"Dave Dodson" <dave_and_darla[at]Juno.com> wrote in message
news:1177183106.416935.190200[at]q75g2000hsh.googlegroups.com...

- quote -

It was my understanding that an asset held in one spouse's name only would
belong to whomever is specified in the will and would have to go through
probate before the other spouse could take possession of it. Am I wrong
about this? In other words, even if the will said "Everything I own goes to
my wife," the asset would still have to go through probate unless it is
jointly owned.

On Apr 21, 11:25 am, "Don" <dwz...[at]telus.net> wrote:
- quote -

How would that be inconvenient?

Dave

"Dave Dodson" <dave_and_darla[at]Juno.com> wrote in message
news:1177130040.436199.121180[at]y5g2000hsa.googlegroups.com...

- quote -

True. And spouses in that situation should check to make sure all assets are
in both names. It would be inconvenient if some old bank account or stock
certificate were later found to be held in one name.

On Apr 20, 8:51 pm, "Don" <dwz...[at]telus.net> wrote:
- quote -

If there are no heirs, there is a very simple way to avoid estate
taxes: donate the remaining estate to charity upon the second spouse's
death.

Dave

"Dave Dodson" <dave_and_darla[at]Juno.com> wrote in message
news:1177116017.890619.288410[at]n59g2000hsh.googlegroups.com...

- quote -

Thanks. That is interesting. Of course, if you are talking about a husband
and wife only, with no other heirs, a simple solution is for them to own
everything jointly (JTWROS). Then, the survivor keeps it all and there are
no worries about probate, legal disputes, etc, and no taxes until both are
gone.

On Apr 20, 11:32 am, "Don" <dwz...[at]telus.net> wrote:
- quote -

There are circumstances where trusts can avoid estate taxes. I can't
keep track of what the threshold for owing estate taxes, but for sake
of argument, lets say that it is $2 million. Suppose that the husband
and wife have joint assets totalling $3 million, and that they have
simple wills that leave the survivor the deceased's half of the
assets. When the first dies, no estate tax is due because of the
unlimited marital deduction. When the second dies, the $1 million that
exceeds the threshold then is subject to estate taxes, which I think
run in the 40-50% range. The estate tax due exceeds $400,000. The
remainder is distributed to the heirs.

Instead, suppose that the husband and wife have a trust with A/B
provisions, with a total net worth of $3 million in the trust. When
the first dies, the trust assets are split into two parts (the A and B
parts). The deceased's A part is subject to estate taxes, with none
due because it is less than the threshold. The surviving spouse has
access to the B part of the assets, and to the income generated by the
A part, but not the principal. When the second dies, the A part is not
subject to estate taxes since it already has been taxed. The B part is
not subject to estate taxes because it is less than the threshold. The
estate tax due is zero. Both parts now are distributed to the heirs.

Thus, having the trust saves over $400,000 in estate taxes.

Dave

"Tad Borek" <borekfm[at]pacbell.net> wrote in message
news:4LMVh.16936$JZ3.4601[at]newssvr13.news.prodigy.net...

- quote -

It was my understanding that living trusts do NOT avoid taxes, but only the
cost and inconvenience of probate. Perhaps more important than cost is the
time it takes for probate to run its course, the hassle of assembling
documents, etc. Another advantage is that the living trust is not open to
inspection by others, while wills and probate procedures are matters of
public record. So the living trust avoids legal challenges if someone
doesn't agree with how a will distributes assets.

On Fri, 20 Apr 2007 10:25:04 -0500, "Elizabeth Richardson"
<erichktn[at]worldnet.att.net> wrote:

- quote -

attorney will get you nothing if you need to sign tax returns for a
mentally disabled person.

