I am the only child of an aging parent age 91, who lives alone, and her caretaker. She will have to move in with me soon. I see many people on this forum, have established a trust. My mother has a will, and I am the POA. Her attorney has never mentioned a trust. What is the benefit, and is that what most are doing now? Is that mostly for people with lots of money, My mother does not have a large savings, but does have a home we will have to sell eventually.
It depends on the assets. If you are under a certain limit, about 100K where I am, a will does not have to go through probate. If you are over, you do. With the assets you have listed, I would think a will needs to go through probate court.
There are other ways to avoid probate. Having beneficiaries on a bank account should avoid probate for that account. Having a transfer on death deed should avoid probate on a house if your state has that.
Be aware of precedence. Beneficiaries on a account take priority over a will. So even if the will says that bank account X goes to "Joe". If the account has "Mary" listed as the beneficiary then "Mary" gets it and "Joe" gets nothing.
Example, my Dad died back in mid 2016 and I am still in Probate. Dad had a Revocable Trust but had dragged his feet on getting the assets placed into the Trust. So those dangling assets that didn't make it into the Trust are causing the long delay.
so a person who doesn't have a trust has to spend 25,000 for probate? even if they have a will? No wonder everybody is touting these trusts. I thought they were for the wealthy, but all these seminars are being promoted, I guess that's why. It is all very confusing to me.
Not only did we do a trust and transfer deed to home, all cash and investments in to DW's name and ownership, but we did DPOA, Advance Med Directives, Pour over Wills, we also met with an Elder Care Attorney who told us everything has been done that could be done for our family and is compliant with Virginia Law as of now. We spent about 4500.00 total for all of this legal work. The advice we received was worth every penny.
Yes, there is an 8 year age difference between me and my DW. We were able to get LTC, with GPO required once every four years if we want to keep it up with inflation. It costs about 61.00 a month for her. Yes, I regret not taking the time to go over the head of the agent that wouldn't sell LTC to me. Straight answer he didn't see it as beneficial to him. Sad thing is on all of the other products he sold us, he made a fortune.
I encourage all of you to encourage your young adult children to buy LTC while their young, as soon as they are established in a career. The younger you are the cheaper it is. In the case of my DW, she bought in at a time their was no limit on the number of years she can collect for, and if she doesn't have to use it at all, the insurance company with pay back cash value accrued at the time of her death back to the Trustee at that time. I say yes establish a Trust sooner rather than later. You can protect your surviving spouse from abject poverty.
Regardless with just a will and large assets, such as a house or big pile of money, you will be going to probate. Probate will cost about $25,000. With a trust or other planning you can avoid probate.
Here is a thread I started a couple of days back talking about the same issues.
https://www.agingcare.com/questions/with-a-simple-estate-any-need-for-a-trust-anymore-to-avoid-medicaid-recovery-435721.htm
Now special needs trusts, those to me can totally make sense.
But SNTs need to be structured so that they can be Medicaid compliant in case Medicaid needs to be applied for. Mom could run out of $ and you run out of ability to continue to caregive as her needs increase, so Hello Medicaid.....
Not to sound all EmpressCarlotta to you, LadyDi, but to me, a real trust needs close to 1M and there are assets within the trust that provide for an income stream to pay for all items titled in the trusts name and any costs to maintain trust. So trust has house or land which has costs but also has investments (& financial advisor) that produce enough income to cover all property costs, trust management and continue into future. Trust eventually defunds but long long after mom has died, so it’s a issue for your kids.
To me, if you really could care less about mom continuing to own her home; there’s no unique to your family situation for keeping house; and mom’s ok about moving out & in with you, sell house at FMV this year. If it’s looking like she’ll end up with over 300/250k, I’d suggest mom does do SNT. Under that, I’d just park it in her savings account and transfer into her checking as needed for her care and her needs exclusively. Either way I’d suggest you have an elder law atty do a personal services contract between mom and you so that mom in some way compen$ate$ you for caregiving and living with you and it’s paid through the SNT. Not a DIY but drawn up by atty. as it needs to be Medicaid compliant. You never know, really mom could outlive her $ and she’ll need to apply for LTC Medicaid as the her level of care is beyond what you can continue to do.
The 300/250 is likely what the 2- 2.5 average years stay (till death) in a NH will cost for room & board and usual expenses.
One of the experts on this site, Gabriel Heiser, has a really great book on how to look at the situation you & your mom are in. It’s called “Medicaid Secrets”. On Amazon and I found it at my library. Dealing with Medicaid and Medicare is quite a maze and it’s good to have a go to guide which this book does.