Why "Trusts"?

[feb]

Over time I've noticed that a fair amount of lake property is held in Trusts, Irrevocable Trusts, or something like that. Why is that? Is it a simpler way to hand it down from generation to generation or some way to lessen the burden of owning it? Just good old estate planning?

[phoenix]

no real advantage from a current expense point of view( towns could care less who owns they will tax the same anyway) generally it is for estate planning both for estate tax and probate

[upthesaukee]

Over time I've noticed that a fair amount of lake property is held in Trusts, Irrevocable Trusts, or something like that. Why is that? Is it a simpler way to hand it down from generation to generation or some way to lessen the burden of owning it? Just good old estate planning?

My wife and I are no longer people, we are a trust and everything we own is in the name of a trust. In case we buy something and it could be titled in the name of a trust, but we didn't do it, there is what is called a "pour-over will" built into the trust that will take that property and leave it to the trust. Purely an estate planning thing.

When my Mom died, we had just about everything in both our names (dad had died in the 80's). Mom bought a new car, and forgot to put it in my name also. Went to do the probate thing, and for a little over a $100 in blue book value on the car, we were going to have to do the long probate thing. However, we waited a week or so and the new book came out and the value was below the threshold (can't remember what it was...something like $15k.).

With a trust, the trustees just continue it along, no probate cost, full use of the property(s), but a lot more expense to set up than a will. For us, we felt it was worth it.

[Basin]

it is a simple way to protect the general public from knowing who you are or where your money is coming from.
It is hard to put a price on privacy.

[SAMIAM]

Upthesaukee....you did a nice job of explaining the benefits of a trust.My lawyer took 3/4 of an hour doing the same thing and I left scratching my head.How about a lesson on LLC's.......you are saving us a ton of money. :)

[SIKSUKR]

Up is right on the money.I just set up a living trust.The point is to keep your assets from getting tied up in probate court.I can easily make changes to the trust if I feel I want to.It is a little pricey but is well worth it if you have decent size assets you wish to pass along.Definately check it out with an estate planning lawyer.