What to do as trustee?
Yes, the guidlines are the same. The only difference a revocable trust has from an irrevocable one is the revocability factor. Revocability is an advantage only to those who want to maintain 100% control of their estate until the day they die.
Revocable trusts are not for those who want airtight asset protection.
Trusts are a must for some estates, moderately helpful in others and not necessary at all in still others.
There are several factors we look for in determining the needs of the estate.
Is this an estate worth more than the minimum probate size dictated by that state’s laws? For example, in Missouri, any estate worth over $40,000.00 (but only $5,000.00 in New Jersey) must be probated in court unless some direct to beneficiary method is used.
Regardless of state laws, if the estate is worth over $100,000.00 some type of trust is needed for it.
Does the estate have property in more than one state? It is not at all uncommon for an estate to own a timeshare in Hawaii, a cabin in Tahoe or oil rights in Oklahoma…..etc. If so, that estate will have to be probated in several states and a trust is necessary as most trusts avoid probate all together.
Does the estate owner want privacy? Wills and the probate process are matters of public record. Trusts that come into effect during the life of the estate owner are totally private.
Does the estate total more in value than the federal death tax exemption? We don’t want the heirs paying 50% and up of their inheritance to the feds. Trusts can be used to gain two federal exemptions, one for Dad and one for Mom.
Some estate planners espouse that EVERY estate needs a trust, however, I’m not one of them.
Good stuff….I owe you a beer!
Do you think some of the rules could be changed – with retroactive mandates? Maybe I’m getting too damned cynical but a fear I have is that our "broke" government may look for ways to scoop money from any transfer of wealth. And, the local jurisdictions are getting strapped for cash, they may want to greatly increase the fees while extending the lead-time.
No, I don’t think you’re too cynical.
Bush repealed the death tax in graduated stages to be completely eliminated in 2010. This year the exemption is the highest it has ever been: $3,500,000.00.
If nothing further is done, there will be no estate taxes at all in 2010 and it will revert back to the Clinton era exemption of $1,000,000.00 in 2011.
However, Obama has already announced that this will change and Congress is working on it right now. No one knows for sure what to expect. Cross your fingers…lol.