Aren’t trusts a hassle at tax time?
There are different kinds of trusts. Mine has absolutely no impact on my taxes.
I do not plan on worrying about taxes once dead
1 Like
A well organized trust should actually minimize tax burden to those inheriting for later sums compared to just a standard estate tax on whatever disorganized stuff is left.
2 Likes
Sure.or you leave 2k in emergency funds and the hassle of dealing with the taxes for a PITA for the dear friend you gifted with the problem.
A trust is just a document (like a will is a document). There are many reasons people draw up trusts including avoiding probate, not having your assets become public record, naming a successor trustee in the event you are not able to act for yourself, and a trust cannot be disputed like a will.
A trust is funded either at death via language in a will (pour over) OR assets get titled (called “funding” the trust) to the name of the trust. So, tax time doesn’t really apply. And I am not an attorney nor giving legal advice…just stating what I believe to be the facts.
Most people draw up revocable living trusts and if assets are titled to it they report under their social security number just like they would if held in their personal name.
I really appreciate this thread because I need to update my legal planning documents and get things updated.
My FIL left a $1200.00 in a trust for a failing church. The way the funds were set up was a mess. We couldn’t sign it over to the church or liquidate easily. I don’t recall the details but a piddly trust might be better off as 10k and handle it.
Mine isn’t. It works pretty much the way PaddockWood described. I’m the trustee so the trust and I, as far as the IRS is concerned, are functionally the same entity. I don’t file any more or any different tax forms than I did before I formed the trust.
1 Like
That was a defect of that specific trust, not a defect of trusts as a general class of legal document.
Sure. But it’s a good heads up to those considering one (don’t leave a PITA).
It would be a good idea to be sure that who ever you use to set up your trust is someone who does them frequently and does their CE (Continuing Education) credits within this subject area. Another individual that may be helpful in keeping the document simple and effective is a CPA.
Also realize that your document may need updating depending on the new regulations regarding your estate.
1 Like
Can anyone give me an idea about costs for creating a trust? I realize “it depends” is probably most accurate, but just wondered if we’re talking $1000, $5000, $10,000? What are some of the factors that impact cost?
Grey
I’ve seen a range in prices to have a trust drawn - from $1500 up to many times that figure depending on complexity.
Our trust was about $1700. I don’t think ours is all that complex scenario-wise, and it didn’t cost extra to have our LLC or the horse and dogs put in it. We tried to make it easily executable.
I am thankful every day that we did the trust. As a personal example of why, my son’s father (my ex-husband) committed suicide the week before Christmas. No will, son was named beneficiary on a couple of things. Son is a minor and the only heir. I cannot put into words how it feels to sort of…skip grief…to start jumping thru probate hoops.
And, it’s true, a will or trust may not exempt everyone from probate processes, but I hope that it will lessen them.
My trust is very simple. I just had to have it amended and updated because I moved to a new state and I wanted to make some pretty significant changes. It was about $1400.
I have a living will that included my bff getting my mare, bff passed, my mare passed. If anything happens to me my pony isn’t in my will. If I had more horses or high dollar horses, I would have my trust ammended. Since my pony is an easy keeper, my husband and son know at this point, that he would go straight to my old boarding barn, he was born there and my mare passed there, the owners are my ride or die friends for life.
Honestly, my husband would most likely come home one day within the week of my passing and my pony would already have been picked up and trailered out. He would automatically shrug and say to himself, “guess A n S already got him”. Honestly they probably wouldnt even contact him, just come and get pony and mention it to him at my funeral.
**Knowing my luck, pony would be loose having jumped the fence for the first time ever and running amok lmao and hubs would assume he was fat n sassy at their barn until my funeral when the “I thought you had him…We thought you had him…” chaos ensued. 😂😂
Jokes aside, unless your family wanted to take over the upkeep, or you have a near and dear horsie friend that you could trust no matter what, having them in your will or living trust is essential. At the very least, write up your wishes, date it, sign it, have it notarized and file it with your lawyer and make sure your family has a copy. I am paranoid by nature so I would do all that AND have it framed and hung in my living room so no one could wonder where that paper with her instructions went.
One option I’ve heard of before, for people who can’t or don’t wish to leave funds for the horse’s possible natural lifespan, is to leave funds for the upkeep of the horse for a specific period. 6 months, a year, whatever it is. Whoever has been designated to take the horse (with their consent, of course) is asked to find the horse a good home if they do not wish to keep it past the upkeep period. I’ve heard of this in particular for show and performance horses. It would be nice if whoever is designated to receive the horse and then re-home it also has the pasture space and was willing to take it back someday, if it needed a soft landing due to age, unsoundness, or whatever. But that might be left to future owners - and yes, this does put the horse’s future somewhat in the hands of the fates.
We thought about this a lot. Our fear, no matter the good intent of a trust, is that the animals could end up in a bad situation. Whatever animals we have when my wife and both die will be euthanized.
