- quote -

What about partial distributions, which may be urgently
needed? Say you reserve enough for double the tax estimate and
creditor claims (filing period over) - can trustee release
remainder money early or in stages - guidelines?

BMS wrote:
- quote -

Most of the work is the same either way. The fiduciaries and their
attorneys still have to do the tax planning, have the assets
appraised, prepare the estate tax return, dispose of the assets, deal
with the beneficiaries, etc. Fiduciary income tax returns have to be
filed in either case.

It can't be all that hard to probate a Will in Massachusetts. I was
tax counsel on a Massachusetts estate where local counsel was a solo
general practitioner rather than a trusts and estates lawyer, and he
was able to probate the Will without much difficulty, and at a cost
far less than "hundreds of thousands of dollars." It was more like a
couple of thousand dollars.

As for timing, the estate tax return is due 9 months after death, and
can be put on extension for another 6 months. Then it takes anywhere
from a few months to a few years (with the midpoint being about a
year) until the IRS either accepts the return without audit or advises
that they are auditing the return. A fiduciary who distributes the
assets before receiving the IRS estate tax closing letter does so at
his/her peril.

While there may be reasons for creating a revocable trust in a
particular case, avoiding having to probate the Will is generally not
one of them. Indeed, even where someone has a revocable trust, the
Will usually has to be probated anyway, since the decedent might have
had assets not in the trust, or might have been a beneficiary of a
trust (so that an executor has to be appointed to sign off on that
trust), or might have been a party to a lawsuit, or might have had a
testamentary power of appointment over a trust (so that the Will has
to be probated to prove whether he/she exercised the power). But as
noted above, it's generally not a big deal to probate a Will.

Bruce Steiner, attorney
NYC and Hackensack, NJ
also admitted in FL

Bruce Sterner <bsteiner[at]att.net> wrote:

- quote -

I totally, completely, categorically, and absolutely disagree.

MTW

You have to pay attention to the state. In the Commonwealth of
Massachusetts, going into probate, with this example, without the proper
trust work could easily run into hundreds of thousands of dollars and tie up
the estate 6-24 months. The legal work for the trust would cost pennies on
that cost.

"S. L. Richardson" <blackdog[at]worldnet.att.net> wrote in message
news:Xvqfb.163366$0v4.12310026[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -

- quote -

Not in Texas, where I am licensed. Maybe in other states - about which I
have no idea.


- quote -

True, but was illustrating my point about the cost versus benefit analysis.

Jason Richardson wrote:

- quote -

I think you have it backwards. A Will requires a low level of
capacity. A trust may require a contract level of capacity, which is
higher. However, some people think that a revocable trust, since it's
effectively a Will, should only need the same level of capacity as for
a Will.

- quote -

In the context of a $6 million estate, whether you pay $4,000 to
create a revocable trust or (say) $2,000 to probate the Will, or both,
is unlikely to be a meaningful part of the cost of the estate
administration.

Bruce Steiner, attorney
NYC and Hackensack, NJ
also admitted in FL

jt hit it right on the head on one excellent point - Living Trusts aren't
always a great way to avoid "legal expenses." Sometimes you still need some
legal advice on administering the trust terms. But it should cut down on
the need for legal advice - that's when you go buy an hour of a lawyer's
time to review the trust, tell you what to do in certain circumstances.
Still cheaper than probate...usually. Remember, in states where probate is
relatively easy the living trust can cost more than the probate expenses.
It all just depends.

BMS also made a great point - in states where probate is expensive and/or
time consuming the living trust can be a tremendously effective tool.

Jason
Attorney, CPA, happy Texas Longhorn (they're up 28-6 right now....happy so
far)
Sherman, Texas

I am not your lawyer, nor your accountant, this isn't legal or accounting
advice, etc...

The sucessor trustee may find the job complex and baffling,
so be sure there is some real benefit for such a trust. The
trust will eventually need it's own tax-id (after succession)
and income tax... and these may be in addition to an estate
tax-id and income tax... or joined together... or...

The s. trustee likely will be volunteer and amateur, yet have
directives in the trust with dire legal/tax consequences
that interface in mysterious ways w obligations to creditors,
etc. Not an answer to be hand held by lawyers all the way
since the trust is supposed to be a legal fee/procedure
avoidence tool. Even legal hand holding can lead to wrong
results unless you consider very detailed and wide ranging
considerations re: estate value, tax, life insurances, etc.

Well, I'm not making these points too clearly but maybe if
someone lashes me with a traditional internet attack I can
state the concerns more clearly...

In Massachusetts, probate can be long and difficult and Living Trusts make
sense when combined with a properly drawn up Power of Attorney and,in this
state, a Healthcare Proxy.

