Please Help with Estate Planning

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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EMDW
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Please Help with Estate Planning

Post by EMDW » Wed Jan 22, 2014 3:29 pm

We have retirement accounts, a home that's paid off and a family LLC for taxable accounts. We have no heirs and no debts. Tax bracket is a little over 39%. Retirement in 20-25 years. Do we need a trust? Other asset protection plans? Thanks for your time.

Retread
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Re: Please Help with Estate Planning

Post by Retread » Wed Jan 22, 2014 3:37 pm

Anyone who responds is going to need far more information than you've provided. For example, you need to disclose your family situation, the nature and approximate value of your assets and how they are held and your testamentary wishes
Bruce
absit iniuria verbis

Topic Author
EMDW
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Re: Please Help with Estate Planning

Post by EMDW » Thu Jan 23, 2014 3:21 am

I posted the general question because a friend sent me this link from suze orman which implies that everyone needs a revocable living trust. http://www.bankrate.com/brm/news/Financ ... ?caret=73a

bsteiner
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Re: Please Help with Estate Planning

Post by bsteiner » Thu Jan 23, 2014 9:36 am

sari wrote:I posted the general question because a friend sent me this link from suze orman which implies that everyone needs a revocable living trust. ...
Some people do. Most people don't. You didn't provide any information that would suggest whether you might. For most people, the issue tends to be a distraction. In most cases, the dispositive provisions are more important.

Suze Orman is not a recognized authority in the trusts and estates bar.

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Eric
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Re: Please Help with Estate Planning

Post by Eric » Thu Jan 23, 2014 10:02 am

In my state, probate can be very simple (assuming a properly drafted will, harmonious family, etc.). I've seen people pay more for a funded revocable trust than they would have paid for a simple probate. And in many cases, the revocable trust does not actually succeed in avoiding probate.

Revocable trusts can still be useful in my state for other reasons, not involving probate costs. And they may be useful in other states (with more cumbersome probate systems) for probate avoidance. But they are heavily oversold -- the "everyone needs one" advice is very misleading.

pshonore
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Re: Please Help with Estate Planning

Post by pshonore » Thu Jan 23, 2014 10:05 am

sari wrote:We have retirement accounts, a home that's paid off and a family LLC for taxable accounts. We have no heirs and no debts. Tax bracket is a little over 39%. Retirement in 20-25 years. Do we need a trust? Other asset protection plans? Thanks for your time.
I think we'd like to hear about the benefits of "a family LLC for taxable accounts". Do you mean a Family Limited Partnership?

Retread
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Re: Please Help with Estate Planning

Post by Retread » Thu Jan 23, 2014 10:06 am

bsteiner wrote:Suze Orman is not a recognized authority in the trusts and estates bar.
Bruce, you're being too kind! I'm always shocked how she recommends a RLT for everyone. I cringe every time she calls it a "living revocable trust". She must be the only one in the world who calls it that.
Bruce
absit iniuria verbis

goblue100
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Re: Please Help with Estate Planning

Post by goblue100 » Thu Jan 23, 2014 10:26 am

I'm far from an expert in this area, but if you have no heirs you may not need a living trust. IRA's, 401k, bank and brokerage accounts do not go through probate if there is a named beneficiary or a transfer on death form. If there are significant assets, more than 5 mill, than you should consult professional assistance to make sure you don't go over the estate tax exclusion. One other thing to think about would be a medical power of attorney aggreements for each other. Who do you want to make medical decisions for you, in the event you cannot?
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

bsteiner
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Re: Please Help with Estate Planning

Post by bsteiner » Thu Jan 23, 2014 10:58 am

goblue100 wrote:...if you have no heirs you may not need a living trust. ...
It's often the opposite. I missed that.

Your heirs (the persons who would inherit absent a Will) may be interested parties, so you may have to establish the absence of any heirs. If your closest relatives are your cousins, it can sometimes be difficult to determine who they are, especially if there might be unknown cousins outside the United States. If that's the case, depending on the procedures in her home state, she might want to create a revocable trust.

Of course, if the original poster is married (which the use of the word "we" suggests), then she and her spouse would each be the other's heir, though the survivor of them might not have any heirs.

Topic Author
EMDW
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Re: Please Help with Estate Planning

Post by EMDW » Thu Jan 23, 2014 1:36 pm

pshonore wrote:
sari wrote:We have retirement accounts, a home that's paid off and a family LLC for taxable accounts. We have no heirs and no debts. Tax bracket is a little over 39%. Retirement in 20-25 years. Do we need a trust? Other asset protection plans? Thanks for your time.
I think we'd like to hear about the benefits of "a family LLC for taxable accounts". Do you mean a Family Limited Partnership?
I just checked the documents and it an LLC with our 2 last names infront of it. ie. John-Doe LLC. We are using this for taxable accounts/investments not in our individual retirement plans.

Topic Author
EMDW
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Re: Please Help with Estate Planning

Post by EMDW » Thu Jan 23, 2014 1:38 pm

bsteiner wrote:
goblue100 wrote:...if you have no heirs you may not need a living trust. ...
It's often the opposite. I missed that.

Your heirs (the persons who would inherit absent a Will) may be interested parties, so you may have to establish the absence of any heirs. If your closest relatives are your cousins, it can sometimes be difficult to determine who they are, especially if there might be unknown cousins outside the United States. If that's the case, depending on the procedures in her home state, she might want to create a revocable trust.

Of course, if the original poster is married (which the use of the word "we" suggests), then she and her spouse would each be the other's heir, though the survivor of them might not have any heirs.
Married. No children. Have brothers, sisters, nieces and nephews.

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