9 Revocable Living Trust Mistakes
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- Опубліковано 15 вер 2020
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One of the most talked about areas of estate planning is the concept of individuals, couples and families using a revocable living trust program to avoid the court and attorney involved probate process that is necessary when someone dies with certain assets titled in their name.
While it can be a beautiful thing when the living trust program eases the estate settlement after the Settlor of the trust dies, mistakes can be made that make matters more difficult. And when mistakes are made, things may not work out as planned.
Mistakes made when taking advantage of a revocable living trust program include failing to fund the trust, having the trust instrument poorly written, thinking revocable living trust assets are protected from nursing homes and creditors, failing to understand the relationship between last wills, trusts, and beneficiary designation items, and failing to keep your trust updated when necessary.
This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.
Paul Rabalais
Estate Planning Attorney
9 Mistakes Not to Make with a Revocable Living Trust
1. Failing to Fund the Trust
2. Having a poorly written Trust
3. Mistakenly thinking that Revocable Living Trust assets aren't used for Nursing home expenses
4. Mistakenly thinking that Revocable Living Trust protects you from liability/creditors
5. Not having ancillary documents in support of Trust (power of attorney, durable power of attorney, successor trustee, pour over will)
6. Not realizing your Trust doesn't control where your IRA, Life Insurance, Annuities go when you die
7. Naming your Trust as the beneficiary of your IRA when you don't need to
8. Failing to update your Trust when something changes
9. Failing to subscribe to this channel
Wow, some good points. We got a pour-over will into a Testamentary Trust attorney who said funding trust was not needed? NJ probate is very efficient not like some other states.
How do I update trust when I have already paid attorney and he didn’t add my car or pension
@@reberyan7879 I never heard why a car would be in a trust may be some very valuable car. I have an NJ pension only your spouse gets half the pension when she dies finished like Social Security. I'm not sure about kids under 26 y/o far as pension benefits depend on your state.
@@reberyan7879 It sounds like it's a trust "funding" issue as opposed to the actual language in the trust document to get your vehicle in your trust and to set up the beneficiaries of your pension the right way. I'm not sure what state or jurisdiction you are in, but it might be worth a call to your attorney to see if in fact anything needs to be changed in your documents.
Thanks for the summary. 😀
I transfer what I can to my grandchildren now. In the past I had it set up that they would inherit funds and then I realized it is now that they can use the help.
Agreed
Awesome Grandfather!
Absolutely. You can show them how to spend and invest. You can give or receive tax free as long as it's not more than 15K a year.
So true! I helped a son buy his first house. It means a lot more now and truly can be life changing !
@@jesse957 not awesome, leave the money to his own children. Don't skip generations.
Thank you! I’m binge watching your videos!❤️❤️❤️❤️
I just started watch your videos ,it is very timely information for me and I appreciate it.
Look forward for seeing more of it.
Ipe.
Thank you very much for creating this video. I needed it as I am having these conversations with my family now.
Great information! Looking forward to the next video!
Yes, thankyou for getting this out…
I have been tuned in to quite a few of your videos. Very informative. 🙏🏽
LOVE mistake #9! Mistake avoided!
Thank you so much. You’re wonderful for helping us!
Thank you SO much! This has been so helpful
Thank you sir I can understand almost everything when you explain it....
Awesome info. I am about to setup a living trust and this info is exactly what I needed to know. Thank you.
great video. i love your commitment to educating our friends and family...doing all you can to help people and save families from aggravation, expensive costs, and time.
Awesome information! Thank you!
Great presentation! Thanks...
This was such a helpful video thank you!
This was super helpful. Thank you for the concise information
Thank you for this video!
really simple , informative , and practical THANKS
You got me there. Mistake #9.
RLT is great. Walked into bank with copy of trust, parent's death certificates, my id. 5 minutes later, "what would you like to do with your account sir".
Great information. I learned from it. Didn't make mistake #9.
Love #9 :) Thanks for a great video Paul!
Thank you, the video was very helpful and the comments provided real insights.
Great content!
Love your videos 😃and of course no 9 is the most important mistake 😃thank you for the advice have a blessed day ❤
Thank you a lot for this video. This is very interesting and informative. Keep posting like those amazing videos, this is awesome.
You are Ammmmaaaaazing ! Thank you👍👍👍👍👍
Very informative video thank you for these tips and advice.
Love that 9th tip. Took me off guard. I laughed out loud. What a great closing. Loved it.😍
Thank you from Central Florida
Sure thing Central FL! 😎
This needs to be taught in schools . Thanks for all of the great information.
Thank you for the information
Nice buildup of suspense on #9, LOL. Had me on the edge of my seat.
It's a great idea to include updates and changes in the contract ,
Better than some others i've seen.
