Is a RLT the best approach? [Revocable Living Trust]

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Shaneman
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Is a RLT the best approach? [Revocable Living Trust]

Post by Shaneman »

Is a revocable living trust (RLT) the best approach for my situation and should I have the RLT created now?

I am currently in the process of updating my estate planning and looking for input from the BH Community if I am approaching this correctly.

Currently, I have Will, Health Care Proxy, General Durable Power of Attorney, and a Declaration not to artificially prolong life in a terminal condition. These document were all created by an attorney in 2015.

I am in my late 50's, single, just retired and my estate is substantially over the current exemption limits. Last week I had an paid initial conference with a lawyer who is a fellow of the American College of Trust and Estate Counsel (ACTEC) on whether I should be do something now to take advantage of the $11.7M gift tax exemption before it is lowered in 2026 or possibly sooner. After discussions whether my four[4] heirs would benefit from receiving $3M or $1M I decided on the latter since the heirs already have enough and charity would benefit more and not worrying about the federal gift tax exemption. The attorney said since the bulk of my estate is going to charity she recommended just a RLT. If things change in the future the RLT can be changed or terminated while obviously the irrevocable can not.

Currently my abode/domicile is Massachusetts but I do plan on moving to New Hampshire or possibly Tennessee or Florida. Not completely sure I can handle the heat and humidity in TN or FL so I feel NH is the better choice.

I have read many posts on the BH forum and it seems like revocable trusts are more common in community property states which MA and NH are NOT.

Also, revocable trusts seem to be unusual in states where probating a Will isn't difficult. MA follows the Uniform Probate Code ("UPC") adopted in March of 2012 and supposedly makes probate very easy. NH, TN and FL do not follow the UPC and I would assume the RLT would be helpful.

The attorney recommended creating the RLT now since it would centralize the administration of everything, gives more guidance, streamlines everything and simplifies the administration after I pass away. She said the RLT would "follow me" in whatever state I live in.

Also, the RLT would provide the opportunity to dictate what happens if I would become incapacitated and/or unable to pay my bills and who would manage this, making it an easier process for the person I designate. The attorney also mentioned banks don't always accept POA if they are older than 5 years in Massachusetts, but with a RLT the trustee would have the ability to much easier manage the assets.

My intentions would be to leave $1M each to 4 heirs and everything else would be equally divided among 3 charities (Alzheimer's Research, The Salvation Army, my church). I tried using Charity Navigator at https://www.charitynavigator.org to select the best Alzheimer's charity where the money will go to research verses administration & fundraising cost. There are a lot of Alzheimer's 503c charities and any input on the best Alzheimer's charity would be appreciated.

Regarding my church the attorney said she could have the documents directing the money could only be used for the maintenance of the buildings and living expenses for the members that live at the monastery. My point here is I don't want in any way for the Catholic Archdiocese to receive any money due to the abuse cover-ups.

I do have substantial tax deferred retirement accounts and the attorney recommended making these accounts payable directly to Alzheimer's charity and The Salvation Army as beneficiaries since I would not be providing direction how the money is spent for these two charities. I have plenty of other assets to pay my final bills, give to my church and 4 heirs with my taxable accounts.

Again I plan to move out of Massachusetts. COVID has really delayed my plans on moving due to lack of housing inventory and even when I do move the ability to buy items I need for the new home since purchasing new house furnishings have considerable delays. Thus I have just been staying put living in MA.

Setting up the RLT now would provide a vehicle to put the new home I purchase into the RLT verses my name.

