are today.

As the years went by, Executors in California got more "individual powers" (no need to consult the Court), and in the "smaller
probate estates, after any taxes were determined & paid, the estate was distributed to the heirs, often in no more than several months (of course there were often beneficiaries that wanted "their money" yesterday or they couldn't function).

When my stepmother died a resident of Michigan in 1990 (my dad died several years earlier), without a Living Trust, I was surprised how simple a probate proceeding there was. The "hold-ups" really were only in selling a couple pieces of property where the first buyers backed out (earnest money deposits were kept by the estate); otherwise, we siblings received our inheritances within a few months.

I think I agree with Elmer. I've never seen the savings in estate taxes via a Living Trust either.

Tomorrow at 4 my husband & I have an appointment with an estate attorney. Since we have no children, we'll probably give specific amounts of cash to five nieces & nephews (or their descendants), and the balance to charity. Should be fairly simple.

After 1982 and until 2004, California imposed a tax (different from the inheritance tax) equal to the credit allowed for each estate against Federal Estate tax for state estate tax. It was called a "pick-up tax", whatever you could reduce your fed tax by for state tax, that's what California imposed. They piggybacked on the federal 706 filing.

The federal exemption for taxable transfers passed over $1 million in '02, and is now at ~ $5.5 million per person, or about $11 million for a married couple. When it was below $1 million, there were a surprising number of people of otherwise modest means who had taxable estates because of ownership of homes whose values had skyrocketed over their decades of ownership.

Elmer,

I have to disagree with you again my parent’s estate had a
will for each of them and trusts as does mine and DH’s. When my mother died in
2004 my father disclaimed her half of their estate, split the estate, and
created a bypass trust. By doing that they were both under the then exemption
amount for paying federal estate tax so no tax was due on her newly created
bypass trust. If my father wouldn’t have done that when he died we would have
had to pay estate tax on the entire estate. By splitting it when she died we
saved quite a bit. She also had a separate trust in her own name that was set
up the same as their family trust the beneficiaries were the children but my
father could use any earning from the trust as long as he was alive.

I’m not saying you don’t
know what you’re talking about but we have gone to an excellent CPA and estate attorney
for years and I so far they haven’t given us any problematic advice and have handled
everything just as planed out years ago.

"I’m not saying you don’t
know what you’re talking about..."

Sorry, I can't return the gesture. You're describing what you were told, not what you know and understand. I'm someone who did the talking in such situations, to clients just like you.

Any inheritance can be disclaimed under any circumstance, whether it's a result of a will, living trusts, or even if by intestate succession (by action of law when there's no will or intervivos trusts present). It and the other things you describe are common and vanilla. Estate and estate tax planning and administration are not typically difficult or complicated undertakings.

I'm very glad you're satisfied with your experience. I'm wondering if maybe your advisors made some molehills into mountains to make you think they really did more than they did or that the degree of cleverness brought to bear was something more than it really was.

I’m positive they didn’t make molehills into mountains all I’m
saying that yes a trust done properly can save on estate taxes. I m sure there
are other way to accomplish the same outcome but I thought the conversation was
about wills and trusts. If you think I’m foolish enough to just take the word
of any CPA or attorney I beg to differ you really have no idea what my situation
is. You’re welcome to your opinion I just
don’t happen to agree with all of it.

IMO the advantage of revocable trusts is not foremost to avoid taxes, but to manage assets over time, and to do so out of the public eye. A trust can continue over generations. You don't have to have a huge assets, but assets and their management is not public record.

I can relate to kathy3754's post about thresholds of $60K. When my late mother's trust was created, upon her death it divided into four separate trusts. The attorney intended this to evade taxes, but when thresholds rose, as trustee, I combined them into one trust and could file just ONE state and ONE federal return.

Different provinces have quite different rules, and I think that various states do, as well, so I think that it would be unwise of someone to figure that some information given here, related to one state, might apply in theirs.

Ontario set up a rule recently that says that an executor must file with the province, within 60 days, a fairly precise and accurate accounting of the value of the assets of the estate, with substantial penalties for non-compliance. In that in many situations an executor is a family member, who may be carrying a heavy load of grieving, in addition to one's regular life issues, that may become quite onerous.

(Some have suggested that it might be wise for a resident of Ontario to move to another jurisdiction, prior to death).

ole joyful

chisue, there is often no oversight or scrutiny of property dispositions of decedents. The IRS audit rate for estate tax and income tax of fiduciaries is very, very low. Unless there's a controversy or dispute among heirs, it's rare for any third party (including another lawyer or accountant) to ever even look at documents or how property was handled.

It's part of why people practicing in this area can tout how "successful" they may be with particular tactics or approaches - almost always, no outside qualified practitioner ever looks or questions what was done. As far as combining trusts into one, so long as doing so didn't disturb the tax consequences, and if other heirs (if any) were on board, who's to say anything?

joyful, this is an area like so many others where the rules in Canada are completely different from those in the US. What you may be familiar with there doesn't likely translate into how things work here.