Thank you for your educational and informative channel. New subscriber 🙌
God bless you for doing what you do
OK, sir, this is the third video that I watch from your channel since yesterday. I won't make the # 9 mistake. So here you go I'm your new subscriber.
BTW my mother-in-law passed away last September (my father-in-law passed away in 2000). My wife is in the middle of processing the transfer of the living trust that they left (2/3 ownership of the house) to her name. We were so glad that her late parents had a living trust (written about 25 years ago) transferring their ownership to her.
Just sharing our experience on living trust.
Great info, also get a trust before demensia sets in .
great show
I gave you a thumb up subscribed and forwarded your outstanding videos. Thank you for your training
Loved no 9!
Number 9...Awesome!
Awesome, thank you.
Thanks so much for this video!! A living trust does not necessitate any probate procedures. When the Trust Deed's events, such as death occur, the Trustee is instantly empowered to administer the deceased's assets.i am Currently living smart and frugal with my money. Saving and investing lifestyle in the financial market made it possible for me this early even till now earn monthly through passive income.
I review all my financial affairs at the beginning of each year. I also go over those affairs and my final wishes with my children at that time so they are well informed and they each understand my final plans
You're amazing..!
I will not make mistake number nine. Thanks so much
Good stuff!
Thanks, great video. Please make another one; the "Best way to protect the assets from Nursing homes"
Great vid! Thanks.
Good information
Thank you so much
Thank you! I took tons of notes! My Dad created a RLT in 2012 and thought he'd done a great thing. After the last 3 years in assisted living, he caught CV-19 from staff and died in Oct 2020...leaving me with figuring out the labyrinth of RLT he left behind. He was never great with details so "funding the Trust" was the biggest kink to work out. I now want to be sure I AVOID leaving those headaches to my daughter when my time comes. Your videos are now on my "to do" list!
This Jan we had same issues. Nothing was actually placed in the trust.
rip to your Dad💙
@@ruthtorphy2204 I'm having issues now with one of my mom's accounts that wasn't placed into the Trust. The institution that holds it seems unable to understand the Pour Over Will document that is part of her trust. This allows whatever was not placed into the trust in the trust after death with a small account affidavit. Somehow they are still having their lawyers disect it or they are incompetent.
Your better off not owning anything, it’s costs money and you don’t know if the law will change
Thank you for summarizing many issues and or mistakes associated with establishing either joint or individual revocable living trusts. I have stumbled through many of these issues and others.... in my quest for the right combination of vehicles to use to satisfy my personal and unique concerns. If anyone is detail oriented and able to reason thru these various situations, there comes a point where one needs to take some action and decide what vehicles to put in place and do the follow thru necessary. So having said that how does one go about brining all of the concerns you have raised along with ones they have you did not cover and taking appropriate action and get it done! It will never be perfect but without action it will never be done. So is there a master checklist that in theory will bring one to that point of taking action?
Thanks for the sharing. I liked and subscribed, at least the 9th mistake nit applicable for me 🤭🤭🤭 I will digest the other 8 mistakes, since I just set up my family trust.
#9 was my favorite
Step #9 cleaver, subscribed
This is great
thank you.
You are awesome!
Thank you
Just now corrected the 9th one ! HARI NAM !
lol! loved the finale
Thank you so much for doing a good deed which really what you are doing is giving back to communities for free!
As always, what's good with tons of knowledge/power and not sharing & using power to make a difference to the world we live in?
Your sharing of your insights & knowledge is greatly appreciated!
Great content! Thank you for your insights on mistakes in preparing a living trust.. quick question, I hear and have read that there are attorneys that say don’t put your real estate in a living trust?
I just met with an estate planning lawyer last week and went in assuming I'd create a Trust (side note, if pay a few thousand for them to write a trust the language better damn well be correct) anyway, htey mentioned something that I hadn't heard of before for a home, a Beneficiary of Deed, instead of creating a trust, I left totally confused and the pros and cons of a BOD vs. a Trust, other than the fact it cost double to write a trust.
What the trust doesnt own can fall into probate . This is why its great as people age and dont earn as much money to have updates & changes included in the contract signed by your attorney , it's better also to have a firm so that your atty goes into a nursing home etc there is backup .
thanks dude!
No problem!
You are so cute on mistake #9 !
Mistake #7 is spot on, and in my opinion you are exactly correct and gave an ethical and honest description of when it makes or does not make sense. Too many people name their trust as the beneficiary of their IRAs when there is no need to do so. Unfortunately, many times they do that because their attorney recommended they do it....especially when the attorney has convinced the clients to list the attorney as co-trustee in the document and will be collecting his/her fees down the road. And of course that fee is typically based on the size of the trust, so some attorneys want to direct any and all assets to the trust to increase their future fees. I have seen this many times in practice and it’s “funny” how it occurs with the same attorneys over and over.