Some additional questions to the forum are:
  • Is a RLT a good choice for my situation since the bulk of my estate is going to charity?
  • Whether I should setup a RLT now or wait until I move to another state? Presently all of my assets have beneficiary designation, TOD, POD and the bank accounts are Totten Trusts. The attorney said the RLT is governed by the state you die in for tax purposes and the laws regarding RLT between Massachusetts and New Hampshire are very similar so there wouldn't be a problem going forward with the RLT now.
  • Should I use a charitable remainder annuity trust (CRAT) now since I am in the 23.8% capital gains and dividend tax rate, a 35% marginal tax rate. My taxable accounts generate over $350K in qualified dividends. Thus a CRAT or CRUT I would get a charitable donation deduction to offset the taxes I pay now. I have over $10M in unrealized CG in my taxable account that could fund a CRT.
  • The attorney said she could setup the trust administered under New Hampshire Law and it doesn't matter where I live now, but the new Will states everything pours into the Trust and the POA would still be Massachusetts documents. She said there would be no problem with the Will and POA being Massachusetts documents since once I move to New Hampshire none of it matters and Massachusetts isn't going to tax the estate. Massachusetts does have nasty estate tax once you are one dollar over a million with I think a 5 year look back. So my question to BH is would you create an RLT administered under New Hampshire Law while living in Massachusetts or just wait to move out of Mass?
  • Are there any provisions that a BH member with a RLT forgot to include in their RLT that might be applicable to my situation?
  • Should I consider creating additional trusts at the same time as updating my Will and creating the RLT so there would be some economy of scale since the decision making process is pretty much the same?
The RLT would avoid the probate court costs although the prior attorney that created my present documents claims probate in Massachusetts is easy and low cost. The RLT does keeps assets out of the public view since they never go to probate which is a plus.

I thought about leaving more than $1M each to 4 people but they are all doing well financially and just feel leaving the majority to charity benefits society much better.

Thank you for reading this post and offering any insights on the pros and cons before I give the estate attorney the go ahead to create the RLT.
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nedsaid
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Re: Is a RLT the best approach?

Post by nedsaid »

The biggest reason for a Revocable Living Trust is to bypass probate. Things have changed over the years and at least in my state the probate process can be lengthy. Other than that, nothing magical about them, you just have to get your assets retitled to the trust. The other thing is to have a will in place for personal belongings that will be passed on as well for assets you didn't retitle for some reason. Also remember to check the beneficiaries that you have on retirement accounts such as IRA's and Transfer on Death financial accounts, these need not be put in a trust as the beneficiary designations override everything else. But seeing that a lawyer is preparing all of this for you, I am sure that the T's will be crossed and the I's dotted.

Again, be sure that you retitle your brokerage and bank accounts to the trust. Check with your financial institutions regarding the trust and Durable Power of Attorney. The reason being, you want to be certain that your Attorney-In-Fact or your Trustee will have clear sailing with these firms when your successor in running your affairs or the affairs of the trust need access to your accounts. For example, banks don't always accept Power of Attorney documents. They might just say to your successor, "Who are you?" So work this out ahead of time and this will save a lot of trouble when the time comes.
A fool and his money are good for business.
bsteiner
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by bsteiner »

In the context of an 8 figure estate the cost of creating a revocable trust or the cost of probating your Will is a rounding error. Absent a reason for one I think it’s a distraction.

Probating a Will in Massachusetts (from a recent estate there), Florida (I’ve probated many Wills in Florida) or Tennessee (at least according to Tennessee counsel) isn’t difficult, expensive or burdensome. I don’t know about New Hampshire.
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Lee_WSP
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by Lee_WSP »

Given your situation, you'll need to weigh the benefits of having a successor trustee take over as opposed to a power of attorney against the higher initial costs and the additional accounting.
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Shaneman
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by Shaneman »

Lee_WSP wrote: Mon Oct 11, 2021 8:06 pm Given your situation, you'll need to weigh the benefits of having a successor trustee take over as opposed to a power of attorney against the higher initial costs and the additional accounting.
I feel there are great benefits for myself by having a successor trustee to take over as opposed to a power of attorney. I have read sometimes financial institutions are reluctant to accept POA since the POA was old or one needed to fill out the financial institutions own unique POA form. I am sure everyone reading this thread have heard horror stories of family or friend(s) having to go through Probate. If a RLT can lessen what assets need to go through Probate I haven't heard yet why a RLT would be a bad choice. Please if anyone can give examples why a RLT would be a bad choice I would appreciate you posting them.

