What is a family trust and why should I have one?
chill asked:
I have heard of my friends and neighbors having their homes in ‘trusts’ or family trusts. What are the advantages of having a trust and why should my family have one?
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I have heard of my friends and neighbors having their homes in ‘trusts’ or family trusts. What are the advantages of having a trust and why should my family have one?
Caffeinated Content
Broke_Daddy:
What they most like have is a Revocable Living Trust. They place their assets into the trust, including their house, auto, and bank accounts. When they pass away, the trust becomes an Irrevocable Trust.
March 20, 2009, 10:44 pmAt that point, the first Trustee, as named in the trust, is responsible to divide or assign the assets of the trust as designated in the trust.
You usually have to set up a bank account for this with a tax ID.
The bank can/wil help with this. Most trusts are boilerplate type things (standard) and require a 90 waiting period before disbursement. The Trustee is responsible for keeping track of expenses during that time, such as upkeep on the property, etc., because it affects taxes. A trustee would need the services of an accountant to file the proper tax forms at the end of the year.
They’re pretty voluminous.
As for the benefits, it prevents the property from going into probate, which requires court hearings, and assignments. It can also prevent arguments over the way things are handled as to the disposition of the property.
Costs of setting up a trust can run from $500 (where you have to file some of the forms, such a Quit Claims) to $1500 or so, where everything is done for you.
Be sure to research before you jump. Ask the people who’ve already got one about it. They’ll certainly recommend the people who set it up for them.
Good luck.
James G:
A Revocable Living Trust is the best. This way you can make changes if it is desirable in time. If you have a Trust then you can specify who gets what. Also it will not be probated.
March 24, 2009, 8:04 am