Anyone know anything about trusts?

sue36October 5, 2006

My father wants to put his house in some type of a trust. The objectives are to protect it in case he needs to go into a nursing home someday (I think that requires 5 years in a trust now?) and to make sure it goes to my sister and I if he remarries (he doesn't mention this, but I know he is thinking it).

We are going to hire an attorney to do this, I just want to make sure I go in there educated. For example, I know the house needs to be re-titled once the trust is created.

He is willing to do an irrevocable trust if necessary.

Also, does anyone know if a public pension can have its payments put into a trust an then distributed by a trustee? He receives a good pension as well.

Thanks for any help.

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I have a book on trusts at home that is very helpful. My parents put almost all of their assets into a trust and it made handling the estate really, really simple. I'll see if I can find the title when I get home this PM.

    Bookmark   October 5, 2006 at 12:27PM
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Thanks aphilla, that would be great.

    Bookmark   October 5, 2006 at 12:34PM
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I wasn't able to put my hand on it, so had to search amazon. This is the one, and sorry for the link over to Amazon. I don't know whether there is info about private pensions.

    Bookmark   October 6, 2006 at 10:23AM
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My father-in-law put his house in trust for his two sons and it was a disaster. I knew from the beginning it wouldn't work because he is such an independent person. The state sent the property tax bill to our house and I paid it and then asked to be reimbursed. My f-I-L blew a gasket, not because I wanted to be reimbursed but because I had no business seeing much less paying his bill. He called my husband every name in the book and accused us of trying to take over his life. My husband and his brother had to sign the property back over to their dad. Hopefully your dad isn't such a control freak. My father-in-law got nothing but bad feelings and an attorney's bill out of the deal. I was very glad to see the trust broken because I think it is unethical to try and avoid paying for a nursing home so long as there are assets. I don't know where the sense of entitlement comes from that despite what we cost the government our money should be kept for our children. If you and your dad want to conserve his money then he should live with you rather than go to a nursing home.

My neighbor is basking in the delight of her new summer home that she bought as part of the proceeds of her mother's estate. Her mother lived off the state for years before she died. I just don't get it.

Why do you want your dad's pension checks to go into a trust? Is he no longer competent? When this happened to my mother we got her to give my brother power of attorney and that worked very well.

I think your dad can put together a trust from the money he already has, but I don't think you can or should shield current income as a way of not paying for a nursing home

    Bookmark   October 6, 2006 at 1:18PM
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Perhaps part of the concern is whether he should remarry.

Recently a friend, whose husband had been dead about a year and who was quite lonely, formed a friendship with someone with few assets (and a few bricks short of a load, mentally, due mostly to earlier illness, I gather).

Some of her family, and I, warned her that, should he move in with her, and stay for a year, if he left and she couldn't prove that he was merely a boarder ...

... he could take half of her assets.

Which aren't all that great, but she has a home and several acres in the country near a city, so will be worth something - which she needs to sell, currently, as she doesn't have adequate income.

And she needs that money to live on.

I am concerned that she may run out of money before she runs out of life.

Not a pleasant experience, I've found as I've viewedd it in people around me.

ole joyful

    Bookmark   October 6, 2006 at 3:50PM
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My father-in-law has a live-in girlfriend. They are careful about keeping their finances separate, and that should suffice even though they live in a community property state. The laws about meritricious relationships in Canada must be stricter than ours

    Bookmark   October 6, 2006 at 5:42PM
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My mother's home is in a trust (I'm too lazy to drag out the paperwork; revocable trust? I can't remember). She, my brother, and I are all equal holders, but a sale gives her "dibs". The property may not be sold before her death unless the proceeds of the sale are surrendered and directed to her long-term health care/maintenance. After her death the real estate passes to my brother and me, with no tax consequences. But neither can the state seize her real estate and demand its sale to fund long-term care costs. When her liquid assets run out, that's it. But when her liquid assets run out and are no longer sufficient to pay the maintenance costs/taxes on the property we will have to pay for them. Both my brother and I are in a position to do that and the forced sale of the property will be unlikely in our scenario.

This sort of question is a job for an attorney skilled in estate law/elder law. Laws regarding the latter are becoming more stringent with every passing year... precisely in line with the looming SS/Medicare/Medicaid crisis and the appalling national debt. My advice is to hire an attorney well versed in elder law. Don't "cheap out" or "jack ass around"... you don't have a lot of time to squander. "Look back" laws change frequently; get in on the "grandfather" clause that is included when changes are made. And inform yourselves! make sure your legislators know how you feel about those changes, or at least request that you be notified when such changes are brought before the government!

