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Re: How to set up a trust

I have been reading about setting up a trust so that after death (wife & I), assets go into a trust for the benefit of (adult) child. This is primarily for asset protection. I assume the trust after death must be an irrevocable trust... Even if you make it revocable, if after you die you revoke...
by bsteiner
Thu Jul 24, 2014 11:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to set up a trust
Replies: 11
Views: 1621

Re: Help! Term Life through an Irrevocable Life Insurance Tr

bsteiner wrote: There's virtually nothing to administer while the insured is living. Can you go into a little more detail about this? I fired my lawyer and ended my trust because my lawyer's annual fees for administering the trust kept creeping up. And no, I don't believe he ever really reviewed th...
by bsteiner
Thu Jul 24, 2014 4:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 10
Views: 472

Re: Estate Trustee requests I "waive presentation of account

Most estates and trusts are settled informally, by receipt and release (waiver). The executor or trustee gives the beneficiaries sufficient information to satisfy the beneficiaries, and the beneficiaries sign receipts and releases (waivers). This avoids the expense of a formal accounting. Sometimes ...
by bsteiner
Thu Jul 24, 2014 3:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Estate Trustee requests I "waive presentation of accounting"
Replies: 10
Views: 1079

Re: How does gift/estate tax indexation work?

The lifetime exemption for the gift/estate tax is now $10.68 million (for a couple) and is indexed to inflation. I am not sure how this works. Suppose that, while living, a couple funds a trust for their descendants with $10.68 million and thus fully uses up their lifetime exemption. Then some year...
by bsteiner
Thu Jul 24, 2014 3:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: How does gift/estate tax indexation work?
Replies: 6
Views: 334

Re: Help! Term Life through an Irrevocable Life Insurance Tr

The insurance trust isn't as important now that the Federal exempt amount is $5,340,000 (indexed), and portabilty has been made permanent. If the estate is taxable (greater than $10.68MM) is an ILIT a good option? Is there a better estate tax avoidance strategy? He said he's 37, and that they don't...
by bsteiner
Thu Jul 24, 2014 2:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 10
Views: 472

Re: Help! Term Life through an Irrevocable Life Insurance Tr

The insurance trust isn't as important now that the Federal exempt amount is $5,340,000 (indexed), and portabilty has been made permanent. If you die young, the insurance will replace the income you would have earned, and it's less likely that your spouse will have a taxable estate. Nevertheless, so...
by bsteiner
Thu Jul 24, 2014 1:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 10
Views: 472

Re: Inheritance taxes for beneficiary

By way of background for those not familiar with New Jersey, New Jersey has an inheritance tax, with rates of 15% to 16% on transfers to unrelated persons. If he were to leave his assets to you (in his Will) in trust rather than outright (which he might want to do and you might want him to do in any...
by bsteiner
Wed Jul 23, 2014 7:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance taxes for beneficiary
Replies: 3
Views: 457

Re: Intimidated by Trustee and Investment Advisor

As others have pointed out, as to any accounts already in your name (which would presumably be the ones under your social security number), you can move those accounts to another financial institution of your choice, and you can invest them any way you want. The trustees have to account to you for w...
by bsteiner
Wed Jul 23, 2014 6:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Intimidated by Trustee and Investment Advisor
Replies: 32
Views: 3710

Re: How to set up a trust

How do I set up a trust so that (after death), when my child inherits the assets: a. assets remain in a trust, protected from lawsuits, bankruptcy, claims in divorce b. I would assume child would get dividends and interest from the trust, to minimize trust taxes c. minimum expenses (it would pain m...
by bsteiner
Tue Jul 22, 2014 6:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to set up a trust
Replies: 11
Views: 1621

Re: Establishing a dementia trust

If all you want is someone to take over when needed, you don't need a trust. A power of attorney is sufficient. If you trust the agent, the power of attorney can be effective immediately, so you don't need any doctor certifications. If you want to protect against someone swindling you, you can creat...
by bsteiner
Tue Jul 22, 2014 3:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Establishing a dementia trust
Replies: 8
Views: 785

Re: Spouse to assume or inherit IRA?

