trusts and estates Archives - De Bruin Law Firm

Do I Need To Have An Attorney Involved In Funding A Trust?

October 31, 2019/in Estate Planning

Yes, we believe it’s always advisable to seek legal assistance when funding a trust, especially when you’re dealing with the nuances of what type of trust you want, what type of assets you want placed in the trust, determining the list of assets, understanding the tax-related consequences of how items will be titled if they are transferred, long-term issues like Medicaid eligibility, five-year look back periods, the effect that the trust may have on long-term care situations, penalty clauses, spouse issues involving joint trusts, etc. All of these things have their own requirements and consequences, so it’s always advisable to seek legal counsel from someone who handles estate planning and can help you through this minefield.

For more information on Attorney’s Involvement In Funding A Trust, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 982-5930 today.

Can I Add An Asset To My Trust At Any Time?

October 31, 2019/in Estate Planning

Absolutely, you can add assets to a trust at any time. This can be done by titling the asset from your name into the trust name. The only consideration is to make sure that you’re not titling assets in a trust name that are better left to just changing a beneficiary designation.

Is there any look back period for putting assets into a trust?

Yes, the largest look back period for putting assets into a trust is with Medicaid. As people get older and are thinking about their retirement, they are thinking about Medicare, Medicaid and social security. One of the things that you have to remember is that Medicaid has a five-year look back period. In essence, that means that any asset that’s transferred into a trust in that preceding five-year period is subject to what they call a penalty. A penalty means that you cannot transfer that asset in and qualify for Medicaid until you have absorbed that amount that was transferred in the five years.

Now, if you’ve transferred any asset into your trust longer than five years before you applied for Medicaid, then this does not apply, but if you’re in that five-year window, every jurisdiction has what they call a penalty divisor. This means that they set a rate for that divisor and divide the assets that have been placed in the trust in the last five years. It is a calculation that will give you the number of months that you’re not eligible for Medicaid due to the look back period. When you are setting up a trust and considering applying for Medicaid, you want to make sure that you understand what the penalty is.

What is the process of actually funding a trust?

When you consult with an estate planning attorney, one of the things that they will do is create a comprehensive list of assets that the trust maker has. Once you’ve decided the type of trust that you want established and have the list of assets that are to be re-titled, then you use your list as a guide to begin the process of re-titling, whether that’s in the case of re-titling objects, changing a beneficiary designation on a life insurance policy, or going to the recorder of deeds and changing the ownership of real estate from your name to the trust name.

Is funding a trust a simple process or can it get complex?

The difficult part of funding a trust is identifying all of the assets, identifying what trust is best serving the client’s purposes, and deciding which assets are going to go to the trust. Once that’s done, the majority of the work is administrative.

Is real estate handled differently when funding a trust?

Yes, real estate is an asset that everybody initially thinks about when they are talking about a trust. The goal is to avoid probating the real estate. The trust is an entity that goes on after the trust-maker has passed or is deceased; therefore, by putting real estate into a trust, you are changing the owner of the real estate. Anything that you would normally have to do to change the ownership of your house would apply, because you would need to create a new deed and file it with the recorder of deeds.

There is usually a transfer tax or a stamp tax that applies. In this case, almost all states have an exemption because you’re transferring the real estate from an owner to a trust controlled by that owner.

For more information on Adding Assets To A Trust In South Carolina, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 982-5930 today.

Do I Need A Trust Or A Will To Provide For My Child?

July 28, 2016/in Estate Planning

Parents who set out to create an estate plan to provide for their children’s care and welfare following the parents’ deaths have two main choices in estate planning schemes: using a will alone or a will in combination with a trust. In times past most parents would have simply chosen to have a will drafted that would appoint a guardian for their children and dispose of their assets. In recent times, however, living trusts have become an increasingly-popular choice for individuals crafting an estate plan (regardless of whether they have children or not). But is a living trust necessary – or even desirable – for parents with children looking to create an estate plan that provides for their children?