Plus with the RLT one avoids having their assets go through the Probate process. Isn't it true most attorneys will charge on the value of assets going through Probate?

Especially after we just experienced COVID-19 and many court houses shutdown for months and those that left just a will needed to wait for the probate court to open and appoint the personal representative.

In addition, the larger the assets going through Probate the more potential for "vultures" to act trying to get something for nothing.

Lee_WSP mentioned "additional accounting". When would the RLT have additional accounting? While I am still living as the Grantor who creates and funded the RLT their shouldn't be any additional accounting? Since the RLT will utilize my social security number for the investments and bank accounts, all of the income related to the RLT would be reported on the Grantor’s tax return. Thus, no separate tax return will be necessary for a Revocable Living Trust, right?

As the Grantor can move assets in and out of the Revocable Living Trust or even terminate the RLT if so desired at anytime.

Again I haven't gave the attorney the go ahead to create the Revocable Living Trust since I am collecting feedback from BH members on the best avenue for my particular situation.

I thank everyone for their feedback and reading the post. Hopefully it will help others in the confusion over Revocable Living Trusts.
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Lee_WSP
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by Lee_WSP »

If a RLT can lessen what assets need to go through Probate I haven't heard yet why a RLT would be a bad choice. Please if anyone can give examples why a RLT would be a bad choice I would appreciate you posting them.
I've already stated the two obvious large negatives (accounting, initial costs, and execution risk). Although there is a third that is less obvious: execution risk. Execution risk is when the plan fails to do what you intended it to do because someone made a mistake somewhere down the line. Ie, your estate or a big chunk of your estate could still end up having to go through probate because you forgot to, titled it wrong, or acquired/sold the property just before death and before you were able to retitle it.

The real question is whether the benefits are worth the effort. Either vehicle (RLT or testamentary trust) will get your assets to the beneficiaries.
Shaneman wrote: Tue Oct 12, 2021 2:34 pm Plus with the RLT one avoids having their assets go through the Probate process. Isn't it true most attorneys will charge on the value of assets going through Probate?

Especially after we just experienced COVID-19 and many court houses shutdown for months and those that left just a will needed to wait for the probate court to open and appoint the personal representative.

In addition, the larger the assets going through Probate the more potential for "vultures" to act trying to get something for nothing.
Some do, some don't. I do not know the percentages either way. But hourly is how you'd want to be billed if you engage the services of an attorney. Which your heirs do not necessarily need to. And even more so in your case since your heirs are charities. IIRC.
Lee_WSP mentioned "additional accounting". When would the RLT have additional accounting? While I am still living as the Grantor who creates and funded the RLT their shouldn't be any additional accounting? Since the RLT will utilize my social security number for the investments and bank accounts, all of the income related to the RLT would be reported on the Grantor’s tax return. Thus, no separate tax return will be necessary for a Revocable Living Trust, right?
Accounting is not preparing a tax return. Accounting means you account for and track and keep records of which assets are in which account. A RLT needs to be treated as though it is an LLC or other separate entity, even though it is a pass through entity. In the way I use it, it also includes the act of making sure the titling is correct as well as the records. Ie, all the i's are dotted and t's are crossed.
bsteiner
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by bsteiner »

Shaneman wrote: Tue Oct 12, 2021 2:34 pm ...
I feel there are great benefits for myself by having a successor trustee to take over as opposed to a power of attorney. I have read sometimes financial institutions are reluctant to accept POA since the POA was old or one needed to fill out the financial institutions own unique POA form. I am sure everyone reading this thread have heard horror stories of family or friend(s) having to go through Probate. If a RLT can lessen what assets need to go through Probate I haven't heard yet why a RLT would be a bad choice. Please if anyone can give examples why a RLT would be a bad choice I would appreciate you posting them.