...LadyGeek, in a PM explained to me that these terms, assume and inherit, are not IRS terms. Looking at Pub. 590 I believe this to be true: (quotes from http://www.irs.gov/pub/irs-prior/p590--2013.pdf , pages 18 and 21) assume the same as "rolling it over into your own IRA"? inherit the ...
by bsteiner
Mon Jul 21, 2014 10:46 am
 
Forum: Investing - Help with Personal Investments
Topic: Spouse to assume or inherit IRA?
Replies: 10
Views: 1366

Re: RMDs on Vanguard Inherited IRA

...Does this darned table change periodically so that it might actually change next year? The tables will probably change from time to time as life expectancies increase. However, since the increase in life expectancy is slow and gradual, they won't change very often. Since the tables haven't chang...
by bsteiner
Sat Jul 19, 2014 9:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: RMDs on Vanguard Inherited IRA
Replies: 21
Views: 1075

Re: Corporate inversions and TSM

The shareholders may have gain under Section 367 in any event: http://www.martindale.com/corporate-law ... 134206.htm.
by bsteiner
Fri Jul 18, 2014 11:48 am
 
Forum: Investing - Theory, News & General
Topic: Corporate inversions and TSM
Replies: 3
Views: 377

Re: 15 year mortgage or a 30 year & Invest?

How do 15-year and 30-year compare to adjustable rate?
by bsteiner
Fri Jul 18, 2014 11:45 am
 
Forum: Personal Finance (Not Investing)
Topic: 15 year mortgage or a 30 year & Invest?
Replies: 34
Views: 3551

Re: Is this a Vanguard quirk? [Adding beneficiaries to accou

I believe that beneficiary designations avoid probate, while passing an estate by will does not. So this policy could cost both time and money. Another problem is that beneficiary updates are often not timely and might not be updated before the second death. That might happen more often than simult...
by bsteiner
Wed Jul 16, 2014 8:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is this a Vanguard quirk? [Adding beneficiaries to account]
Replies: 20
Views: 2313

Re: Inherited a promissory note--what to do?

...There is nothing quick about probating an estate, at least in Pennsylvania where I'm in the middle of settling my Mom's. One of the required steps in probating an estate is to advertise the fact in two local newspapers; this starts a one-year timeout for all claims against the estate. If the exe...
by bsteiner
Wed Jul 16, 2014 6:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inherited a promissory note--what to do?
Replies: 22
Views: 2413

Re: Another reason I am my own advisor

...Since turning 55, I have noticed a big spike in the number of dinner invitations I receive from brokers and insurance agencies for presentations meant to scare retirees into turning over their 401ks to the sponsor of the seminar. ... If you go to the free dinner seminar, and you're the one who b...
by bsteiner
Wed Jul 16, 2014 9:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Another reason I am my own advisor
Replies: 15
Views: 3726

Re: Any benefits of a low cost Vanguard Annuity?

You've described the tradeoff. The annuity provides deferral, but you incur additional expenses and your investment income and gains become ordinary income, with no basis step-up at death. You might run some numbers, making some reasonable assumptions as to investment returns and taxes. Another choi...
by bsteiner
Tue Jul 15, 2014 9:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Any benefits of a low cost Vanguard Annuity?
Replies: 3
Views: 612

Re: Placement/Title of Assets between husband and wife trust

There are reasons to create revocable trusts in some cases. However, the Federal estate tax is not one of them. Revocable trusts do not save (or cost) any estate taxes. You can include in a revocable trust the same dispositive provisions that you would otherwise include in a Will, or vice versa. Bef...
by bsteiner
Mon Jul 14, 2014 5:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Placement/Title of Assets between husband and wife trusts
Replies: 1
Views: 404

Re: Estate planning book?

