Posted by dewCO on November 13, 2000 at 23:33:02:
Don’t know what the attorney is proposing, but generally putting RE in a trust is a good idea. Check with other RE / estate planning attornies. They usually do a free consultation.
Family Trust - Posted by Jeremy
Posted by Jeremy on November 13, 2000 at 19:02:36:
My attorney says that my dads house and all other assets that he has should be placed in a Family Trust. Is this a good idea? He says it’s a good way to avoid paying excess taxes etc.
Any thoughts on this? It’s the only property he owns and is his residence. It is not an investment property like we all talk about here.
Is this attorney correct with his suggestion?
Jeremy
Re: Family Trust - Posted by Bill Gatten
Posted by Bill Gatten on November 14, 2000 at 18:18:33:
Jeremy,
I’m told that one’s placing a property into a revocable, trustee directed, fully funded, inter vivos trust (family trust) protects the settlor from nothing, other than Probate and estate tax upon his or her death.
To completely protect one’s assets from creditors and prying eyes, he or she needs to have their insurance in an insurance trust, their real estate in a land trust, their personal assets in a personal property trust, etc. They would then be well advised (though not by me, I’m not an attorney) to create a family limited partnership to hold the beneficiary interests in these other trusts and THEN have the whole enchilada held in the family trust.
Also note that saving on income and capital gains taxes, other than by deferment, by using trusts is pretty much a pipe-dream and virtually impossible. You can avoid paying the tax, of course, but when you get audited…then you pay (and then some).
A scenario like the one I described above protects the assets from liens, suits and judgments; but being a “stepped transaction,” it would not fly with the IRS (although one could, I’m told, establish a Charitable Remainder Trust to hold the whole thing) which avoid income tax, cap. gains, and inheritance on all except what is taken to live on.
Tax attorney or accountant. Yep.
Bill Gatten
How is the house owned - Posted by Dave T
Posted by Dave T on November 14, 2000 at 15:32:54:
Is your Dad’s ownership interest as a co-owner in a “joint tenancy with right of survivorship”? If so, then the ownership itself may satisfy his tax avoidance goals and inclusion in the trust may be unnecessary.