Trust me on this.

    Bookmark   October 6, 2006 at 6:08PM
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You should go to a lawyer specializing in trust. He/she will lay everything out and then you can review and deceide what to do. Every state has its own rules and regs. Also state income and IRS come into it. Get everything in writing and make a list--what if- and review it with your lawyer. Living trust etc all are different. Please for everyones own protection get good professional advice to protect all.

    Bookmark   October 6, 2006 at 6:11PM
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A revocable trust should be fine. Just be sure to fund it! (Put the title in the trust name.) Once your dad is gone, having a trust makes it so much easier than probate. The trust then becomes irrevocable and the trustees manage it. It can be useful, too, to have the trust as a "separate identity" holding title to property. It can be a big tax savings, although the trust has to file taxes every year, so there is additional accountant work.

    Bookmark   October 7, 2006 at 5:53PM
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"I don't know where the sense of entitlement comes from that despite what we cost the government our money should be kept for our children."

Devorah - Why should my family lose the money I earned AND paid taxes on all my life? Why is the govt more entitled than my own family? What have I "cost" the govt that I have not already paid? For some families that legacy may be all that is standing between them and homelessness.

    Bookmark   October 9, 2006 at 5:11PM
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I'm not following your logic. The state should pay for the needs of the elderly so their children can inherit more? Should the state pay for your dad's groceries, clothing, housing expenses too so that he can leave you a nice nest egg?

Now I agree that a catastrophic illness should not bankrupt the surviving spouse and I am glad that there are protections in place to prevent that, but I thought children were pretty much expected to make their own way in the world and that while inheriting something is nice, it should never be counted on or form the basis of a financial plan because the person whose money it is may use it up in his or her lifetime. My parents died in their beds and so I was left 30k, but my financial well being didn't depend on it.

I do understand that it feels very unfair when parents like mine and probably yours as well, scrimp and save and wind up in a ward next to a person who has partied their whole life. I don't have a solution for that unfairness. I do know that my parents would have been mortified to be unable to pay their own expenses. They regarded taking public money as indicative of failure and they would much rather have paid their medical bills than leave money to me.

    Bookmark   October 10, 2006 at 2:04PM
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Why should those of us smart enough to use existing laws to our advantage feel "guilty" for shielding assets? Isn't that precisely what the Kennedys, the Bushes, and many other terrifically wealthy families have done for years? for heaven's sake! why is it considered "smart" when the wealthy do it but "sleazy" when the rest of us "wise up"?

Mum has lived with me for 3 years now. I change her urostomy twice weekly. I schedule all her medical appointments, haircuts/manicures, I buy all her clothes... I do EVERYTHING for her. I live my life on a 4 hr. "leash"; if it takes more than 4 hrs. I have to hire a babysitter. I KNOW how much work is entailed (your reply D., leads me to believe you don't); the toll it takes on your "free" time and your privacy is staggering. Placing her home in trust will be small compensation for the time I've invested in her care.

Look at it this way: at 80K/yr. (that's what it costs) I've already "bought" her home and nearly wiped out all that she inherited when my father died. And she isn't even in a nursing home yet... if the wait list is long, it could be over a year. She doesn't know I'm her daughter anymore. She can't bathe alone, prepare a meal, remember her medications.

I'm livin' it. I KNOW.

    Bookmark   October 10, 2006 at 7:41PM
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I think I am just not communicating well. I do know exactly how much work it is to care for a parent who can no longer take care of himself or herself. I have all the sympathy in the world for the caregivers. I think it is the toughest job on earth. We were lucky that my in-laws had enough money to care for my mother-in-law in a nursing home when it became too difficult at home. I was absolutely aware how lucky we were and I didn't mind one bit that her care was eating up any inheritance we might have received. Taking care of your mother in the condition she is in makes you a saint and I salute you for it - but I am still not sure how that relates to paying for a nursing home.

I don't personally want to be catagorized with the Bushes or the Kennedys. I think they are slime, not smart when they slip around on their taxes. I don't honor them for that.

    Bookmark   October 10, 2006 at 8:38PM
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I'm already sorry for what I wrote. I had no business being so self rightious when you are having such a hard time. Please accept my apology.