Plus with the RLT one avoids having their assets go through the Probate process. Isn't it true most attorneys will charge on the value of assets going through Probate?

Especially after we just experienced COVID-19 and many court houses shutdown for months and those that left just a will needed to wait for the probate court to open and appoint the personal representative.

In addition, the larger the assets going through Probate the more potential for "vultures" to act trying to get something for nothing.
...
It isn't a bad choice. It's just that it's a distraction.

Powers of attorney have become routine over the last 20 or so years. Some states (Florida for a while, and New York just recently) provide that if a financial institution doesn't accept one, they can be liable for legal fees in enforcing it. If you're concerned, you could give them copies in advance, and if they want you to do one on their form, you'll have a chance to do that.

I've been doing this for many years and don't know of many horror stories involving probate. Indeed, we've had some protracted disputes and litigations over trusts and beneficiary designations.

Most lawyers work on a time basis. Probating the Will is usually a small part of the work in an estate administration, so the fees will be about the same regardless of whether there's a revocable trust. Indeed, even where there's a revocable trust, there's a good chance the Will will have to be probated anyway, though that's usually not a big deal.

You are correct that when the pandemic hit, it took longer to deal with the courts. We had one estate in Queens last year which was the center of the pandemic, and they had far more than the usual number of new estates. It was an intestate estate, so it went to the administration department rather than the probate department, and one of the clerks there explained that given the demographics of Queens the administration department was even more swamped with new estates. If the 100 years between the 1918-19 pandemic and the current one is any indication, the next one will be in 100 years from now, and won't affect anyone reading this.

I don't know what you mean by vultures. The only persons who may contest a Will are the persons who are adversely affected by it, in other words the persons who would get more money if the Will were not admitted to probate. The same persons may contest a trust.

Notwithstanding the above, revocable trusts make sense in some cases and in some states. Probating a Will and dealing with the court is said to be difficult in California. The court fee in Delaware is 1.75% of the estate, not counting real property. Florida requires that a personal representative be a relative or a Florida resident, so if someone's first choice can't qualify, a revocable trust is a workaround. Some states don't tax trusts if there's no trustee in the state or if the trust isn't administered in the state, so if you expect your estate to receive a large amount of income during the administration period, a revocable trust may avoid state income tax.

There may still be a few states that require trustees of a testamentary trust to file periodic court accountings and don't let you waive that either in the Will or by consent of the beneficiaries. If you're in such a state a revocable trust may make sense to avoid that.

Depending on the state, if you don't know who your closest relatives are, or where they are, a revocable trust may avoid having to search for them.
LSLover
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by LSLover »

bsteiner wrote: Tue Oct 12, 2021 3:22 pm
Shaneman wrote: Tue Oct 12, 2021 2:34 pm ...
I feel there are great benefits for myself by having a successor trustee to take over as opposed to a power of attorney. I have read sometimes financial institutions are reluctant to accept POA since the POA was old or one needed to fill out the financial institutions own unique POA form. I am sure everyone reading this thread have heard horror stories of family or friend(s) having to go through Probate. If a RLT can lessen what assets need to go through Probate I haven't heard yet why a RLT would be a bad choice. Please if anyone can give examples why a RLT would be a bad choice I would appreciate you posting them.

Plus with the RLT one avoids having their assets go through the Probate process. Isn't it true most attorneys will charge on the value of assets going through Probate?

Especially after we just experienced COVID-19 and many court houses shutdown for months and those that left just a will needed to wait for the probate court to open and appoint the personal representative.

In addition, the larger the assets going through Probate the more potential for "vultures" to act trying to get something for nothing.
...
It isn't a bad choice. It's just that it's a distraction.

