Durable Power of Attorney: Implementation Report

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Longruninvestor
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Re: Durable Power of Attorney: Implementation Report

Post by Longruninvestor » Wed Sep 12, 2018 3:42 pm

afan wrote:
Sun Sep 02, 2018 11:58 am

Sound like there were major problems with the trust itself. I have managed a trust for an elderly person, before and after death, with no hassles at all. The trust was a revocable living trust, so already established and funded before death. In the waning years I helped the person transfer assets to the living trust. No signature guarantees required. After death the only hassles were for things that had not made it into the trust.
There are no problems with the way my parent's trust was written. The situation you describe where a grantor dies will trigger the transition of the trust from from revocable to irrevocable and I suspect the process is easier. My mess involves the the death of a co-trustee (my father) and the transition of trust registered accounts from the deceased's social security number to the living co-trustee's (my mother). Procedures at brokerage houses for trusts are complicated, burdensome and take a long time to navigate, and the customer service personnel at those institutions are ill equipped to answer questions and service trust accounts. My father's death required new trust accounts and an asset transfer from the old accounts to the new, because brokerage firms have policies that say that a new social security number requires a new account. Lawyers at brokerage houses have also decided that new trust registrations and trust changes require paper forms, notary stamps or medallion guarantees all sent by US mail, and after receipt by those firms, lengthy review by their legal department. This process is taking months to run its course and so far there's been not a single objection to the trust documents. It would have been a simple flag being thrown at these firms for a death involving a joint tenancy - transfer on death account. My mother lives a long distance away from me and she's elderly and the process has been insanely hard. A number of years ago I was a personal representative for an estate and had to work things through probate and it was child's play compared to all the nonsense that I've to do with this trust since my dad died --and that estate involved a decedent that died intestate (without a will). Ally bank is the exception with trusts and perhaps things will get better in the future at other places. My informed opinion is that lawyers are grossly overselling the benefits of revocable living trusts. Caveat Emptor. Shakespeare was right about lawyers :?

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Steelersfan
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Re: Durable Power of Attorney: Implementation Report

Post by Steelersfan » Wed Sep 12, 2018 5:09 pm

Longruninvestor wrote:
Wed Sep 12, 2018 3:42 pm
My informed opinion is that lawyers are grossly overselling the benefits of revocable living trusts. Caveat Emptor. Shakespeare was right about lawyers :?
Bruce Steiner, perhaps our most knowledgeable poster on estate matters, has been saying that on this site for years, exempting just a few states.

afan
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Re: Durable Power of Attorney: Implementation Report

Post by afan » Thu Sep 13, 2018 5:37 am

Longruninvestor,

So sorry to hear about those problems.
From what you report it may have been that you were dealing with multiple different brokers and transferring assets after the death? In my case all the assets titled in the name of the trust were held in one account at one broker. We got that done while the grantor was alive. Transferring assets from an account in the grantor's name to an account in the name of the trust was simple and no special signature verification needed.

After death the broker did change the account number to one for the now irrevocable trust and I did have to provide them a new TIN. The broker pointed me to the site to get the TIN and did all the other work.

Transferring the few things that I had not known about and did not make it into the trust during life was a bit more hassle. I had to get the death certificate. With that and filing the will I got the letters of administration. With those companies would recognize my right to transfer assets from the name of the decedent to the irrevocable trust. Getting the paperwork and doing the transfers took over a month. This would have been a problem if I had needed that money to pay current bills. Since almost all the money was already in the trust, that was not an issue.

Had there not been a trust that was funded during life I would have had to collect all those assets and get control of them before I could pay bills.

I also lived far away from the grantor. I would visit when I could to see that person, but handling the trust never required this.

One issue that did come up: bank accounts. The grantor had bank accounts outside of the trust and I had a DPOA. The banks, ALL of them, insisted that I come in person to a branch then refused to accept the DPOA. So I just had the grantor close those accounts and deposit the money in the trust account.

The one bank account that the grantor had in the name of the trust was no problem.

Another difference between our experiences may have been that I was already serving as trustee. The trustee did not change with the death of the grantor. Thus, there was no proving that I was the person who was named in the trust. That had been taken care of years earlier.

When I initially got involved the broker wanted a photocopy of my driver's license to prove I was who I claimed to be. I scanned that and filed it by email.

Among the things I did as I went through the process was to use my power to appoint a co trustee. I appointed my spouse and we shared the work of running things once we took over.

Probating the small residual estate took much more work than did taking over the trust although the trust held almost all the money.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

afan
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Re: Durable Power of Attorney: Implementation Report

Post by afan » Thu Sep 13, 2018 5:46 am

Also possible that I just got lucky in that the single broker with which I was dealing had excellent customer service. They had a division that handled trusts and estates. They knew exactly what they were doing and did this all the time. This was one of the giant national firms and fully comfortable with doing things online, by email and telephone. Not once did they say I had to show up in person.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

Longruninvestor
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Re: Durable Power of Attorney: Implementation Report

Post by Longruninvestor » Thu Sep 13, 2018 10:43 am

afan wrote:
Thu Sep 13, 2018 5:37 am
In my case all the assets titled in the name of the trust were held in one account at one broker. We got that done while the grantor was alive. Transferring assets from an account in the grantor's name to an account in the name of the trust was simple and no special signature verification needed.


Bingo. I recommend that if someone is named as a successor trustee in a revocable living trust, that you consider doing the paperwork to be moved up to co-trustee status when the grantor(s)/other co-trustees are all alive, mentally and physically healthy and mobile. As far as signature verification goes, it's really about the policies in place at a particular brokerage or bank. My dad was a believer in not having all of his eggs in one or two baskets; and I worked with several firms and discovered that there is a lot of variation in signature requirements. For the sake of simplicity it was my desire to to consolidate the majority of the trust assets at one brokerage firm and my first choice was Vanguard. I filled out the Vanguard transfer forms and my mom and I tromped into Wells Fargo one day to get to Medallion stamp on the form, but the banker refused because the WF account wasn't a trust registration while the assets to be transferred were. Jane Smith <> Jane Smith TTEE. So it was either re-register the checking account to the trust and wait for all the paperwork to process and try again on the Medallion, or find a brokerage house that didn't require a Medallion. We chose the latter for this and other reasons.

This may might warrant a different thread, but I'm wondering if anyone has experience or special expertise with the estate closure process when there's a trust involved. I know after the grantor dies the successor trustee can sell the trust assets and distribute the proceeds to the trust beneficiaries without having to wrangle with the probate court on that distribution, and everything is kept out of the public record. But there must be something that has to be probate court approved, particularly making sure that creditors are given opportunity to make a claim on the estate. I've done some research and most states have a leaned-down informal probate for small estates, usually less than $50k --which presumably is THE reason why people create trusts. Has anyone followed this trail all the way to the end of the line? I'm not finding a lot of information on this topic other than a few high level guidance documents which direct an executor to use a simple sworn affidavit to collect the assets of the deceased --probably would be useful in transferring car titles so they can be sold.

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