drdanburgerParticipantStatus: PhysicianPosts: 5Joined: 05/03/2018
Looking at starting living trust but newly married and wife is not physician. Have read the pros and cons of using joint vs separate living trusts but none from the physician angle. Thoughts?June 10, 2018 at 7:32 pm MST #129250Steven Podnos MD CFPParticipantStatus: Physician, Financial AdvisorPosts: 116Joined: 09/21/2017
If you live in a state that has asset protection by virtue of “as tenants by the entireties” ownership, you should strongly consider that instead of putting assets into a living trust (which has no asset protection, joint or otherwise). I have seen joint living trusts with language that states it is the same as “ATBE” but I don’t think this has been litigated.
For a young couple, owning assets in a living trust just adds hassles without any real benefit. Your wills can “pour over” solely held assets into your trust (joint or sole) and in most cases everything passes via joint ownership or a beneficiary designation otherwise.spiritriderParticipantStatus: Small Business OwnerPosts: 1702Joined: 02/01/2016
What state do you live in and exactly what benefit do you think a living trust will provide that can’t be better solved differently.
Like LLCs and/or S-Corps, Living Trusts are overhyped, underperform and often counter-productive.June 11, 2018 at 6:12 am MST #129279CraigyParticipantStatus: SpousePosts: 1856Joined: 09/16/2016June 11, 2018 at 7:45 am MST #129292drdanburgerParticipantStatus: PhysicianPosts: 5Joined: 05/03/2018
We live in IL. Looking at living trusts for 2 main reasons –
1. To avoid probate costs
2. To exert some control over funds for our son’s well being in the case we both died in an accident.
Have less than $200k in assets mostly seperately held retirement accounts and mutual funds + about 2MN life insurance.
We are newlyish married and I like the idea if things went south of being able to update my own trust without involving divorce lawyer (or at least less).
I am FP so not super worried about asset protection though perhaps I should be.June 11, 2018 at 10:02 am MST #129317jfoxcpacfpModeratorStatus: Financial Advisor, Accountant, Small Business OwnerPosts: 7306Joined: 01/09/2016
To exert some control over funds for our son’s well being in the case we both died in an accident.Click to expand…
You do not need a RLT for this. A testamentary trust will do the job.
We are newlyish married and I like the idea if things went south of being able to update my own trust without involving divorce lawyer (or at least less).Click to expand…
You cannot count on a RLT to remain separate property in a divorce.
1. To avoid probate costsClick to expand…
This is the only reason I see for a RLT for you. I believe Anjali Jariwala (who is originally from IL) said in a previous thread that IL is one of the states where it makes sense to bypass a complicated probate. All states are not the same, though.
Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
https://fox-cpas.com/for-doctors-only/June 11, 2018 at 11:07 am MST #129333AnjaliFITParticipantStatus: Financial Advisor, Small Business OwnerPosts: 107Joined: 04/01/2018
You cannot do a joint trust in IL – joint/family trusts are usually only available in community property states which IL is not one. If you go with a RLT you’ll need one for each spouse and the estate planning attorney will be able to help with dividing up the assets so you know what goes into which trust. A good estate planning attorney will provide you with a funding letter after your documents are complete outline how everything should be titled. Probate is expensive in IL but only applies to taxable assets, real estate, etc. IL provides a $100k exemption for probate so that usually helps cover the bank accounts (unless your accounts are well over this amount).June 11, 2018 at 5:29 pm MST #129399