My wife and I each have one son from a prior marriage. They both are college graduates. We own two homes that are not of the same value. My wife wants to get things sorted out so that when she dies her son is well taken care of. She has been talking about a trust. I am not too concerned about my son. I believe that he can take care of himself and that we do not have to save our money for them. I feel she is more concerned about taking care of them from the grave than taking care of us. To make peace, I am about to go see a financial planner. My heart tells me it is not the right thing to do. We have a good relationship. What is your position on this matter?
Get advice on money matters from The Bee's Claudia Buck and a panel of local experts
In the 1990s we established an A/B family trust and have always placed all assets in the name of the trust with us as trustees. We do not expect to exceed the $5 million estate threshold and wish to convert to a simple family trust.
How will this affect all the documents established as "James and Mary, Trustees Under 1990s Family Trust?" We have invested in several real estate trust deeds. Must these documents be quitclaimed to the simple trust or can the simple trust be stated as just a revision to the A/B trust? Thanks for your help.
James and Mary, Elk Grove
May 2, 2013
My sister is the trustee of our parents' revocable trust. We will soon be selling their house and property. I feel there is a lot of unnecessary money being spent. Is she accountable for what comes and goes out of the checking account? Do I have a right to know what is financially going on? If so, does she notify me or does the attorney?
It has been almost a year since our parents died and I have no idea where we are financially. I have been involved in preparing the property and house for sale. Do I have a say in accepting an offer or not? My sister feels it is her responsibility as trustee to handle everything without including me. Thank you for your time.
We need to change the beneficiary in our revocable living trust. Must that be handled through an attorney or can we make that change ourselves? If on our own, must the change be witnessed and notarized? Thank you!
April 26, 2013
Regarding the recent question in the Bee on changing title of your home to community property with right of survivorship, what is the overall benefit of making the change? We paid off our house about a year ago and wonder if changing the title is something recommended.
I am selling my house and wish to gift my sons from some of the proceeds. I understand they can each receive $14,000 from myself and $14,000 from my husband. This will be a one time event, so will not trigger gift tax. My question is, is there any paperwork involved and do we need to file special forms when we file our taxes? My husband and I use turbo tax and used the standard deductions last year. Thank you!
I just opened an online Health Savings Account (HSA). On the Designation of Beneficiaries Form, it asks for the name and address of the individual, or a trust that I would like the money to go to if I die. My husband and I have a trust together. Should I designate the trust, instead of my husband directly, as the beneficiary?
This leads to my second question. Our regular checking and savings account are titled under our trust. Should I have done the same for this HSA savings account? It is in my name only, not my husband's. Thank you.
Julie, Granite Bay
I am the single beneficiary of an irrevocable trust and my cousin is the trustee. The trust does not state how much the trustee can/must charge for services. She is hesitant to take any pay, but I would like to pay her. Is it possible to pay her out of the trust? She is the only one who can write checks for the trust but feels uncomfortable writing a check to herself, even though I approve.
What is the common practice? How can we handle this comfortably?
Q: I have a living trust and am getting different opinions from friends about whether or not I needed to file an estate tax or death tax return after my husband passed 6 years ago. I am very confused. Thanks for any help you can give me. Some say it is not necessary if you have a trust.
Betty, Elk Grove
April 15, 2013
Q: My wife and I own our home free and clear as community property. How do we change title to "community property with rights of survivorship" without causing the property to be reassessed for property tax purposes?
Q: As an unmarried trustee for a small (approximately $1 million) family revocable trust, I am considering a long-term relationship with a widowed friend, who also possesses a family trust. We wish to maintain separate trusts. Predictably, my home is the major asset in my trust -- with the remainder being CD's, annuities and cash.
What are the tax implications if I wish to sell my house and distribute the proceeds among my five children as part of their inheritance? I understand that the IRS has a $14,000 per year gift consideration, but what if I choose a larger amount, say $100,000 per child? Help.
I am a 71-year-old widow. All I have is my house. Do I have to spend a lot of money making a will or a trust? I have two grown children and have said it will be up to them to do what they want with the house. I have called attorneys but they want $700 and up to make out a living trust or will. I cannot afford that amount. What advice can you give me? Thank you very much.
