johnnymk

My mother is 81, owns her home, has nearly 200K in savings. When she dies, the house and the money will be left to my three sisters and myself.

I have heard of trusts but know nothing about them. Anyone familiar with them?

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brainsmile

http://www.savewealth.com/planning/estate/livingtrusts/

http://www.lectlaw.com/filesh/qfl07.htm

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LegendKiller

If there is anything I have learned in the past 10 years about people dying, make sure she has an iron-clad will that details *exactly* what is supposed to happen to her assets.

I have seen several smash-and-grab raids by my own family of grand parents estates, and other friends once one of the two passes.

Trusts are good for keeping the assets isolated from creditors.

johnnymk

OK, I read brainsmiles's links. Thanks BS

Let's just say that the trust would be in my name, or whomever.

Does she have to put the deed of her home and all of her money in the trust, which would be then under my name?

How are yearly Federal and State taxes calculated while she is alive? Are they still under her name or mine? I could see how the person's named who is the trustee? could have beneficial or adverse tax consequences each year.

dbax791

All a living trust does is put the assets of the estate under control of the trustee - in this case your mother. So in legalese it would be "The trust of jonnymk's mom, johnnymk's mom trustee".
Yes, put the deed of the house and all savings accounts into it.

But in the event of death, the trust as an entity will fall to the next executor named in the trust, in this case you. So what the trust basically does is puts the assets in one legal bucket so probate can be avoided and you can distribute the assets without court intervention.

So long as the estate is worth less than 1.5M, you should not have to worry about taxes. In any case, making a trust has no effect on taxable income in the meantime.

I got my trust from a lawyer, cost $600. I had to redo my house ownership so now according to county records my house is not owned by "Dbax791" but owned by "The living trust of Dbax791, Dbax791 trustee".

Good luck!

cheapie

i know this sounds awful but if she is likely to pass sometime soon, wouldn't it be a good idea for her to give you three the max gift she can give you tax-free? can't you get a gift of $10k/year w/o paying taxes?

brainsmile

good point though

johnnymk

I guess?? But I wouldn't want to approach her with that idea." Hey, Mom, hand me over $10K." Just seems tacky

BTW, thanks dbax.

cheapie

i know. i just didn't know if she was looking to lessen your eventual tax burden or not. sorry.