This is a routine matter. He can leave his estate to her in trust, with one or more of his children (or whomever he wants) as trustee(s).
by bsteiner
Mon Jul 14, 2014 9:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Estate planning book?
Replies: 12
Views: 1242

Re: Generational estate planning

The trust isn't "officially in [your] name." It's a trust for the benefit of you and your issue (descendants) that you'll effectively control. Like the old Ivory soap commercials that said that Ivory soap was 99 and 44/100% pure, you can have 99 and 44/100% control, without the trust being...
by bsteiner
Sun Jul 13, 2014 6:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Generational estate planning
Replies: 3
Views: 761

Re: Generational estate planning

They could leave their estates in trust for you. That way, it won't be included in your estate, but you'll be able to control it. You can be a trustee. You can have the power to remove and replace your co-trustee (or you can be the sole trustee until you need a distribution, at which time you can ad...
by bsteiner
Sun Jul 13, 2014 11:05 am
 
Forum: Personal Finance (Not Investing)
Topic: Generational estate planning
Replies: 3
Views: 761

Re: Elderly Parents - Putting Home into Life Estate?

Thank you very much, bsteiner ... if it were your parents in this situation, what would you do in order to act in their best interests? ... That's a hard question since I don't know your in-laws, and since their assets are at a level where different people might make different choices. A forum such...
by bsteiner
Sat Jul 12, 2014 9:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Elderly Parents - Putting Home into Life Estate?
Replies: 13
Views: 1485

Re: How to Handle a Multi-Generational Trust

...Size of Portfolio: approx. $11,000,000.00 by Christmas. Could be substantially more depending on my negotiating skills. ... 3. All the assets described, plus the house will be put in a living trust in the first quarter 2015. 4. The trust will be generation skipping. 5. My son will be able to rec...
by bsteiner
Thu Jul 10, 2014 6:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to Handle a Multi-Generational Trust
Replies: 23
Views: 2696

Re: Must-haves and Legal Needs for a Millionaire

Here's my top three at this time. 1. Get a trust. 2. Adequate life insurance for both of you. Think worst case scenario. New baby and spouse passes away. You stay at home to raise the child or pay for a nanny. I suggest a million on both you and your wife. 3. Umbrella policy to protect your assets....
by bsteiner
Thu Jul 10, 2014 3:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Must-haves and Legal Needs for a Millionaire
Replies: 14
Views: 3882

Re: Future plan with recent lung cancer diagnosis

...make sure everything is in POD, TOD, has beneficiaries setup to keep as much out of probate as possible. ... While it makes sense to name beneficiaries for certain items such as life insurance (for creditor protection) and retirement benefits (for both the stretch and for creditor protection), P...
by bsteiner
Tue Jul 08, 2014 11:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Future plan with recent lung cancer diagnosis
Replies: 25
Views: 3809

Re: When my IRA beneficiary dies….

You can leave the IRA to her in trust, with remainder to charity. In general, if a charity is a beneficiary, the stretch will be limited to 5 years (or the IRA owner's life expectancy as if he/she hadn't died, if the IRA owner had reached his/her required beginning date). There are two ways to get a...
by bsteiner
Tue Jul 08, 2014 9:31 am
 
Forum: Investing - Help with Personal Investments
Topic: When my IRA beneficiary dies….
Replies: 7
Views: 913

Re: Elderly Parents - Putting Home into Life Estate?

... For MA purposes, there are four types of life estates: A revocable life estate (also known as life estate with full or partial powers) in which the applicant, the recipient, the applicant’s spouse or the recipient’s spouse is the grantor of the property and is deeding or granting ownership to a...
by bsteiner
Sun Jul 06, 2014 5:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Elderly Parents - Putting Home into Life Estate?
Replies: 13
Views: 1485

Re: Elderly Parents - Putting Home into Life Estate?

... Not exactly. In PA we don't consider trusts protection from Medicaid for long term care...only certain trusts, called special needs trusts for adult (or minor) children with disabilities.... Their retained income interest won't be protected. This is acceptable to people who do this. ...Somethin...
by bsteiner
Sun Jul 06, 2014 12:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Elderly Parents - Putting Home into Life Estate?
Replies: 13
Views: 1485

Re: Elderly Parents - Putting Home into Life Estate?

Advantages according to the attorney: 1. Simplicity and Low Cost to Establish 2. Avoids Probate 3. Simplicity of Clearing title to Real Estate 4. Life Tenant's Right to Occupancy is Protected Regardless of Debts or Actions of Remainder Owners 5. Income Tax Advantage to Heirs upon Death of Life Tena...
by bsteiner
Sat Jul 05, 2014 10:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Elderly Parents - Putting Home into Life Estate?
Replies: 13
Views: 1485

Re: Elderly Parents - Putting Home into Life Estate?