March 16, 2013
Q: We hired a lawyer to make our trust. Ever since, we've been living a nightmare. The trust has so many mistakes. We asked the lawyer to correct the problems. Eventually we were "fired" by our lawyer, saying we should find another attorney to help us.
We have tried to find someone but nobody wants to revoke our trust as we asked or correct the mistakes. Where do we go from here? We have an unusable trust. We are in our senior years and can't afford to throw money away, one lawyer at a time. (Of course, the attorney cashed our $1,000 check.) Help!
March 10, 2013
Q. My father moved to Australia in 1987 and became a citizen there (I am a born and raised American citizen). He is setting up my inheritance (bank, home, stocks). Australia does not have inheritance tax, but I heard the IRS will tax the heck out of me. I suggested he put me on his house, bank and stocks to reduce or eliminate taxes. Is this correct? Do I have any other options? The total of the above will be just under $500,000. Thanks. Sparky, Florida
February 28, 2013
Q: I had an account with Capital One. My account was put in a trust. When I went to close the account, the bank wanted to see my entire trust. We finally agreed on certain documents. What document do I need to close my account after it is in my trust? Also if I add or delete accounts in my trust, do I need to have the documents notarized by a Notary Public?
February 28, 2013
What documents do I need (other than the County's "Preliminary Change of Ownership Report") to transfer our home in Gold River into our family trust? Can I do this without an attorney? Also, what is the best way to do the same for a rental home and 1.2-acre lot in Asheville, North Carolina?
Don, Gold River
February 27, 2013
My assets, including my house, are in a revocable trust, with my three children as heirs. My current property taxes are based on Prop.13. When I die, will the Prop.13 rate roll over to my heirs or will their property taxes be based on the value of the house at my death?
Donna, Citrus Heights
February 27, 2013
My parents both passed away in 2011. My brother and myself are co-trustees of their trust. We had their home listed for $925,000, but then my brother decided to move into the house (which I discovered after the fact). He is "renting" the house and paying me 1/2 of the rent, which is below average for rental homes in that area. He now expects me to pay 1/2 of the maintenance, fix-ups and improvements. I would like to put the house back on the market, or have my brother buy it. Can my brother continue to live there, even though I never agreed to it? It is a great deal for him and a lousy deal for me.
February 25, 2013
Q: Father dies leaving a small estate consisting of a house valued at around $80,000 and a pickup truck valued at $4,000. His will designates son and daughter to get everything split equally. Is probate required? Is it complex enough to require lawyers or can an individual file the required papers? And what might those be?
February 25, 2013
I would like to remove my present executor and set up a new one for my trust, but prefer not to have another individual person. What are sources for finding some kind of institutional rather than a personal executor? How do I show the installation of a new one?
My will and trust are properly set up; no changes required. However, I may want to drop one or two recipients. Does this need to go through my lawyer or can I simply write and attach new instructions to the will?
February 11, 2013
Q: My parents have owned a summer cottage in Stonington, CT since the 1960s. When my father died 10 years ago, my mother had the names of my 2 siblings and myself added to the deed. Mom passed a few months ago. I live 2,000 miles away. My brother has no real interest in the cottage. We were always told since childhood that the cottage was the only thing my parents had to leave us. My brother and I always assumed that my sister would buy out our share. She and her family enjoy the use of the summer cottage.
