Setting up Trust for Elderly Parent?

snikcillaFebruary 6, 2009


My father is 85 and in an assisted living facility. I am his POA. All of his money is in standard investments, etc.

When he passes away, all of his money will be subject to the hefty estate tax.

Can I set up a "trust" of some kind for him, that would eliminate some of this tax?

(I visit with an elderly woman and her POA / daughter has checks that say "elderly woman's name Trust" on them, that the daughter uses to pay for various things for the mom.)

When my dad passes away, we need money to go to his children (not his grandchildren or charity, etc.)

Could a "work" in this situation?

Thank you.

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You should get an Attorney. We had a trust set up and a living will, it's need a lawyer. JMHO.

    Bookmark   February 6, 2009 at 6:32PM
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I second the advise to go to an attorney. It sounds like you have several issues, not just one (setting up a trust). Try to find one that specializes in eldercare and trusts.

Good luck.

    Bookmark   February 6, 2009 at 7:47PM
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I third the suggestion of a competent, experienced eldercare attorney, AND tax advisor. This is an extremely tricky problem and the IRS has seen a lot of people in your situation, so tax planning should have been started well before this to avoid 'look-back'.

Because the political football that is the estate tax is still being juggled around, your comment about your father's entire estate being subject to estate taxes surprises me. As things stand now, if he dies in 2010 there is no federal tax due at all. But maybe I've missed something on the news lately, I haven't been paying close attention the past couple of weeks. Anyway, do find a good tax advisor and estate attorney for some serious consultations. Good luck!

    Bookmark   February 6, 2009 at 11:19PM
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A trust will not eliminate any estate tax but sometimes it can help minimize it. You cannot set up a trust for you father but you can help him with getting an attorney and if your father wants you involved you can be very helpful in the planning especially if you are already handling his affairs. The attorney will need a lot of information to know what the trust should address and how it should be handled.

Be sure to get a certified estate attorney and a CPA who specializes in estate planning and tax issues. They are expensive but well worth the investment. If your father estate is less that 3.5 million for 2009 no federal estate tax will be due 2010 is still a free pass unless congress changes things. Our new president has been quoted as saying he will leave it alone until 2011 but the speaker of the house has said she wants it repealed now. If nothing else we may see who wears the pants in this administration. LOL State estate tax can be quite different from state to state so that may be an issue also.

    Bookmark   February 7, 2009 at 12:30AM
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