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Why do I need a trust?

I know I need to draft a will and a living will, but don’t understand why everyone is saying i need a trust.  Doesn’t a will still hold water?  A trust seems so confusing.  I just want to leave whatever I have left to my 3 children evenly.  Do I really need a trust and why?

Posted in work & money.

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8 Responses

  1. Generic Image Content says

    I think it depends on where you live.  I live in California, my parents died a few years back, had a will and a trust, but the trust wasn’t fully funded,  the real estate they owned was never put into the trust.  My mom died after my dad and upon her death all money in her accounts was distributed to her three children.  My brother was executor and became overwhelmed and asked me to take over.  We had to go through probate to get permission to sell the homes- it was very time consuming and stressful.  My brother died unexpectedly during the probate which delayed everything and created lots more paperwork and visits to court.  In all it took 3 years, of course we did nothing for about a year after my brother died- just couldn’t.

     I would definitely find out the ramifications of not having a funded trust in your state.  Best wishes with this.

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  2. Generic Image KGrandma says

    If you have a trust, and everything you own — house, savings, whatever — is in the trust, and you state in your will that the trust (proceeds from it, whatever) is to be split evenly among your children, you can avoid probate in most states (maybe all). It really depends a lot on what you have, how much, etc, and you really should have an attorney advise you. It costs a few hundred dollars and could save many times that amount in the long run. Probate ties everything up for years, and no one can do anything with your assets, which gets expensive and sometimes can cause all sorts of problems for and among your heirs.

    Living wills/DNRs, to me, are much more important, because without them you can/probably will end up on life support, which will eat up all your assets quickly, leaving you penniless and your heirs with huge medical bills to pay. You can probably find one for your state on line. Just make sure to have it witnessed and/or notarized & give a copy to your doctor and keep one in an obvious spot in your home. Tell your children where it is.

    We all put this stuff off, hating to admit that we all die, but it takes very little time, really, and then, once done, you really don’t ever have to think about it again, and you can breathe free, knowing that your wishes are going to be followed. There are attorneys who specialize in these things and you can shop for one that will charge you a reasonable fee.

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  3. Dallas Lady Dallas Lady says

    In addition to the info provided by others above, trusts can be helpful to minimize estate taxes (if your estates large enough to be taxed). It can also be helpful, to direct how the money flows later after your death. My son is the heir of my estate, but through the trust. If he inherits, and anything were to then happen to him, the money remaining can only go tom his direct decedents (if any). Ir he dies after inheriting my estate and he has no children, then the money remaining in the trust goes to designated charities ive designated and distant relatives of MINE. (not my sons father from whom Im divorced, or my sons half brother whom I obviously did not give birth to.) Many potential reasons to put a trust in place!!!

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    • Pupukea Pupukea says

      Good point.  Estate taxes is something I hadn’t considered.  Maybe that’s the advantage of a trust verses a will.  I’m old enough to remember when the common thing was leaving a will to avoid probate.  Most people just wrote a will and left it in a drawer or a safe.  Heirs could falsify them, contest them, etc., but your signature on a piece of paper was considered a valid instrument and also a way to avoid probate.  I don’t question that a trust is the way to go, but I wonder why a simple will is not considered anymore, but the estate taxes is probably the answer.  Thanks for you thoughts. 

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      • Generic Image KGrandma says

        I’m not an expert, but I think that unless your estate is in excess of $600k, estate taxes are not the reason. You can consult with an expert for very little money and come away with all the documents you’ll need. For under $1000, certainly, for a simple trust (mine was half that), you can spend the rest of your life without THAT worry.

        Make sure that you let everyone know where they can be found, then forget about it.

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      • watruw8ing4 watruw8ing4 says

        But make sure you check out your state estate ramifications. Ours (PA) takes a chunk out of almost everything.

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  4. Generic Image Maggie De Vore says

    All such good advice — and if you are a member of AARP they have lawyers who will give you a good price.  I was advised to give each of the children (adult) and granchildren what special things they might want — antiques, etc. — then sell everything else and split the money four ways.  I’ve put a special amount in trust for the grandsons.  If something should happen to one of the children – their share would be added to the remaining children.  It is neat and efficient and hopefully a good decision.

    It is also my understanding that trusts do not have to go thru probate.  Check with your lawyer or go online.  Agree with KG regarding living wills.  Very very important.  Also telling your children where this information is!!  It is also very important to have the right person as executor.  Was told ‘not a lawyer’ — but???  Any ideas out there??

    Everything I have is with the trust with the exception of my checking and savings accounts — and I will include them next week.  I am the executor now – and the trust is revocable — meaning I can change it any time before I die.  Not soon!!

    Thanks for bringing this up — one of our more essential considerations at our tender ages. 

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  5. Generic Image Karen Monks says

    It is a nice thought “to leave whatever I have left to my 3 children evenly”, but life is not so easy to parse.  The children may not agree on how and when to divide up assets, such as a house.  If the assets are in a trust, the trustee who is in place when you pass on would be able to do so in an orderly and reasoned way.  Another benefit of a trust is that if a trustee becomes incapacity for some reason, such as Alzheimer’s disease, the remaining trustee or subsequent trustee established by the trust could manage the trust without the need to go through a leagal guardianship process.    

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