Now that Mom is gone my sister feels we should just give her the cottage. She feels that entitlement because she is the only one that appreciates it and that she spent more time with our mother. My brother and I are not wanting to sell it to a stranger but on the other hand we don't feel we should just "hand it over". The cottage itself doesn't have much value, it is the property near the ocean. Total value is about $300,000. Should something happen to my sister (we are all 3 approaching 60), I am sure that her children would sell it immediately. Since last May when Mom passed we have just let my sister use it and all 3 of us have paid the property taxes. Any advice? Is this something a court has to settle? Mom really left us in a bind. Any suggestions would be welcomed. Thank you in advance. -- Cynthia, Sacramento, CA
January 22, 2013
Q: I have a revocable trust with my wife and son (adult) as trustees (house, cars, savings, etc.). My son is on one of my checking accounts, which is not in the trust. If my son is sued, can my monies be attached in the lawsuit? And if so, how can I stop it? -- Gary, Carmichael, CA
January 7, 2013
Q: My father, brother, sister and I are joint tenants on shares of stock that he has put in his living trust. My question, is it possible to put something in your trust that is in joint tenancy? --Tony, Roseville, CA
December 27, 2012
Q: Can my daughter, who is an American citizen but lives in Sweden, be administrator of my revocable trust (which is small and mostly insurance proceeds)? --Wanda, Rocklin, CA
December 9, 2012
Q: We bought 2 burial plots when we were married. The plot is listed in both our names. We got divorced and he remarried. It did not come to my mind about the burial plots in our settlement. He died 2 yrs ago and was cremated and is not using the plot. Am I entitled to the other plot or does the new wife get it? The plot is listed in our names. --hungsen77, Sacramento, CA
December 6, 2012
Q: Can a Qualified Personal Residence Trust or "QPRT" be used for a residential rental property? I do not live at this residence which has a value of about one million. I would like to protect this property from as much taxation as possible and give it to someone who is unrelated to me. --Margaret, Santa Barbara, CA
November 28, 2012
Q: My father remarried after my mom died. His new wife has a trust set up with the investments from her prior husband. She and her 3 children are on this trust. She receives dividends, about 2k a month to live on, which she and my dad use for house expenses, etc. He just has Social Security. If she goes into a rest home (advanced dementia), can this trust help out with these costs so my dad does not have to sell his home? Thank you. --Dede, Sacramento, CA
November 27, 2012
Q: Several years before my mother passed away in 2010, she added the names of all her six kids to the deed. The oldest sibling is executor and I am secondary. The first loan is in (Mom's) name only. She is on the second deed as well as myself. One sibling lives in the house and would like to refinance both loans but her name is on neither loan. Does she need permission from all the others to refinance, or can either the other sibling or myself give permission if needed? The bank can't seem to give the same answer. Also, what is the difference between a "trustee" and "executor"? And is being the executor the same as having power of attorney for someone? Thank you. --Cora, El Dorado Hills
November 21, 2012
Q: Before my mother died she set up a special needs trust for my sister and I, we are both on social security. In her Will she said that she wanted the house to go into the Estate and for it to be sold and that would help to fund the trusts accounts since the proceeds would be divided between the two of us. She also left a great deal of stocks that her broker had set up and she would usually show a gain (no matter how small) on her quarterly reports. What I did, after she died, was sell my house (that I had already paid off) and buy her house but I am being told now that since my sister is also a beneficiary (there is just the 2 of us), that I will only be allowed to get 50% of her Prop.13 instead of 100%. Why is that, my sister did not buy the house I did. And if that be the case than maybe I should have only had to pay one half of the asking price of the house, since the other half was left to me in mom's Will. So I have a couple of questions:
#1 Did I get a bad deal having to pay full market value for the house, when 1/2 of it was left to me?
#2 Why would the County only give me 50% of mom's Prop 13, The name on the new deed is my name not my sisters.
God Bless my MOM, she had her heart in the right place and I love and think of her everyday.
Thank you for your time, Ellen
P.S Since we have Special Needs Trust, we are required to have a trustee to manage the trust accounts. If you are not happy with that person, can we just fire her? Can we ask for an outside audit, if so HOW?
