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Trust vs will?
- Thread starter Boone
- Start date
Bill
Administrator
Sorry I wasn't clear there. I think it has more to do with inheritance taxes.
Tree Spud
5 year old buck +
For what purpose?
Why are you considering?
What is the value of your estate?
What are you trying to protect?
There are about 4 different types of legal trusts ... they all have requirements & costs to participate.
What are your goals?
Why are you considering?
What is the value of your estate?
What are you trying to protect?
There are about 4 different types of legal trusts ... they all have requirements & costs to participate.
What are your goals?
I have everything I own in a trust,it offers some protection against losing everything in certain instances.Mine spells out what happens and who gets what and is a revocable so i can make changes pretty simply.I would talk to an estate lawyer for sure if you own land
Tree Spud
5 year old buck +
Why exactly are the protections you are referring to, what instances?
What is the value of the asset(s) you are protecting? There is a real legal cost to a trust, typically a trust is not viable for an asset under $2 million.
Protection against loss, in other words define loss (liability, divorce, business partnership, bankruptcy, etc) is the opposite of wealth preservation & taxation in an estate transfer ...
Someday isle
5 year old buck +
With any of these kinds of questions I always suggest consulting a qualified attorney. I live in Missouri and my property is in Missouri. For me the answer to the question was both. A revocable trust is a good vehicle to have if your attorney recommends it. Then in your will, at least at the time I did mine, you can declare that anything not in the trust goes in the trust. My will and my trust were done at the same time and tied together There is some liability protection there but it also protects the estate for your heirs. I have a wife and five kids to think about as well as myself so making sure our assets are well protected is an important decision.
thats what i was referring to as far as protection.It also protects my home and business assets.This is one of those questions that really can only be made worse by asking on the internet instead of a estate lawyer.I don't mean that as rude but there are so many variables that I doubt you want to discuss online.Another thing along legal lines I see left out alot is if buying land with a partner having a legal document between the two along with life insurance on each other with buy out provisions is a must.Be prepared not regretful
Tap
5 year old buck +
Pretty much the same with my estate.
Our goal is to prevent the farm from being sold because of different ideas of siblings who are beneficiarys. Avoid a long expensive probate process. Worth around $800 thousand.
Tree Spud
5 year old buck +
A trust is one approach, but I think the more important question is ... how do the beneficiaries handle the situation if one party wants out of the property? I have to tell you, this is a tough situation. Hard to get everyone one to agree on repairs, expenses, use of the property, etc. One person wants to add/remodel, the other(s) do not want to make the investment. People get married and the whole situation can change overnight. I have been involved in several joint tenant properties and it was real hard getting any kind of common vision, and this was with grown adults. The issues & acrimony began to outweigh the enjoyment.
What you may want to consider is to write up a joint tenants ownership agreement where all beneficiaries have an equal (%) ownership and costs are split equally.
You can include a buy-out clause such that if one party wants to sell their share of ownership, all the other owners have right of first refusal to purchase. You could write in the agreement that 3 independent appraisers would provide a valuation of the property and the average of the 3 would be the required purchase price the other owners would have to pay.
If the remaining owners do not agree, step two would allow one owner to buy that share, if that fails, step allows the person to sell to the open market.
We also have the same dilemma as you with how to pass down assets. I know that some of our heirs have not demonstrated a level of responsibility or interest that we would expect. We will not be splitting things equally, our rule thumb is that if you are not moving forward in a positive & constructive way in running your life, we are not going to subsidize self indulgences.
Good luck, let us know what type of approach you come up with.
Buckly
5 year old buck +
A trust is a lot more expensive up front but, less problems and expense when you die. The successor just continues on seamlessly. All your assets have to be titled to the trust and it must be written by someone with lots of experience because it's extensive and that can add up to a lot of money.
A Will is much , much cheaper but it will have to go through probate.
If you have a large amount of assets and prefer privacy of your business, a trust makes sense. Probate costs could eat up a large amount of money. If you only have small to modest assets, just a Will is probably a better choice.
You still have to pay inheritance tax either way I think.