Thanks ouattorney did just that, so we need to change that by amendment or reinstatement?
Yep, it need to be irrevocable trust to be isolated from the government considering it as your assets.
You missed a few mistakes. It dose not surprise me but still you did a good job on the ones you covered. I am not an attorney.
Thanks for the video, but Mistake #9, I wasn't expecting that!! Hahaha
Great advice. I would only add that one needs to find an expert attorney who drafts up the documents. I lucked out and had a very experienced attorney who bounced things off of me that I hadn't thought about. An amazing guy. I am grateful for his work.
Please if you would share your amazing guy
Thank you for the public service announcement!
Thanks
Great video! Regarding Medicaid, they would need an Irrevocable Living Trust before the clock starts ticking. They'll need a certain level of assets in that ILT for a specific amount of time before Medicaid can not hold it against them. Again, great video!
Agree 100%. When working with my clients and discussing Medicaid planning with irrevocable trusts, the threshold question is whether or not they want to give up control of those assets to another trustee in order to shelter their assets. Most aren't willing until they see an actual medical issue on the horizon.
As a product dependent on an irrevocable trust, I can honestly say that leaving a family member as an executor is probably not a very good thing. The fact that when the trust was designed, it was due to the fact that Medicaid and prenuptials were not very trusting so my parents and lawyer thought the siblings would be the best executors for my "Well-Being" after they had passed on. Was this a good decision? No! Turned out you can only have one executor and after the dependent of the trust has deceased, the remainder of the trust goes to the three trustees which asked to date, the trust is now on its second executor and as the beneficiary, I am concerned for my future.
@@RealJamieWorley Thank you for your input. Unfortunately my dynamic is under the "not so good".
@@louiesaucke521 so you had 3 or 4 people listed as trustee and as 1 died the other took over?
@@theplainenglishattorneyDon't know what state you are in, your trust automatically turns into a IRREVOCABLE TRUST, if OR once you BECOME, INCAPACITATED OR DEATH! I just went through this with my dad, who is Incapacitated! Yet, while you are the GRANTOR/CREATOR/TRUSTOR you can UPDATE, MODIFY as often as you want to. Yet, if a real estate property, still allows you to claim interest in it, yes keep it simple! Yet, if you are not still able to claim that interest. That home should have a second person on that deed along with yourself, for cheaper property tax, benefiting purposes.
HE IS GOOD
you got it #9 🙂
Need a tutorial or basic procedure on up dating my schedule 1,2 etc
Thank you for this video. It was great and I routinely implement these ideas into practice.
I would appreciate it if you were to do one on Medicare and Estate Planning. Occasionally, I get clients or prospects that approach me about this issue.
Do you know of an estate attorney here in Sacramento California that you can recommend. I need to update my living trust. Thanks.
Thank you for the video. 75% of this was either common sense or just not applicable. But your discussion of IRA's and Trusts was very helpful. What you said makes perfect sense (might be common sense for others) but I just never thought about it. That's a mistake I might have made but won't now, thanks to you.
Useful information even if you do not live in America ....
Hi lPaul- I hear you - say you are in Louisiana- however- I amin London and I am very o pressed with your knowledge - I would very much appreciate Nd like to have a living trust properly written. Can you help by using a template? I am nearing old age! Needs to sort out my affairs.
Many thanks!
How much should I expect to pay to have a RLT done Thanks
My parents set up a revocable trust with a corporate trustee. Dad asked them 4 times over a 16 month period to sell a house that's draining his funds. They said they'd "revisit that later" but never called him back. He called his estate lawyer and asked her what to do. She called the trust officers who then agreed to list the house by Oct. of 2019, but they never did. In Feb of 2020, they were fired and another, smaller one hired.
The new corp trustee let Dad's life insurance lapse and Mom's health insurance lapse AND worse is that they lied about it...in email! So they were removed by an attorney. They filed a petition in court and served my parents, claiming my parents were mentally and physically incompetent to fire them. Both parents were so frustrated, they began to have immediate health problems. A guardian was assigned by the judge who, after 6 months, found no evidence of their incompetence. I called 38 law firms trying to find one willing to tangle with the bank trustee since they've been in our city for more than 100 years.
The corp trustee said they'd go away as long as I'm not trustee. I DON"T WANT to be trustee. They won't let me name any other trustee but the attorneys haven't named any either. This has languished for 3 years with NO actual court dates and no action done except for bills from attorneys.
Dad couldn't take it anymore and his heart finally gave out. He died in February. Mom is on her way. Considering how far along we are, and the bank's influence in the city, no law firms will take over to get this moving. It's cruel and irresponsible and corrupt.