"S. L. Richardson" <blackdog[at]worldnet.att.net> wrote in message
news:nr6db.154529$0v4.11532267[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -


======================================= MODERATOR'S COMMENT:
Request: To save clutter, please consider trimming the post to which you respond. Thank you. -HWW

On Sat, 27 Sep 2003 04:57:57 CST, "S. L. Richardson"
<blackdog[at]worldnet.att.net> wrote:

snip

- quote -

Thanks for the excellent info. Will definitely research further.

Bill

I don't like Living Trusts ("LT"), but I'm spoiled because Texas' probate
system is pretty easy and inexpensive compared to other states. Also much
quicker than other states, all things being equal. There, my bias is stated
and out in the open.

I do use living trusts when clients:

1) Have out-of-state property (put the out of state property in the LT to
avoid having to do an ancillary, or, extra probate in that state at the
owner's death);
2) A single person who is worried about planning around being (potentially)
incapacitated and they are concerned about who will manage their assets;
3) Anyone who is *adamantly* secretive and doesn't want others to have the
opportunity to find out about their finances (remember, probate records are
public records);
4) A person who is being taken advantage of (example - elderly lady, has 2
kids...one kid keeps begging money off of her; we set up Living Trust, name
good kid as trustee...now bad kid has to get good kid to agree to give money
to bad kid...sort of 'cuts' off the bad kid without mom having to be the bad
guy) (RARE);
5) Own property in a state where probate is expensive/time
consuming/problematic; or
6) If I'm worried about a Will contest (in Texas at least you don't have as
high a standard of mental capacity to enter into a trust (contract law
applies) than a Will (testamentary capacity in Texas is a fairly high
standard of mental acumen), so if I'm worried about whether someone doesn't
have sufficient testamentary capacity (i.e., doesn't know enough about
what's going on mentally to be able to understand what they're signing) I
could (in theory) use the Living Trust to do the same thing because it
doesn't require nearly as stringent a mental faculties requirement.

The bad thing about living trusts is that they're hard to manage. You
*must* retitle *EVERY* asset you own in the name of the trust for that asset
to pass free of probate. If you put all 29 of your "things" into the trust
and forget just 1 you must do a form of probate to clear title to that one
asset when you die. I have *yet* to see a fully funded revocable living
trust and I've been practicing as a CPA or attorney since 1994. I am in the
middle now of probating a $6 million dollar estate that had this
beautifully-drafted, expertly prepared, expensive living trust done several
years ago....that was never funded. By "funded" I mean the assets weren't
placed into the trust (deeds of real estate into the trust, retitling bank
accounts, etc..). They paid $4,000+ for this work and didn't get the
benefit.

Bear in mind that Living Trusts are revocable (generally) and because of
this they are includable in your estate for federal estate tax purposes.
Shady living trust "salesmen" like to imply that you have tax savings with a
Living Trust that you don't have with a Will. Hogwash. Any estate tax
planning schematics in a Living Trust can (and quite often are) placed in
your Will. Talk to you estate planning attorney about this - I won't bore
you with estate tax planning other than to tell you anything that can be
placed in a Revocable Living Trust can also be placed in your Will.

Certain others I've seen that are "selling" this technique also like to
imply it helps you qualify for medicaid without losing your assets. Not
only is this wrong but this may be fraudulent. Talk to your lawyer.

I do not mean to imply you were given bad legal advice -- you may live in a
state where the cost of probate, coupled with the complexity of it and the
length of time of the probate makes sense to use a Living Trust. If that is
the case you may have been given excellent advice. Please do not think I am
giving you legal advice - I am not. Rely on your attorney - I am not your
attorney. Your attorney may also know facts which you didn't disclose here
which may lead him to conclude, and recommend, a living trust to you.

Suffice it to say Living Trusts are a probate avoidance technique. When
used properly and effectively they do avoid probate. They do not save
estate taxes, nor do they help you get qualified for medicaid so when you go
in the nursing home that the rest of us can pay for it while you keep your
assets. Living Trusts are also expensive (to set up properly & to properly
fund and maintain through the years by remembering to retitle ALL accounts
in the name of the John and Sue Doe Revocable Living Trust, and not as "John
and Susie Doe").

Just my opinion...for what its worth. Damn but I'm long winded.

Talk to your lawyer. Be *sure* this is what you want.

Jason Richardson
Sherman, Texas
Attorney, CPA

I am NOT your lawyer, nor am I your accountant, this is not advice, just
general information, etc....

WeathermanBill wrote:

- quote -

Sometimes, but not in most cases. Is there any special reason for
having one in your case? See my previous messages in this thread.

Bruce Steiner, attorney
NYC and Hackensack, NJ
also admitted in FL

My wife and I visited a trusted lawyer about some asset planning.
Went in thinking will, power of attorneys, asset splitting - came out,
with an small understanding of a living trust. Seems it will include
a comprehensive list of things that will make our passing easier the
lest of which will be no probate. Is a living trust as good as it
sounds?

Bill