"Mark Freeland" <BnetOnewsX[at]sbcglobal.net> wrote in message
news:3WXVh.11452> Make sure it is a durable power of attorney - the "durable" is the whole
- quote -

Good point, Mark. Just as in other matters, and specifically financial
planning matters, it pays to do a little research. For example, in some
states you may need a Specific Power of Attorney to have someone sign real
estate documents for you as a General Power of Attorney may not be
recognized for this purpose. But even though it may not be as simple as it
sounds, it is an important part of financial planning for the elderly.

Elizabeth Richardson

sorry if I did not make it clear

I meant that *in addition to* the living trust, is it as simple (per the example
posted) to just update our current will with an addendum

we still intend to create a trust document

On Apr 20, 6:38 am, "John N" <j...[at]trudy.jp> wrote:

- quote -

Among other thigns, a Will is subject to probate. A trust is not. That
may or may not be a big deal but it is one of the main reasons for
creating a living trust.

Tad Borek wrote:
- quote -

could we also update ourselves the old will, simply by creating a single sheet of
paper titled "Addendum to the will of Mr and Mrs John N Living Dated 04/19/2007" ?
Then simply list the items that have changed and have 2 someones witness our
signatures?

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:fWVVh.330936$5j1.271773[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -

Make sure it is a durable power of attorney - the "durable" is the whole
point, otherwise the power may vanish exactly when you need it - when the
person becomes incompetent.

See, e.g. http://www.oag.state.ny.us/seniors/pwrat.html (NYS definitions)

Mark Freeland
BnetOnewsX[at]sbcglobal.net

"Dave Dodson" <dave_and_darla[at]Juno.com> wrote in message
news:1177031594.493750.94180[at]e65g2000hsc.googlegroups.com...
- quote -

Or she could have executed a power of attorney a few years ago which would
accomplish the same thing. I have not yet done this, but, I can assure you,
one of my daughters or granddaughters will have one before either my husband
or I could be considered incompetent. You don't have to have significant
assets to need someone to legally execute documents for you.

Elizabeth Richardson

On Apr 19, 7:07 am, "John N" <j...[at]trudy.jp> wrote:
- quote -

One of the advantages of a revocable living trust that none of the
previous responders has mentioned is the ease of transition of control
of assets. My mother is 94 years old, and has been managing her
affairs pretty well until a couple of years ago. But now she has
dementia (confusion) that limits her ability to understand complicated
business affairs. Fortunately, she had a trust, of which she was the
original trustee. The trust gives her the right to act as trustee as
long as she is willing and able, and names her bank trust department
as the successor trustee.

She recently moved into an assisted living facility, and decided to
sell her house and car. There is some question as to whether she is
competent to sign the required documents. Without a trust, it would be
necessary for someone like my brother or me to go to court and have
her declared incompetent so that the court could appoint a guardian
who could handle her business affairs. Usually, such a guardian is
responsible to the court, and getting the court's permission to
conduct her business can be costly and time-consuming. Furthermore,
such legal action would be humiliating to her, and my brother and I
would not want to do that.

Since she had a trust, her lawyer suggested that she resign as
trustee, so that the successor trustee could handle her affairs under
the terms of the trust. Even though she has dementia, such a
resignation could hardly be contested by anyone, because to contest it
you would have to prove that she is not competent to sign such a
resignation, which also means that she is incompetent to manage her
affairs, thus leading to her resignation. The successor trustee then
was free to act on her behalf to sell her house and car.

Dave

John N wrote:
- quote -

John, the most common would be a revocable trust, also called a living
trust. These types of trusts can be used to avoid estate taxes but even
if that's not an issue, they simplify the administration of your estate,
and depending on your state, may save a lot of money too. So many people
who don't need a trust for estate-tax purposes use them.

To de-mystify it a bit...a simple living trust would be a piece of paper
titled "The Mr & Mrs John N Living Trust Dated 4/19/2007" that has a few
paragraphs of legal blah-blah-blah, and then you list out who gets what
when you die. Sign & file it and there, you've created a "trust". Then
you re-title the assets you want to fund it with (which can include bank
accounts, brokerage accounts, your home) in that trust's name, and there
you go - at death those assets pass according to the trust document,
without running a will through probate court.

