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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Steve Felix who wrote (22037)	3/1/2015 8:46:48 PM
From: E_K_S	3 Recommendations Recommended By JimisJim Steve Felix Tom Daly Read Replies (1) \| Respond to of 34328

OT - Somewhat Off Target but settling an estate that took a life time to build can get complicated. Just another reason to talk to an estate planner who can provide a road map on how assets can be distributed in a tax efficient manner. I use Schwab's Trust department (and advice) when setting up my brokerage trust account, IRA and ROTH accounts. (Note: they have a copy of my notarized trust document along w/ all updated successor trustee amendments as appropriate). I used the same boiler plate document as my Dad's. The important thing is to have a successor Trustee that can administer the estate when you are gone. You can pay a Bank Trust department but they take a large fee to follow the trust declaration. For a living Trust, you use the SSN of the Trustee and hold title to the assets in the name of the Trust. Therefore, it is important to coach your successor trustee while you are still alive and let them know where & how all the assets are held and that all of the brokerage accounts and banks have copies of the updated trust agreements (along w/ the current successor trustee amendment). Then when you die, all that needs to be done is to have your successor trustee contact the brokerages and/or bank(s) to change the Trustee's name when the death certificate of the current Trustee is provided as well as a obtain a unique EIN number so the brokerage companies can assign it to the the Trust accounts. I believe the new trustee has 2 years to liquidate the Trust distributing the assets to the beneficiaries (as well as providing the step up in basis to all beneficiaries if/when stocks and/or real estate are transferred). The new trustee can charge the estate a fee for this service but they must also file the Trust income tax 1040 for each year that the trust is still "active" and generating income. I keep my successor trustee in the loop when I update any of my documents. If/when I get older and/or on my death bed, I will review my successor trustee's interest again in administering my estate and will either assign a bank trustee officer or assign a new successor trustee candidate. In my case, I expect to live for at least 30 more years, so the level of interest (or circumstances) by beneficiaries/trustees can change over time. So the complicated part is if/when the successor trustee takes the responsibility to settle the estate and follows through w/ all of the brokerage/bank accounts. In the case of my Dad's & Aunt's estate, I consolidated their brokerage account to Schwab Trust accounts and dealt directly w/ Schwab's trust department updating and submitting all the information they needed so I could directly administer their estates (as trustee). I have worked w/ the same trust department at Schwab for all of my living trust agreements and update them w/ copies of my trust amendments where appropriate. I do write all my own trust amendments that I keep in my master trust agreement binder. Those documents/amendments that require notarization, I have done by Schwab and send those to the Schwab Trust department as necessary. Note, not all the trust amendments need to be sent to Schwab and/or notarized but rather just sent to the successor trustee and made part of the original trust document. ----------------------------------------------------------------------- Therefore, it is the administration of the estate at the time of the death of the Trustee that gets a bit complicated. That is why one might want to talk to an estate planner so they can go through the process of what is involved in settling an estate. It gets a bit more complicated when real estate and/or other hard assets are part of the estate. FWIW, I have all of my cars/truck registered in the name of my Trust w/ a section of the trust that explains which beneficiary receives title to those assets (remember the trustee must account for the cost basis of each asset transferred to the beneficiary). Therefore, the successor trustee needs to know how the real estate books are managed, what the depreciation schedules are and what adjustments to the cost basis are when they do the final beneficiary transfers and/or liquidation. Remember a trust basically allows an estate to avoid probate and the taxes that are associated with that process. An estate planner can help also w/ ways to reduce estate taxes and help set up generation skipping strategies (The ROTH can do this w/ a direct named beneficiary). It get complicated and IRS rules change. Steve, this would make a good chapter for your book. It's not hard but one needs to understand the process of settling a trust estate and exactly what the banks and brokerage companies need (death certificates & original/amended trust agreement) to update the trust accounts. That's why it is important to develop a relationship w/ your brokerage Trust department 'before' your death. EKS