Powers of attorney have become routine over the last 20 or so years. Some states (Florida for a while, and New York just recently) provide that if a financial institution doesn't accept one, they can be liable for legal fees in enforcing it. If you're concerned, you could give them copies in advance, and if they want you to do one on their form, you'll have a chance to do that.

I've been doing this for many years and don't know of many horror stories involving probate. Indeed, we've had some protracted disputes and litigations over trusts and beneficiary designations.

Most lawyers work on a time basis. Probating the Will is usually a small part of the work in an estate administration, so the fees will be about the same regardless of whether there's a revocable trust. Indeed, even where there's a revocable trust, there's a good chance the Will will have to be probated anyway, though that's usually not a big deal.

You are correct that when the pandemic hit, it took longer to deal with the courts. We had one estate in Queens last year which was the center of the pandemic, and they had far more than the usual number of new estates. It was an intestate estate, so it went to the administration department rather than the probate department, and one of the clerks there explained that given the demographics of Queens the administration department was even more swamped with new estates. If the 100 years between the 1918-19 pandemic and the current one is any indication, the next one will be in 100 years from now, and won't affect anyone reading this.

I don't know what you mean by vultures. The only persons who may contest a Will are the persons who are adversely affected by it, in other words the persons who would get more money if the Will were not admitted to probate. The same persons may contest a trust.

Notwithstanding the above, revocable trusts make sense in some cases and in some states. Probating a Will and dealing with the court is said to be difficult in California. The court fee in Delaware is 1.75% of the estate, not counting real property. Florida requires that a personal representative be a relative or a Florida resident, so if someone's first choice can't qualify, a revocable trust is a workaround. Some states don't tax trusts if there's no trustee in the state or if the trust isn't administered in the state, so if you expect your estate to receive a large amount of income during the administration period, a revocable trust may avoid state income tax.

There may still be a few states that require trustees of a testamentary trust to file periodic court accountings and don't let you waive that either in the Will or by consent of the beneficiaries. If you're in such a state a revocable trust may make sense to avoid that.

Depending on the state, if you don't know who your closest relatives are, or where they are, a revocable trust may avoid having to search for them.
Bsteiner, very helpful explanation. Thank you.

Not sure though if the trustee is a corporate entity with the situs in one of those states, how does this work from the standpoint of state income tax? Any difference between a person vs. corporate trustee?

Also, it seems like you are drawing a distinction between a testamentary trust vs a RLT from the standpoint of the state income tax because you said that RLT may avoid taxation of distributions during the administration period. Is that (state tax avoidance) not the case for the testamentary trust?
bsteiner
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by bsteiner »

LSLover wrote: Tue Oct 12, 2021 3:49 pm ...

Bsteiner, very helpful explanation. Thank you.

Not sure though if the trustee is a corporate entity with the situs in one of those states, how does this work from the standpoint of state income tax? Any difference between a person vs. corporate trustee?

Also, it seems like you are drawing a distinction between a testamentary trust vs a RLT from the standpoint of the state income tax because you said that RLT may avoid taxation of distributions during the administration period. Is that (state tax avoidance) not the case for the testamentary trust?
Thanks for the kind words.

In the case of a corporate trustee, different states have different ways of dealing with that.

A few states that tax trusts created by a resident won't tax such a trust if there's no trustee in the state, no real or tangible property in the state, and no income from sources in the state. In the case of Illinois and Pennsylvania, that exception applies to trusts created during lifetime, but we don't yet know whether it applies to trusts created by Will.
fourwheelcycle
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by fourwheelcycle »

My wife and I have now "lived" with our joint RLT for six years. It has been very easy to live with, and we have not experienced any extra accounting tasks or costs. Perhaps we were fortunate that Vanguard transferred our previous non-retirement account holdings to our RLT with no problems, that BoA transferred ownership of our checking account to our RLT after one brief visit, and our attorney handled re-titling of our house to our RLT as part of his fee for the RLT. Our attorney also prepared pour over wills that give any overlooked assets to our RLT, and a Deed of Gift that gives our house contents, and our cars, to our RLT. We have streamlined our investments to a simple two fund portfolio, and we are quite sure we have no overlooked assets that are not in our RLT.