Much simplified explanation and there are infinite variations, but
that's the process in a simple estate, for the trust piece. Your
IRA/401ks pass to their beneficiaries and your personal effects would
typically pass by a will, so the trust is just one piece of the plan.

A very good resource for learning about this is Nolo Press
(www.nolo.com) - they have a bunch of self-help legal books about estate
planning and I think they just updated the title on living trusts. Even
if you go to an attorney to get the work done these are good for
understanding what to ask for and being efficient with the lawyer's time.

-Tad

True.

"kastnna" <kastnna[at]auburnalum.org> wrote
- quote -

To be a tad more reflective of the archives, I think this
should read "anti-deferred annuity" posters.

As I pointed out above you probably do not need a trust today, but may
very well need one in the coming future. When dealing with your
financial planning, it is best to head problems off before they arise.

There are many different kinds of trusts. Most all of them are
designed to place assets that would ordinarily be included in your
estate and transfer them to a separate entity (the trust) that will
not be subject to estate taxation at your death (because the trust
does not "die").

Irrevocable life insurance trusts are very common (ILITs). Life
insurance death benefits are not taxable as ordinary income tax, but
are includable in one's estate. You don't want a $1M policy pushing
your estate above the exemption limit. The ILIT owns the life
insurance policy. Your heirs are the beneficiaries of the trust, the
trust is the bene. of the policy, and you make annual gifts to the
trust (on behalf of the beneficiaries) with which the premium is paid.
Cash value accumuation is not a goal here. Look for guaranteed, low
cash building, universal life products in ILITs.

Credit remainder unitrust (CRUTs), Credit remainder annuity trusts
(CRATs), and Net Income with Makeup CRTs (NIMCRUTs) are very efficient
ways to provide heirs with income and still donate to a charity.
Charitable giving must be a primary goal or these vehicles are not for
you.

***side note to anti-annuity posters: NIMCRUTs are perhaps the most
flexible and efficient vehicle out there to provide heir income AND
donate to a charity. Funding NIMCRUTs with deferred annuities provide
more fexibility and control to the grantor than any other method I
have heard of.***

One of the biggest drawbacks to trusts is control of assets. If an
asset of your is gifted to a trust, but you still retain control of
that asset like it was your own, the IRS will consider the asset to be
yours and includable in your estate. Assets must be free of "instances
of ownership". As a result some assets are not easily placed in trust
while you are living (ie your residence). Qualfied Personal Residence
Trusts (QPRTs) can handle this problem however.

There are a number of "revocable" or living trusts that allow you
control over the assets, but at some time in the future (usually your
death) are passed into an irrevocable trust, thus avoiding probate.
The assets are still subject to estate taxation however.

QTIP trusts allow assets that were not subject to the marital
deduction be postponed for taxation purposes until the spouse passes
away. This basically allows your wife to defer estate taxes to your
heirs at her death.

Thats a good start and I'm getting to lengthy here. I'm sure I
overlooked or poorly explained something. Go talk to a CFP and/or
lawyer. Good luck!

Actually, you are in the clear TO DATE. Assuming you didn't already
have a trust, at your death your estate passes entirely to your spouse
without taxation under the "unlimited marital deduction."

When your spouse dies your heirs calculate the total estate subject to
taxation and then deduct whatever "federal estate tax exemption" is in
place at that time. At this time it is $2M, it will go to $3.5M in
2009 and the estate tax is completely repealed in 2010. However, hell-
bound snowballs have a higher likelyhood of survival. Bottom line is
that as long as your estate is less than or equal to the exemption
amount, your heirs will owe no estate taxes. Any amount over that is
taxable up to 45%.

Keep in mind that it is very easy to appreciate $1.2M to a number well
over the current exemption amount. Even moderate growth over the next
20 years (I don't know your age) could result in your having $4 - $7
million. We also have no solid idea of what the soon-coming changes to
the estate tax laws will precipitate.