Thank you again. --Ellen, Sacramento, CA
November 21, 2012
Q: I just created a living trust and put my house and investments into it. Should I also put my 5th wheel trailer into the trust? I did not add my cars. -- jstpeg, Grass Valley, CA
November 5, 2012
Q: When is it best to have a trust set up? My assets are 4 cars, household goods (no house), under $100,000 in savings, and a FERS retirement account. What type of trust would you recommend, and how does one select a firm to set one up? Thank you. -- Scott, Ione, CA
November 1, 2012
Q: We need to find a reputable executor for our trust. We don't have any relatives nearby that we would like to name. We have friends we trust but they are older like us and may find the chore too difficult. Who might we hire and what are the usual costs involved? Thank you. -- Marlene, Elk Grove, CA
November 1, 2012
Q: Is there any harm in leaving a house titled in a trust name after a person is deceased? All other assets have been disbursed, the house is a rental and the rent is split evenly (after expenses) among the siblings, each claim the income and expenses on our individual tax returns, is that okay? --Denise, Elk Grove, CA
October 30, 2012
Q: This concerns leaving our home to a relative. My wife and I have a revocable trust and our home will be part of our distributed assets. In order to simplify the executor's task, can we designate the house and belongings to a single beneficiary rather than selling the property? The home is paid for, but would it be prudent to discuss this action with the beneficiary in question? Thank you. --Rob, Elk Grove, CA
October 30, 2012
Q: I think that I made a mistake on my second amendment to declaration of living trust. I wrote that both my antique vehicle & car would be sold & the proceeds shall be divided equally among my then living great-grandchildren & be held in trust until each attains age 25. I am 84, have 9 great-grandchildren at this time. Ages 14, 11, 5, 4, 3, 2, 2, 6 months, and 6 months. I feel that with the small amount of funds, the work involved would not be worth it. Do you have any suggestions? Many thanks! --Bill, Elk Grove, CA
October 9, 2012
Q: I have power of attorney for my 96-year-old great grandma who is suffering from dementia and is no longer able to live in her home. She has a vacant home in Bakersfield. I am wondering if I should leave the home vacant until she passes or would there be benefits to selling it while she is still alive? -- Linda, Fair Oaks, CA
October 9, 2012
Q: My parents passed away recently, in December 2011 and July 29, 2012. There are three daughters; my two sisters and I are to divide everything equally, according to the living trust. Our middle sister is the trustee.
Much to our surprise she wants to make all the decisions without our consent. She insists that we sell the house on 2 1/2 acres. The attorneys had us have the house assessed and it is well below what we thought it was worth. My other sister and I would like to rent it out until the market is up. I know we can buy her out, but what determines the price?
Does the house then come out of the trust? Does that involve a lot of legal problems? My parents also owned property in Nevada. Would we be better off just liquidating everything as opposed to waiting for a better market?
It has been two months to the day that my dad died. Do we get a grace period before we have to decide? My sister, the trustee, says we have to decide by November 1, which seems too soon, as we are still grieving our parents. Thank you for any consideration you can give. -- Linda, Rocklin, CA
October 9, 2012
Q: We have started to look after my husband's elderly aunt, who is not a family favorite. She is not in the best of health and has no children or husband. She has a handwritten will and has given her sister (my husband's mother) 50 percent and us the other 50 percent (probably due to the fact that we've been helping her).
We didn't really think too much about it because we suspected there really wasn't much money involved - probably just enough to pay her bills. But we've learned recently that the amount is more like $150,000 with at least half in a CD and the rest in stock funds. There is no real estate.
The will does not name someone to execute the will. We plan on dividing our half with my husband's brothers and sisters who can use the money, no matter how small.
Will there be probate required or can we handle this ourselves? -- Kris, Folsom, CA
September 27, 2012
Q: I'm concerned with the possibility that Congress may fail to act to put in place a rational 2013 estate tax law, instead letting the estate tax exclusion return to $1M per individual ($2M per couple). I'm responsible for managing my mother's estate plan. Her estate consists of $3.3M cash and $1.6M real estate. Her deceased husband's irrevocable trust will shelter $900K from estate tax. My plan is to gift assets such that her remaining assets total $1M cash with (hopefully!) no estate tax due at estate settlement.
Is it possible to gift her home ($1.5M) into an irrevocable trust, sheltered from estate tax? If so, what are the other consequence of this action?