Our cost to set up the RLT, with an ACTEC Fellow attorney, was no different than the cost would have been to set up a will with the same provisions for various contingencies, such as one or both of our adult children dying near in time to us and leaving minor descendants. Comments by attorneys often focus on probate costs, which we agree are not significant in many states. However, we chose an RLT for the convenience of our executor and successor trustee, who does not live in our state, and to enable our successor trustee to become a co-trustee and assist us in managing our finances and other affairs if the need arises as we become older.

Based on my experience managing the affairs of my aunt, as co-trustee of her RLT, and my father, as his POA, an RLT presents fewer problems. BoA and Vanguard helped us set up checking and investment accounts for my aunt's RLT with no problems or delays. My father's local bank said they have no provisions for POAs and advised him to make me joint on his account. BoA challenged my father's POA as being "too old" and wanted him to execute a new one. Vanguard did not even want to see my father's POA, they just asked him to sign their form to give me full transaction authorization.
increment
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by increment »

Shaneman wrote: Tue Oct 12, 2021 2:34 pm I have read sometimes financial institutions are reluctant to accept POA since the POA was old or one needed to fill out the financial institutions own unique POA form.
With an RLT, you need to move assets into trust accounts now, instead of planning to present the PoA later. That will certainly involve filling out forms to open new trust accounts. But you could just fill out those PoA forms now, instead.

If you add or remove trustees later, the trustees will likely have to fill out new application forms (so again that may be comparable with having to file paperwork to add or remove attorneys-in-fact). Probably by institutions' terms and conditions, changes in trustees need to be communicated ASAP.
RetiredAL
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by RetiredAL »

My Dad, has a RLT. We are in Ca. When he turned the Trusteeship over to me, we had no issues. Just some forms to submit. Do note that his banking/savings is not in the Trust, but I am joint on those accounts, so this was brokerage or direct Mutual Funds.

I did have major issues with my POA over his 2 Wells Fargo Brokerage IRA accounts. We went back and forth for several months, this form, that form, his legal POA, their POA and RMD's for that year got missed. During the middle of all this, he took ill and I had to step up 100% to take care of his affairs. After fighting WFA for 4 month over first transitioning the IRA's to Wells Trade Account, then the POA issues, the solution was that I contacted the local Schwab offcie who said "no problem", and those account were sucked over the Schwab where I finally could solve the RMD issues, albeit late. As Trustee, I had zero issue taking the Taxable Trust Account to Wells Trade status. In fact, his Advisor had for 5 years taken instructions from me over both the IRAs and the Trust Account, until his Advisor left the Wells Platform and we chose not to follow him. Advisor-less, WF couldn't get out of their own way because of their own internal rules of no IRA Advisor could transgress on the ground of another Advisor, even when that Advisor no longer existed.

While fighting WF, I discussed the WF issues with my Dad's Lawyer who said they were very picky and that he had on occasion had to get court orders regarding WF accepting a POA's.

Of note, about 6 weeks after I had given up and had already successfully transferred the first IRA, I got a letter from WF acknowledging my POA. Too bad for them, the day before I had submitted on-line paperwork to Schwab to transfer the second IRA.

