Irrevocable Trust Opinions

[Jim-H]

I would appreciate hearing opinions on this issue:

My lawyer has set up an Irrevocable Trust for my mom.  I am the Trustee.  

She is living at an assisted living facility now.  My attorney advises putting most of the proceeds of the house sale into a checking account under the name of her as irrevocable trust.  Then when funds are needed to pay for the assisted living, I move those funds to pay for the expenses.

Question I need opinions on is if this is worth it or a good idea.  Now the home proceeds are in a joint checking account we have and I take money out as needed for expenses.  

What is your opinion on whether to do this trust?  It seems like extra effort.  

Thank you so much!

[tagteam]

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@Jim-H wrote:

What is your opinion on whether to do this trust?  It seems like extra effort.  

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Providing an opinion on the issue raised would essentially be providing a legal opinion as well as tax advice with a relative paucity of information. Frankly, if you would like another opinion (and it is always a good idea to get a second one) you should contact another local attorney and/or financial/tax adviser.

Trusts always add a layer of complexity, involve additional effort and documentation, et al, but can be invaluable for protection and preservation of assets contained therein. For one thing, and as an example, if the funds are in a joint checking account (with you and your mother on the account), they are exposed to your creditors as well as your mother's creditors.

[Jim-H]

Thank you, I see what you are saying and protecting the assets are the primary objective and I suppose worth the extra complexity.   Thank you again!

[Carl]

DISCLAIMER: I am not a lawyer, tax expert or any kind of "money" legal or professional expert by any stretch of the imagination.

Now the home proceeds are in a joint checking account we have and I take money out as needed for expenses.

What is your opinion on whether to do this trust?

You're actually asking a 2-part question. Currently the funds in the joint account are exposed to any litigation you personally might get exposed to. For example, if you are involved in a "your fault" car accident and end up killing someone, all of those funds in the joint account are exposed not only to those who will be seeking compensation for your actions, but to the lawyers who will be defending you in court.

Now for the trust, there are many, many different types of trusts and just as many ways each type of trust can be set up. To ensure things are done not only in your best interest, but in the best interest of Mom, the professional helping set this up for you should be uniquely trained, certified and qualified in Last Will and Testaments, Trusts, Estates, and Probate. In fact, all those areas should be their main specialty. But do understand that's to protect both you and your Mom from "LEGAL" aspects.... not tax benefits or consequences. Such a lawyer that specializes in Wills, Estates, Trusts and Probate (and there are many out there that specialize in *only* that) I would have no expectations for them to be very knowledgeable in the tax aspects.

For the tax side, you need to talk with a tax professional that is themselves "uniquely qualified and highly knowledgeable" on the tax aspects of the many types of trusts that can be set up. Ideally you'd want a tax lawyer. But that can be a bit costly. However, a CPA who deals mainly with clients who have trusts, should be able to educate you just fine so you can make a better informed decision on what is best for YOU and MOM.

[Critter]

Seek a local elder attorney as Mom may need some medicaid/medicare planning. 

[Jim-H]

Thank you!  Very helpful.  This trust was set up by an elder care attorney.  I feel she is very good, mostly just wanted to hear others thoughts.

I appreciate your help...very smart folks in this community and helpful.  

Like most, caring for your parents is more difficult than you children.

More legal aspects, much more health and mental issues.

[Carl]

This trust was set up by an elder care attorney.

We have lots of those in my state of Florida. They're highly knowledgeable in the areas of Wills, and Probate in addition to their "specialty" of protecting elder assets. A vast majority are also knowledgeable on the tax aspects too.