Wow, I am so sorry to hear this. It sounds just like family court attorneys. The 2 worst type of lawyers are probate and family law attorneys, They trap you and you can't get out because you get deep involved and tangled up in legal ease and complex situations. Since it would take decades to learn the type of law you need to apply, there's literally nothing that can be done,. There's is zero accountability for attorneys that work in a civil capacity, Atleast in criminal court there are checks. Nothing like that exist in family court and the only checks are a state bar- and that's made up of.....attorneys. The police policing the police type scenario. It's such a corrupt system.
@DAVID JONES Tried that. No one would take it because they don't want to travel 3-5 hours each way, which is how far the next nearest large cities are that have probate attys. Our city is on the border of 2 other states, so we can only go in one direction.
@@bryanharrell4059 I haven't even contacted the bar. I'd say it's more like prisoners monitoring prisoners.
can't you have your mom revoke the trust since its revocable? Why weren't your parents at least co-trustees since its revocable during their lifetime? I'm an attorney but not an estate planning attorney. Just studying this to try and help a friend of the family.
@@andraynapolez3593 Yes, they were co-trustees. But she didn't have a good understanding of the trust when I arrived 6 years ago. They talked about dissolving it in 2020 but the estate atty said it's too complicated of a trust since my brother's fam had talked them into changing it when he arrived 8 years ago, and making his wife and kids beneficiaries. There are so many amendments to the trust that it's about 60 pages long.
love the #9 tip lol
Could you do a video on how to handle the affairs of someone that doesn't have a will or trusts set up? My son passed away and I'm trying to handle is end of life affairs for his daughter's mom cause they weren't married.
i LIKED YOUR VIDIO THANKS, I HAVE A REVOCCABLE LIVING TRUST AND MY HOME IS IN IT, WHAT TO DO WHEN MY TRUSTEE SELLS THE HOUSE. SHOULD THE TRUSTEE DIVIDE THE MONIES BETWEEN THE BENFS.
I would add that ALL attorneys start with a form that includes standard language for determining what is, and is not, an eligible need for a distribution to a future beneficiary (typically child or grandchild). That basic language is fine, but in my experience as a former bank trust officer (20 years) most clients don't ever communicate how they REALLY want things handled specifically. With only the form to go by, there is not much in the way of potential expenditures that won't fit within the definitions of "Health, Education, Maintenance and Support". If you want your trust to buy a grandchild their first car at 16, say so! If you don't want the trust to EVER buy them a car (I actually had one of these) SAY SO!
Thank you for these videos. Do you have a video discussing assets that go through probate and those that do not? For example does an IRA, Roth IRA, life insurance and other similar accounts that have a beneficiary go through probate?
Not all life insurance benefits and IRA assets avoid probate. If you outlive your named beneficiaries then those assets can end up in probate court.
Les; if you name a beneficiary and draft your trust well; there shouldnt need a probate. a trust is what the settlor wants or the person who creates the trust
They are countable assets towards total Estate value, but are distributed directly ( by pass probate) to the named beneficiary on the IRA/ life insurance account (not via a will or trust )
My partner and I just applied for Medi-Cal (Medicaid) to continue his stay in a Nursing home after the 100 days of Medicare (2023). We have a Revocable Living Trust set up in 2013 (to avoid Probate), we have assets of $103K, one car, one home (well under Medi-Cal limits) and some some stocks which we hope will be protected from the 6-year "Look-Back" of Medi-Cal. So I guess need to talk to lawyer who set up the RLT, but hope we have done it right.
So does an irrevocable living trust protect your assets against debt?
Given the current state of the economy, I've noticed that my portfolio has been stagnant this year despite having invested in good companies. I have a reserve of approximately $700k that I'd like to see grow. Does anyone have any suggestions for how I can adjust my investment strategy in light of the recession to improve my portfolio's performance? I appreciate any insights or advice you can share.
Concentrate on two main objectives. First, keep yourself safe by knowing when to sell stocks in order to limit losses and maximize gains. Second, get ready to benefit from market changes. I advise consulting a CFP or other professional for advice.
@@bernisejedeon5888 Yes, I have been in touch with a CFP ever since the outbreak. Today, investing in hot stocks is quite easy; the difficult part is deciding when to buy and sell. With an initial starting reserve of $80k, my adviser chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
@@edelineguillet2121 wow that's so incredible! Please provide the information of your CFP, I really need it now
@@valeriepierre9778 You might have to shop around yourself for advisors, but I've been working personally with JEFFREY HAROLD STARR for the past five years or so. he's selective about the clients he takes in though. I think you could look him up or something.
@@edelineguillet2121 This recommendation comes just in time because I'm literally grasping for straws right now! I looked him up on the internet and made plans to call him
I didn't make mistake # 9 !!!
I also think you did not cover the biggest advantage in properly using a revocable trust. Can you tell me what that might be? I corresponds to your number 1 item.
I have my IRA and bank accts. set up with POD. is that sufficient?