Need info on Revocable Living Trust - Posted by Patrick in MD

Real Estate Investing
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Posted by Frank Chin on September 21, 2005 at 08:16:45:

Patrick:

If you do a little "Google"ling, you’ll find a bunch of articles on Reovocable Ilvings Trusts. See:

http://www.extension.umn.edu/distribution/businessmanagement/DF6313.html

My mother in law, my mom and dad in their 80’s, and sporadically not in the best of health. We also had a family friend who passed a away a few months back, was in very bad health for the last 10 years of his life. He placed his home in a “Revocable Living Trust”. My wife, and a family friend, and a realtive of his, were named “co-trustees”.

Although he had a will, it only addresses issues upon his death. But in the meantime the trustees, depending on the conditions set forth in the trust can do all of the things the person can do if the he is incapaciated. So the trustee can come in, have a roof put in, sidewalks repaired, or even get a mortgage while the person is incapaciated.

We even discussed what if mom became incompetent, went to a nursing home, doesn’t need her home. Who has the authority to sell the place, or even rent it out to tenants?? A will is of no use here.

My dad owns a commercial property, had a major operation, then went to rehab for over 6 months. Meanwhile, one of his tenants stopped paying rent. Despite giving my brother full “Power of Attorney”, my brother, because of a technicaity, had trouble legally going forward with eviction proceedings, in my dad’s behalf. I haven’t been told the exact reason why, though I asked. The matter could have been easily facilitated if my brother was a trustee.

Looks like your dad is at an age where it is useful to have a trust, and have things taken care of if he can’t.

Frank Chin

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Need info on Revocable Living Trust - Posted by Patrick in MD

Posted by Patrick in MD on September 21, 2005 at 24:28:50:

I searched the archives and found only a basic definition of a Revocable Living
Trust. I am an investor wannabe/newbie and I am specifically looking for
something that I could give to my father. My 74 year old parents are buying
another home very soon and will own three pieces of real estate when the
purchase is complete. They will then sell one of the three properties after
settling on the new house. (They are not investors.) My parents already have
a Will, but from what I’ve learned a Revocable Living Trust – with Durable
Power of Attorney – is preferable to a Will in terms of “Ease-of-Use,” making
changes, etc. My father, the only one of my parents who feels he has the
savvy to understand things like real estate, is certainly lucid but he is
gradually becoming more forgetful. Hence my desire to give him some good
information on Living Trusts now.

Patrick Cosgrove

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Re: Need info on Revocable Living Trust - Posted by Dons

Posted by Dons on September 21, 2005 at 11:21:07:

An estate planning attorney can set this up for your parents. It is a standard estate planning tactic. There may be tax planning advantages to it depening on the federal estate tax exemption in years to come, and the revocable living trust will keep their estate out of probate.

Usually it will be set up as two trusts…one for each of your parents…called an AB trust with each one being the trustee for the other. However it will also name a successor trustee in case either or both should ever become unable to handle their own affairs.

My parents set this up years before they passed, and it was a Godsend for me years later. A few years after they set up their trusts, my mother had to go into a nursing home because of her dementia…dad could no longer care for her…she had become mad as a hatter.

A year or so later dad died at which time I (as successor trustee) automatically became in charge of mom’s affairs and could sign their checking account and pay her bills. (At that time the nursing home was $60,000 a year plus medicine.) When mom died, the estate planning done in setting up the trust made life much simpler for me as executor of their estate, and kept it out of probate.

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Re: Need info on Revocable Living Trust - Posted by Don

Posted by Don on September 21, 2005 at 09:41:51:

Yes, there are a lot of advantages to a revocable living trust for estate planning purposes. Although there’s some good information on this site and elsewhere on the Web about using trusts for real estate, the better approach probably would be to work with a lawyer familiar with trusts and estate planning. There are a number of other non-real estate documents (durable power of attorney, living will, etc.) that all can work together.

Good luck.