I wouldn't shoot something dine because it isn't in widespread use. In
Massachusetts the rules have changed significantly in the past couple of
years and [they[le are having to update old plans.

"jay1000" <jfschonREMoVE[at]yahoo.com> wrote in message
news:0K_Ed.21047$Wo.16977[at]lakeread08...
- quote -

Thanks for the tip about house. Another good idea shot down.

I will explore the living trust strategy with my attorney but suspect it
will not work as it is not in widespread use.

Jay


"MTW" <mtwingcpa[at]yahoo.com> wrote in message
news:34j6pbF4b9j5iU1[at]individual.net...
- quote -

jay1000 wrote:

- quote -

Keep in mind that placing the home in the bypass trust might not
be a good idea either, as it will likely no longer qualify for
the personal residence gain exclusion upon sale.

As to the balance of your question, I suspect that the answer
will very much depend on the kind of ownership schemes that are
recognized under applicable state law. Perhaps a properly worded
joint living trust will do the trick, but I would definitely
recommend consulting with a knowledgeable local attorney.

MTW

Is there any way to configure non-retirement assets so that the assets of
both the husband and wife go to funding a bypass trust?

In this case, the individual non-retirement assets of either spouse are
insufficient to fully fund a bypass trust but the combined non-retirement
assets (plus the house) are sufficient.

Prefer not to go the route of using retirement assets to fill out the bypass
trust.

Some thoughts:

1. Disclaimer Trusts
All non-retirement accounts and house held jointly as Tenants by the
Entirety
Surviving spouse is primary beneficiary and Disclaimer Trust is secondary
beneficiary
Surviving spouse disclaims everything

2. Article by Bruce Steiner states:
"Finally, several recent private letter rulings suggest that in a common law
state (i.e., a noncommunity property state) it may be possible to utilize
the same nonretirement assets to fund the credit shelter trust regardless of
which spouse dies, if one spouse creates a revocable trust and gives the
other spouse a general testamentary power of appointment over the trust
assets if the other spouse dies first, or if both spouses create a joint
revocable trust for their nonretirement assets.42 If this works, the
nonretirement assets will pass to the credit shelter trust regardless of
which spouse dies first. Some commentators agree with this result.43
Others disagree.44"

3. Transfer all assets to an Alaska Community property trust.
Surviving spouse disclaims everything except retirement assets.

4. If nothing else works it may pay to shoot for 1/2 the house value into
the bypass trust. Quote by Cal Brown:
"If the home is held through tenancy by the entirety, for example, the home
will automatically transfer to the surviving spouse instead of to the trust.
One way around the problem is to title the property as "tenants in common,"
which helps preserve the trust but doesn't protect the property from one
spouse's creditors. Another alternative is for the couple to own the home
through tenancy by the entirety, but arrange for the surviving spouse to
disclaim the inheritance. That will allow the deceased spouse's ownership to
go into the trust."


I realize that this is a complex subject so I will be seeing an estate
planning attorney fairly soon. But I also prefer to line up some good
questions before hand.