    Bookmark   October 10, 2006 at 9:32PM
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D., don't worry about it! I know this is a tough topic to discuss and I know the whole topic of protecting assets from the auction block is often fraught with the presumption of greed, selfishness, and entitlement. I've been reading your posts for some time now and know you aren't unreasonable. Truthfully? my parents wanted us to have the house, but were too ignorant/trusting that they couuld transfer it to us at the very end. You can't do that, any more; you have to PLAN the transfer years in advance or they will be quickly appropriated to fund LTC.

Our case is no different from most families. There are liquid assets and there is real estate. We have protected the real estate, and the liquid assets are still largely intact minus a few permitted "gifts". My mother has been with me for 3 years now, at no cost to her. The idea behind our calculated decisions is that there will be sufficient funds to move her into long term care for a few years. Statistically, the person dies within a year/two of entering LTC. This was what the elder law attorney advised.

I used to feel sort of "guilty" about the way we've set things up, but now I don't. We've used every legal means at our disposal to preserve some of what my parents stated time and again they wanted to leave to us, but were too ignorant to isolate and protect. And I understand completely that there are plenty of families that "skim the cream" and hustle the infirm family member off to the home and onto the public dole. That bothers me, too. Realistically, though, with the looming SS and Medicare/Medicaid crisis there will no safety net for the likes of me, even though I've paid more in taxes to fund Mum's benefits than she or my father ever paid in to the system. I will do my level best to parlay whatever I'm fortunate enough to inherit into long term, long range investments to buffer my own old age and inevitable infirmity.

My 3 years of devoted care for my mother deserve to be compensated, too. Frankly, I'd rather inherit the real estate tax-free than be paid, moved into a higher tax bracket, and have to pay taxes on the earnings every year! I'm willing to wait for my compensation, no nursing home would accept that sort of arrangement.

    Bookmark   October 11, 2006 at 7:37AM
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devorah & chelone, I understand what both of you are saying and agree with both. The goverment does not pay in full in nursing homes which leaves them understaffed. Then people complain about the care in nsg homes. I do believe if someone goes into a nsg home and have assests they should pay. Chelone, you are taking care of your mom at home and that is definately not the same as hiding/ assets even if the law allows it. I really find it difficult to understand people wanting to go on state aid.

    Bookmark   October 11, 2006 at 2:12PM
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Chemocurl zn5b/6a Indiana

Well, I just hope if I ever go into a nursing home, that I can fund it for the remainder of my life, and pick a nicer one, with a private room.

I didn't work and save all my life just to give it away once I pass on. Very little was ever handed to me. and I learned early on, that if I wanted something I was going to have to work for it.

A friend received about 30K when her mom passed away and the house was sole and money split up. She had it all squandered within a year, and all she had to show was a a used car (now has been wrecked twice) and she paid some on daughters education.

Leaving folks money. or property when one dies is not always a good thing...would oftentimes be better left to charity, IMHO.

    Bookmark   October 11, 2006 at 2:53PM
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Devorah - I know exactly what you are saying and I don't think you mean to criticize anyone like chelone who is taking responsibility for caring for an aging parent.

I know this thread has taken an off topic turn but it is so close to home I had to comment. I'm talking about protecting assets so an elderly persons nursing home care can be funded by the government (aka taxpayers) instead of the person/family taking responsibility for paying for that care with the persons assets.

We have this situation going on in my inlaws family. My FIL died in his mid-80's - he was an attorney who did alot of estate planning work and continued to work part time up until his death. My MIL had been in a nursing home for several years prior to his death - and remains there today. He did not gift maximum sums of cash to his children to avoid $$ going to nursing home care. He also did not setup his estate to go to his children. He left it first to pay for his wife's care - then if anything is left it will go to his children (none of whom are in financial need). This is not entirely surprising to me for a WWII veteran who also saw part of the depression. These folks seem to have more of a sense of personal accountability and of course preferring not to be "on the dole".

Well, you should see the greed and infighting that surfaced with some of DHs siblings - trying to figure out how they could use their power of attorney to start gifting money to themselves and their children.
I can understand using every legal means to minimize tax liabilities. However I can't understand doing so in order to allow taxpayers to pay for a parent's nursing home care if one's parents have the means to pay for their own care.

DH is co-executor and his effort to manage the estate consistent with his father's wishes has not been a popular position. His father always said wills/estates bring out a side of people you never knew existed and DH is now experiencing that firsthand. The greed is amazing.......

    Bookmark   October 13, 2006 at 6:56PM
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