A Will is much , much cheaper but it will have to go through probate.
If you have a large amount of assets and prefer privacy of your business, a trust makes sense. Probate costs could eat up a large amount of money. If you only have small to modest assets, just a Will is probably a better choice.
You still have to pay inheritance tax either way I think.
Tap
5 year old buck +
This is a very complicated subject and when people share advice, keep one important detail in mind...Estate law varies from state to state. How the laws work in Ohio are different than how they work in Pa. I've had some extremely ugly dealings with family inheritance due to misunderstanding how laws work in different states. I'm not saying that any of the advice that the above posters is bad advice, but it may not apply to YOUR state.
One thing that may be an issue to you...Wills must be filed with the county and become viewable by the public, and trusts do not have to be filed, thus, they can stay private. At least that's how it is in Pa...I just dealt with that recently when my brother died.
And regardless of which direction you go, make sure you have a trustworthy executor AND other heirs understand your choice of will vs trust and keep more than one heir informed about changes to your wishes. A greedy or spiteful executor that is also a potential heir can really fowl things up. They can potentially deny that there is a will. If the executor is also the spouse, they can claim that there was no will and keep everything for themselves...1st hand experience here on that one.
I've touched just the tip of the iceberg. There's a pile of other ugliness that can happen. Estate planning is complicated and estate settlement can tear families apart. No disrespect to anyone's earlier advice, but you need to hire an ESTATE lawer (not just ANY lawyer).
SW. Pa.
One thing that may be an issue to you...Wills must be filed with the county and become viewable by the public, and trusts do not have to be filed, thus, they can stay private. At least that's how it is in Pa...I just dealt with that recently when my brother died.
And regardless of which direction you go, make sure you have a trustworthy executor AND other heirs understand your choice of will vs trust and keep more than one heir informed about changes to your wishes. A greedy or spiteful executor that is also a potential heir can really fowl things up. They can potentially deny that there is a will. If the executor is also the spouse, they can claim that there was no will and keep everything for themselves...1st hand experience here on that one.
I've touched just the tip of the iceberg. There's a pile of other ugliness that can happen. Estate planning is complicated and estate settlement can tear families apart. No disrespect to anyone's earlier advice, but you need to hire an ESTATE lawer (not just ANY lawyer).
SW. Pa.
H20fwler
5 year old buck +
I have everything spelled out pretty well in my will. My plan barring any unforeseen quick departure is to transfer my properties into my kids names ahead of time, in Ohio they have to be the titled owners at least five years prior to my death to keep out of probate and to keep any retirement home from trying to grab them.
If in doubt just ad the kids (or whomever is to get property) names now and have the title be a survivorship for now, I've started doing that with any new properties.
If in doubt just ad the kids (or whomever is to get property) names now and have the title be a survivorship for now, I've started doing that with any new properties.
Tree Spud
5 year old buck +
...."6 people in the trust?" .... are you saying 6 siblings will be the beneficiaries? OMG!
Look at this property like a business, as it really is. Its is not to produce income (I assume) but it requires money to pass through the trust via shareholders who have to invest to support the operations (maintenance, taxes, insurance, etc.) of the trust.
I don't know anything about you, your family, or the size of your estate.Have seen many 2 person partnerships succeed, but have never seen one with more than 2 people last. When there are 3, one will always try to leverage their wishes with one other ... nature of the tribe.
If you would like to learn something about the beneficiaries ... Buy a Monopoly game board. Go to the bank and draw out $10,000 IN $1, $5, & $10 increments. Replace the fake Monopoly $$ with the real $$. Tell your kids they each get to keep what they win in the game.
As TAP said, go talk to an attorney .... one who has lots of experience with family estates <$5 mil (assuming that is where you are at). Spend the 1st $1000 you pay him for the horror stories before you ask him how it can be set-up.
As I said earlier, no expert, but have been involved in multiple joint tenant properties, business partnerships, and have worked with many family owned business'. If you could make this work, you would be one of the very few.
.
I just did a trust back in January. Cost me 3500$
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