It's a common Medicaid planning technique, to protect the remainder interest in the house (or any other assets that they give away but retain an income interest). We would need to know more about their assets and income, and their objectives, to know whether this is likely to make sense in their par...
by bsteiner
Sat Jul 05, 2014 9:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Elderly Parents - Putting Home into Life Estate?
Replies: 13
Views: 1485

Re: Blog: Vanguard Personal Advisor Services

Will VPAS be useable with a trust, or otherwise lower the management fees to use Vanguard trust services? If Vanguard is a trustee, they have other duties and responsibilities besides managing the assets. Trustees have to decide on discretionary distributions, keep records, and file fiduciary incom...
by bsteiner
Fri Jul 04, 2014 7:48 pm
 
Forum: Investing - Theory, News & General
Topic: Blog: Vanguard Personal Advisor Services
Replies: 33
Views: 7167

Re: Longevity Insurance now allowed in IRA/401k/etc.

All I want to know is whether there is / will be a low-fees way to purchase a longevity insurance policy? Anything that's larded by a big sales commission isn't worth it, but a reasonably actuarially-fair policy would be nice for us both in terms of lowering taxes on RMDs and in terms of the basic ...
by bsteiner
Fri Jul 04, 2014 10:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4770

Re: Longevity Insurance now allowed in IRA/401k/etc.

Oblivious investor wrote: Also, QLACs (new acronym, woohoo!) at least this may resolve the dilemma of what to call these things: longevity insurance? DIAs (deferred income annuities)? For tax and retirement account purposes they are clearly "longevity annuities" (qualifying longevity annu...
by bsteiner
Thu Jul 03, 2014 9:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4770

Re: Using a variable annuity to pre-fund an SPIA

...The best way to learn about annuities is NOT from sales people peddling them with "free" dinners... If you go to the free dinner seminar, and you're the one who buys the annuity, the living trust, the timeshare, or the bridge, not only did you pay for your free dinner, but you paid for...
by bsteiner
Tue Jul 01, 2014 11:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using a variable annuity to pre-fund an SPIA
Replies: 30
Views: 1346

Re: beneficiary form trumps will

This article may be of interest. I know Melanie Leslie, one of the authors. This is an excellent article. She discusses Smith v. Marez, the 2011 case that we've been discussing (since there was a recent news story on it), as well as other cases. Here is another link: http://www.nyulawreview.org/sit...
by bsteiner
Sun Jun 29, 2014 7:15 am
 
Forum: Personal Finance (Not Investing)
Topic: beneficiary form trumps will
Replies: 54
Views: 4078

Re: beneficiary form trumps will

That's correct but why would you think anything different as the whole point of beneficiaries and TOD/POD is keep assets from going through probate and if there's no probate on the item then how could the will possibly have any effect? While TOD and POD can be useful in small estates, or for small ...
by bsteiner
Sat Jun 28, 2014 10:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: beneficiary form trumps will
Replies: 54
Views: 4078

Re: His vs Hers retirement fund

My spouse is a green card holder. Where might I get more information on the unlimited marital deduction and qualified domestic trusts? If your spouse is not a U.S. citizen, then in order to get the estate tax marital deduction, you have to provide for your spouse in a qualified domestic trust (QDOT...
by bsteiner
Fri Jun 27, 2014 3:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: His vs Hers retirement fund
Replies: 12
Views: 1603

Re: Non Spouse Plan Beneficiary Challenges Ahead

...Protection of a trust may be limited in some states if distribution can be seized by a creditor after payment to beneficiary. ... very few inherited IRAs contain enough assets to be worth the cost of drafting a trust and preparing annual tax returns. So long as the beneficaries don't need the mo...
by bsteiner
Fri Jun 27, 2014 2:11 pm
 
Forum: Investing - Theory, News & General
Topic: Non Spouse Plan Beneficiary Challenges Ahead
Replies: 4
Views: 654

Re: SPIA-Roth IRA or Traditional

One of the benefits of the Roth is that there are no required distributions after age 70 1/2.