Differences Between A Living Trust And A Will

Before determining whether a will alone or a trust is more desirable for parents, it is helpful to review the differences between these two documents. A will is a document that is admitted before the probate court by your executor or administrator (named in the will itself) and describes how you want your affairs handled after your death. A trust, on the other hand, is a legal entity in whose name you put property and assets (like your home, car, and/or valuables) while you are alive. A trustee (usually the creator of the trust, followed by successor trustee(s)) is tasked with managing all property that is in the trust’s name and using it for the benefit of the named beneficiaries of the trust – typically the trust’s creator and his or her spouse, followed by any children the couple may have, followed by any of their children’s children, and so on. A trust should not be used alone: most living trusts created as part of a comprehensive estate plan that includes a “pour-over will” – a document that takes any property owned by the decedent at the time of his or her death and “pours” it over into the trust. This essentially makes the decedent’s assets and property trust property on the date of his or her death.

When A Trust Might Be More Desirable

There is no universal answer to whether parents of young children should opt for a will alone or a will and trust. However, a living trust/will combination provides some advantages of a traditional will that some parents may find desirable:

● A trust is not a public record, so the precise terms of your estate plan can remain private in most cases;
● A trust allows you to pass on assets and property while avoiding some estate taxes that might otherwise be imposed;
● A trust allows for your assets and property to grow and increase in value and be used for the benefit of your children as well as subsequent generations.

Contact the experienced and dedicated South Carolina estate planning team at the De Bruin Law Firm for assistance. We will carefully listen to your circumstances and situation and will help you craft a personalized estate plan that accomplishes your objectives and the goals you have for your assets as well as for your children’s care.

Benefits And Pitfalls Of Transferring Property Through Joint Ownership

April 16, 2016/in Estate Planning

Transferring property when its held jointly can come with certain complications. Joint ownership is a term that arises when more than one person owns property. And, ultimately, it can be used as a simple and cost-effective way to transfer property after death. For example, a parent who wants to make sure that an adult child inherits money in a bank account can add the adult child’s name as a joint owner of the account. When the parent passes away, the adult child automatically becomes sole owner of the account and there will be no need to open a probate estate to transfer the money.

Transfer Property

Under South Carolina law, people can also transfer real estate after death by adding someone to the deed as a joint tenant with rights of survivorship. By adding a second person to a deed as a joint tenant with rights of survivorship, the real estate will automatically belong to the surviving owner when the other owner passes away. The surviving owner will only need to file a certified copy of the death certificate with the Register of Deeds for the county where the real estate is located.

When property is jointly owned, there is no need to go through probate to transfer the property. By avoiding probate, the property is transferred quickly and the costs of opening a probate estate are avoided. However, there are potential problems with adding another person’s name to your property.

Potential Problems With Joint Ownership

One potential problem is that the other person actually owns the property also. That ownership gives the second owner certain rights to the property that the initial owner might not want. For example, both owners of a bank account have the right to withdraw money from the account. In the perfect world where everyone can be trusted, that will not be a problem. Unfortunately, there are some people who will freely spend the funds in the bank account even if they were only named on a bank account for estate planning purposes.

There are also potential problems with joint real estate ownership. If you add someone’s name to the deed to your home for estate planning purposes and later decide to sell the home, the other owner will need to sign off on the sale also. A problem will arise if the joint tenant does not want to sell the property.

Estate Planning Documents

When developing an estate plan, it is important to make sure that all of your estate planning documents are consistent to avoid future problems. Dispute with heirs may arise if your will states that one heir will receive all of your money although a different heir is named as a joint owner of your bank account. It is very important to speak with an estate planning attorney to make sure that you do everything possible to avoid disputes after your death.

Contact An Attorney In Greenville For Help

At the De Bruin Law Firm in Greenville, South Carolina, our estate planning attorneys can help you to determine if adding another person’s name to your property is in your best interest. Our estate planning attorneys can also prepare any necessary deeds or other conveyancing documents. In the event there is a dispute resulting from the ownership or transfer of property, our estate planning attorneys will aggressively represent your interests. Contact the De Bruin Law Firm today to schedule an appointment with one of our estate planning attorneys.

Tag Archive for: trusts and estates