So, my Trustee change experiences were all good, and the POA with WF was a nightmare. The POA filing with USAA went off hitch-less.
557880yvi
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by 557880yvi »

Shaneman wrote: Mon Oct 11, 2021 3:45 pm
  • Should I use a charitable remainder annuity trust (CRAT) now since I am in the 23.8% capital gains and dividend tax rate, a 35% marginal tax rate. My taxable accounts generate over $350K in qualified dividends. Thus a CRAT or CRUT I would get a charitable donation deduction to offset the taxes I pay now. I have over $10M in unrealized CG in my taxable account that could fund a CRT.
There are numerous strategies that can be employed - CRAT's (An annuity trust pays a fixed percentage of the initial value) and CRUT's (pays a specified percentage of the trust assets as revalued each year), assets remaining upon death are transferred to the charity. Be aware that these are IRREVOCABLE trusts and the assets transfer to the beneficiaries to manage - you give up ownership and control of the assets. If one is very comfortable that other assets and the income from a CRAT or CRUT is sufficient for all your remaining needs, they can be effective in both reducing tax liability while contributing to charity. Some can also be combined with a DAV (Donor Advised Fund). Here are a few articles that do a good job, in plain language of explaining what they are, and the pros and cons.

https://www.fidelitycharitable.org/guid ... rusts.html

https://www.forbes.com/sites/jlange/202 ... ed508232fe

https://www.bbvausa.com/wealth/wealth-s ... trust.html

Also, from very recent experience, POA's have become quite a challenge to use. Most organizations will no longer accept a general POA created from an estate plan. We encountered this with medical entities, assisted living, nursing home, financial institutions (Bank, Broker and CU), all wanted a new one specifically for only what their role was, on their forms, and all the financial institutions required a medallion guarantee. This becomes an incredible challenge when the person who granted you the POA becomes incapacitated. With a RLT one can avoid many of these issues (saved the day when one relative developed dementia very quickly due to a rapidly progressive disease - we could not have sold their home - needing the funds for their care - if the home had not been in a trust. We were told their POA was useless and since they were now incapacitated, the were not competent to prepare new ones.)
afan
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Re: Is a RLT the best approach? [Revocable Living Trust]

Post by afan »

RetiredAL wrote: Tue Oct 12, 2021 7:42 pm My Dad, has a RLT. We are in Ca. When he turned the Trusteeship over to me, we had no issues. Just some forms to submit. Do note that his banking/savings is not in the Trust, but I am joint on those accounts, so this was brokerage or direct Mutual Funds.

I did have major issues with my POA over his 2 Wells Fargo Brokerage IRA accounts. We went back and forth for several months, this form, that form, his legal POA, their POA and RMD's for that year got missed. During the middle of all this, he took ill and I had to step up 100% to take care of his affairs. After fighting WFA for 4 month over first transitioning the IRA's to Wells Trade Account, then the POA issues, the solution was that I contacted the local Schwab offcie who said "no problem", and those account were sucked over the Schwab where I finally could solve the RMD issues, albeit late. As Trustee, I had zero issue taking the Taxable Trust Account to Wells Trade status. In fact, his Advisor had for 5 years taken instructions from me over both the IRAs and the Trust Account, until his Advisor left the Wells Platform and we chose not to follow him. Advisor-less, WF couldn't get out of their own way because of their own internal rules of no IRA Advisor could transgress on the ground of another Advisor, even when that Advisor no longer existed.

While fighting WF, I discussed the WF issues with my Dad's Lawyer who said they were very picky and that he had on occasion had to get court orders regarding WF accepting a POA's.

Of note, about 6 weeks after I had given up and had already successfully transferred the first IRA, I got a letter from WF acknowledging my POA. Too bad for them, the day before I had submitted on-line paperwork to Schwab to transfer the second IRA.

So, my Trustee change experiences were all good, and the POA with WF was a nightmare. The POA filing with USAA went off hitch-less.
I had similar experiences when I was helping an elderly person. I was trustee of an incompletely funded RLT and I had a durable POA. For the assets in the trust, all I did was prove that I was the person who was named as co-trustee (I think I faxed my driver's license). For the DPOA for accounts not held in the trust, not a single financial institution accepted it. NOT ONE. Some of the banks had branches in my area but insisted I go to the branches where the accounts had been opened in the state where the person lived. That meant that when I went to visit them I had to waste time going in person to the banks. Not that this accomplished anything. They still refused to honor the DPOA. I suppose we could have taken each bank to court to force the issue.
As with your situation, it was much easier to have the elderly person transfer the accounts to the broker that held the trust assets. We were lucky to get that started while the person was still able to do that.