Is it possible for a Roth IRA to buy an annuity and retain the annuity payments rather than having to distribute them, so as to take advantage of there being no required distributions during lifetime?
by bsteiner
Thu Jun 26, 2014 9:21 pm
 
Forum: Investing - Theory, News & General
Topic: SPIA-Roth IRA or Traditional
Replies: 7
Views: 359

Re: Non Spouse Plan Beneficiary Challenges Ahead

I greatly respect Michael Kitces. However, I have a different take on this. Some states protect inherited IRAs. If creditor protection is a concern, you can leave your IRA (as well as your other assets) to your children in separate trusts for their benefit rather than outright. Our clients almost al...
by bsteiner
Thu Jun 26, 2014 9:19 pm
 
Forum: Investing - Theory, News & General
Topic: Non Spouse Plan Beneficiary Challenges Ahead
Replies: 4
Views: 654

Re: Help confirm my thoughts regarding solo 401k

As you know for a salary of $135,000 the limits differ based on the form of your business entity. limits for a sole proprietor 42687.65 total -17500 = 25187.65 Profit sharing limits for an S or C corp 51250 total -17500 = 33750 Profit sharing I am not an accountant but I believe you would have to s...
by bsteiner
Thu Jun 26, 2014 11:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Help confirm my thoughts regarding solo 401k
Replies: 9
Views: 405

Re: Long-Term Care Insurance? Is it a good idea?

I don't know how to evaluate whether the price of this insurance is fair, but if it's a competitive market I would guess that the price is fair, taking into account the insurance company's expenses and a reasonable profit margin. However, you would have the risks that: 1. You end up sufficiently wel...
by bsteiner
Tue Jun 24, 2014 2:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care Insurance? Is it a good idea?
Replies: 24
Views: 1831

Re: "Having the wealth transfer conversation"

You might want to provide (in your Will) for your children to receive their shares in separate trusts rather than outright.... The cost isn't much more than the cost of doing a Will in which they receive their shares outright. Can you please explain this? I thought I've read over and over that the ...
by bsteiner
Mon Jun 23, 2014 10:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: "Having the wealth transfer conversation"
Replies: 21
Views: 2979

Re: Need intro resource on Roth conversions and RMDs

Here's an article I wrote for the April 2013 issue of Trusts & Estates on the benefits of the Roth conversion: http://www.kkwc.com/library_cat/uf_Roth ... r_ATRA.pdf .
by bsteiner
Mon Jun 23, 2014 10:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need intro resource on Roth conversions and RMDs
Replies: 2
Views: 208

Re: "Having the wealth transfer conversation"

I have not had the discussion with my children for a different reason; One adult child is the antithesis of a Boglehead. When he inherits, he will consider it his mission to blow through his inheritance as wastefully as possible The second is the opposite. He's a saver but not an investor. I've tol...
by bsteiner
Mon Jun 23, 2014 4:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: "Having the wealth transfer conversation"
Replies: 21
Views: 2979

Re: Took 2 RMDs by mistake and can't cancel the transaction

If your friend is the IRA owner (and not a beneficiary of an inherited IRA), she can put it back within 60 days if she hasn't done a rollover within the preceding 12 months. Caution: in Alvan Bobrow , http://www.ustaxcourt.gov/InOpHistoric/BobrowMemo.Nega.TCM.WPD.pdf, the Tax Court said that the one...
by bsteiner
Mon Jun 23, 2014 12:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Took 2 RMDs by mistake and can't cancel the transaction
Replies: 36
Views: 1915

Re: New Investor - Atypical Situation

...In general, if your tax rate is the same in retirement as during your work career, the 401k and the ROTH 401k are a wash. If your tax rate is lower in retirement than during your working career (this is true for many people), the Traditional 401k wins. If your tax rate in retirement is higher th...
by bsteiner
Sun Jun 22, 2014 6:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: New Investor - Atypical Situation
Replies: 25
Views: 1962

Re: Living trust vs will

Revocable trusts are appropriate in some cases, and in some states. They're common in California for reasons specific to California. . What are those reasons specific to CA? CA has a large customary fee to probate a will - 2-4% on the first 800k - and the entire value of your house counts, IIRC. ht...
by bsteiner
Thu Jun 19, 2014 10:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Living trust vs will
Replies: 26
Views: 2494
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