How long would you wait on Congress to act before you went ahead with the proposed asset reallocation plan? -- Charles, Sacramento, CA
September 14, 2012
Q: My husband and I have an online savings account which does not allow titling in the name of a Trust. However they do allow naming the Trust as the beneficiary. If we were to name the Trust as the beneficiary, what happens when the first one passes? Does the surviving spouse become the owner of the account with complete access to its monies or is the account frozen until the surviving spouse passes? --Confused, Sacramento, CA
September 12, 2012
Q: My wife and I have a spousal trust. When one spouse dies, is it required to change the name of the trust to the surviving spouse and also the names on property and accounts held in the trust? -- Jack, CA
September 12, 2012
Q: My son is on SSI for a mental illness. He is going to have settlement on a lawsuit soon. I understand that in order for him to protect his SSI this settlement must go into a first party trust. Is there any alternative and, if not, can you recommend how I go about setting this up? Thank you. --Lisa, Sacramento, CA
September 7, 2012
Q: My 94-year-old Dad now lives with my sister, his home sits empty and his total estate is over $1M by a few hundred thousand. The trust divides his assets equally between four children. My question is: if Congress does not make a move to keep the amount at $5M, would the estate tax be on the entire amount, or the amount over $1M? Second question: Is there any way to reduce this amount below the $1M if they don't? Third question: Can my sister (Trustee) gift each of us the maximum $13,000 annually without paying gift taxes? Since Mom is deceased, can he gift to husband and wife separately or just one gift of $13,000? Please help. -- Sherry, Rancho Murieta, CA
September 7, 2012
Q: What is the very basic information needed in a Trust and Will so they won't go into probate court? We have a will and a trust (a large binder full of extraneous legalese that was done for us 15 years ago for $1,750). I don't want to throw away anything until I know exactly what I should keep. I just want to simplify everything for our two sons. Our lawyer was of no help. Thanks. -- June, Cameron Park, CA
September 6, 2012
Here's feedback that I received from a reader, a community bank official in New York, who was responding to an Aug. 30 Q&A that I posted. The question asked how a successor trustee knows what to do in a trust administration, and whether hiring an attorney was the only option. In my answer, I discussed my view that working with an experienced lawyer makes the process go much more smoothly for the trustee. Tim offers another approach, below.
August 30, 2012
Q: I have a revocable trust but do not know how to advise my trustees how to handle my trust after I am gone. Is there a list of where to start? The only option I know is to hire an attorney, which a trust is supposed to eliminate or at least reduce. --Gaylord, Placerville, CA
August 30, 2012
Q: I am recently divorced. My ex and I still own a house together, listed on the grant deed as community property with rights of survivorship. Is it necessary to change the deed and if so, how should we be listed? Thank you. -- Jim, Lincoln, CA
August 30, 2012
Q: I am writing for my Aunt A. My grandmother died in the 90's. She had a living trust that gave her house to her two daughters, Aunt A and Aunt B. Aunt A took care of my grandmother towards the end of her life, and the trust was changed to give her 3/4 interest in the house. Grandmother died in a nursing home, paid for by the county. Aunt A has lived in the house all these years, taking no action to close the trust or anything. She was afraid she couldn't afford to pay the attorney to do the administrative work required, afraid that the county would want some money for grandmother's care, and afraid Aunt B would find out she got more interest in the house. So she's done nothing at all. Aunt A is having health problems and needs to refinance the house for money to take care of her health and because the house is in disrepair.
My question is this: what is her legal liability at this point? She is afraid to take any action, because she doesn't know what the ramifications will be.