The DPOA was completely useless for doing the thing for which it was intended. I suppose if I had made enough copies, they would have been helpful if I wanted to start a fire.
RLT- no problems at all.
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RetiredAL
Posts: 3537
Joined: Tue Jun 06, 2017 12:09 am
Location: SF Bay Area

Re: Is a RLT the best approach? [Revocable Living Trust]

Post by RetiredAL »

afan wrote: Sun Oct 17, 2021 1:04 pm
RetiredAL wrote: Tue Oct 12, 2021 7:42 pm My Dad, has a RLT. We are in Ca. When he turned the Trusteeship over to me, we had no issues. Just some forms to submit. Do note that his banking/savings is not in the Trust, but I am joint on those accounts, so this was brokerage or direct Mutual Funds.

I did have major issues with my POA over his 2 Wells Fargo Brokerage IRA accounts. We went back and forth for several months, this form, that form, his legal POA, their POA and RMD's for that year got missed. During the middle of all this, he took ill and I had to step up 100% to take care of his affairs. After fighting WFA for 4 month over first transitioning the IRA's to Wells Trade Account, then the POA issues, the solution was that I contacted the local Schwab offcie who said "no problem", and those account were sucked over the Schwab where I finally could solve the RMD issues, albeit late. As Trustee, I had zero issue taking the Taxable Trust Account to Wells Trade status. In fact, his Advisor had for 5 years taken instructions from me over both the IRAs and the Trust Account, until his Advisor left the Wells Platform and we chose not to follow him. Advisor-less, WF couldn't get out of their own way because of their own internal rules of no IRA Advisor could transgress on the ground of another Advisor, even when that Advisor no longer existed.

While fighting WF, I discussed the WF issues with my Dad's Lawyer who said they were very picky and that he had on occasion had to get court orders regarding WF accepting a POA's.

Of note, about 6 weeks after I had given up and had already successfully transferred the first IRA, I got a letter from WF acknowledging my POA. Too bad for them, the day before I had submitted on-line paperwork to Schwab to transfer the second IRA.

So, my Trustee change experiences were all good, and the POA with WF was a nightmare. The POA filing with USAA went off hitch-less.
I had similar experiences when I was helping an elderly person. I was trustee of an incompletely funded RLT and I had a durable POA. For the assets in the trust, all I did was prove that I was the person who was named as co-trustee (I think I faxed my driver's license). For the DPOA for accounts not held in the trust, not a single financial institution accepted it. NOT ONE. Some of the banks had branches in my area but insisted I go to the branches where the accounts had been opened in the state where the person lived. That meant that when I went to visit them I had to waste time going in person to the banks. Not that this accomplished anything. They still refused to honor the DPOA. I suppose we could have taken each bank to court to force the issue.
As with your situation, it was much easier to have the elderly person transfer the accounts to the broker that held the trust assets. We were lucky to get that started while the person was still able to do that.

The DPOA was completely useless for doing the thing for which it was intended. I suppose if I had made enough copies, they would have been helpful if I wanted to start a fire.
RLT- no problems at all.
Last year, we ran into similar issues trying to add my Son to my Dad's banking accounts as part of creating a line-of-procession, so it was not just me. They want all three of us in the same branch at the same time. In the middle of CA's Covid lock-down, Dad in locked down Assisted Living, son and I in different towns about 100 miles away from Dad. Finally a Branch Manager arranged for Dad and I in one location and Son in another. Then their remote-location processing people rejected it because that faxed over ( branch to branch) was not the original of Dad's and mine signatures. I had to mail that to my Son to take to his branch to add his signature.
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