Any information or advice you can give us would be greatly appreciated! --Joy, Sacramento, CA
August 17, 2012
Q: I read the article about trusts, which are used to avoid probate. How much would a simple probate cost...no real estate, just cash and IRA? My son processed his divorce papers through court with all the online resources, so I'm inclined to think that person with a duplex doesn't need a trust. How many of us die in our residences? -- Linda, Folsom, CA
August 16, 2012
Q: My wife and I are trustees on our Revocable Trust. My wife died recently. My question: What do I do now regarding the trust? I've received different advice such as do nothing to I must file a tax return. What about time frames for acting? Also, I understand that any shares of stock gets a step-up in basis, either a 100% or 1/2 step-up. How do I accomplish this step-up? -- Lewis, Rio Linda, CA
August 15, 2012
Q: We have an older Trust which was written when our children were minors. We need to update and make some changes since the children are now in their 40s. We need recommendation for a trust attorney in our area, we are elderly and driving into the city is a problem for us. It is important to make changes in our trust before we are gone from this earth. Recommendations for a good and reasonable priced attorney in our area would be appreciated. --Gloria, Gold River, CA
July 24, 2012
Q: I have a rental property valued at $265,000, the mortgage balance is $151,000 at 5.75%. I'm considering a loan to pay off this balance from my father's living trust account, which is in excess of $400,000. I am the sole heir and these funds are just sitting in money market accounts making .25%! I would set up documents for the loan for tax purposes pay the monthly interest to my father's account at 2.00% with a 5-year payback schedule. If my father passed, how would these funds $151,000 which would be outside the trust be viewed by the IRS? Is there an amount of money that can be outside the trust without being subject to probate or tax? - Walt, Sacramento, CA
Q: My boyfriend and I recently purchased a vacation home. For now, the title is held in joint tenancy because we could not come to an agreement as to what would be the fairest thing to do if one of us should die. We both have living trusts set up where each of our assets are transferred into upon death. The problem is that my boyfriend wants his son to inherit his half of the property after he dies.
I see potential problems in having to share ownership with his son. What if something happens to him and he needs money? Can he force me to sell the house or buy him out? I don't think it's fair to me that the son would be entitled to assets from the property just because he is kin. I would be the one paying the mortgage and keeping up with the maintenance. I am fine with leaving my half to my boyfriend, but he wants to revisit the lawyer in a few years and change the trusts so that his son has a stake in the house.
Can you offer any solutions so that both parties are satisfied? I should mention that the son is currently 17 years old and my boyfriend is 20 years my senior. Thank you for your time.
July 18, 2012
Q. I noticed that an earlier Bee column stated that $1,500 - $4,500 is the going rate for a will and trust; however, I have family members that claim that they have attorneys that can do it for as little as $750. Why the huge difference? - Bryan, Sacramento, CA
July 2, 2012
Q: I have a common situation, but with an interesting twist. I am 87, have enough money to live on but am not rich (about $300,000 or so), and get Social Security. I live in California with my granddaughter, but I also have a house in Croatia where I visit part of each year. I have a Totten trust on most of my funds and so if not for the house in Croatia I don't think I'd even need a probate. How do I pass on my house in Croatia? Do I need a will here or a will in Croatia? Can I set up a trust in California? Is this something that I need a lawyer for in California, in Croatia, or both? Thanks for your help. - Tom; Sacramento, CA
Q: My father passed away in October, 2011. All of his assets, including CDs, are held in a trust and I am the executor. Prior to his death, he invested over $200,000 in a CD with Wells Fargo that is due to mature in 2016. I went to the bank to try and break the CD and was told in order to cash it out, I would have to forfeit over $5,000 in interest.
Is this accurate? My siblings will need the money before 2016, but a $5,000 penalty seems excessive. What do you think? - Elaine; Sacramento, CA
June 29, 2012
Q. Approximately how much would I pay for a living trust if my only asset is my duplex? - Sharon; Carmichael, CA
June 29, 2012
Q. My 80-year-old mother had a living will done many years ago specifying that all assets, including her house, be divided equally among her five children. My sister and a deceased brother got my mother to take out several loans of more than $100,000 for their children's college and to buy a house. My sister has power of attorney and moved her adult son and his family into my mother's house. (Mom still lives there.) My brother's widow lives in the home my mother loaned them money to buy. My other two siblings and I have been ostracized from my mother and sister for raising ethical questions and reporting possible fiduciary abuse to authorities.
My mother is in extremely poor health. When she dies, what will happen to the house that was supposed to be sold and divided equally, if my mother still owes money for loans she made using the house as collateral? Mother is on Social Security and has no other assets of value. What can be done to ensure we all receive our inheritance?
June 29, 2012
Q. My wife and I have a safe-deposit box. After we are gone, will our kids have any problem getting into the box? I've heard that banks refuse to give children access until certain requirements are met.