It is an individual trust not a family trust. Does it make a difference? It sounded like they consider it title transfer.
A standard revocable trust (that becomes irrevocable upon death) qualifies for the Renaming exemption, as the ownership is not really changing. It’s a ‘Deed or Trust Filing not Subject to a Sale’ (per CA code).
It could be individual or multiple members. (I only mentioned ‘family’ bcos many folks I know just label their trust, as “Igloo Family Trust Dated November 8, 2022”, for ease.)
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What state is this in? I’m surprised it is treated as a sale there. IANAL but when ownership is transferred to a living trust the trustee(s), the owners of the property, are seen as still having ownership and control in at least many (if not all) states. It’s different is title is transferred to an irrevocable trust) but that isn’t what most people do for a variety of reasons. After the death of the owners the revocable trust then becomes irrevocable.
Is your attorney an estate attorney? You’ve heard a few unusual things from this attorney already, such as them telling you that trusts are “public” when they’re not.
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Yes, it is an estate attorney. We are planning to do a big overhaul in two years. Maybe we should check on the attorney and switch if needed.
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what state, if you don’t mind sharing?
I am secretive about where I live. CC folks are so good at detective work. Our present attorney took our account over from our previous attorney when he retired. He was also reluctant to put our house in the trust. It makes two against real property in a trust.
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Having survived both parents (divorced) who both had trusts, I am a true fan. My mom was demented and lived quite a while in AL and memory care. Having the trust worked so much better than the Power of Attorney TRULY made a difference. Dad just passed and was sharp until the end, but we don’t have to scramble to do anything… because everything is in the trust. Yes we need to distribute it “in a timely manner” but none of the beneficiaries care and land can take a long time to sell. All we had to do for the banks is give them a new certification of trust with the new trustees and we were good to go.
And I’ll mention that the Transfer on Death stock account that my mom had took maybe 15 minutes to get to my brother. No fuss, no muss. It wasn’t in the trust, but by then I had POA, Guardianship, and every other thing I could think of and the stockbroker knew me. Interestingly for that though, I didn’t have to sign anything because it went to my brother. I just provided one of the many death certificates and away it went.
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Thinking about this … we had some difficulty in the definition of Revocable vs Irrevocable for the valuation at death. One tax guy opined that it was still revocable after we kicked mom off as trustee (because she was demented and I had to get guardianship so that her helpful handyman couldn’t talk her into giving him the ranch as he was trying to do!) Another tax guy opined that it was irrevocable when we kicked her off. This was important because of the value at distribution. It took a couple of years after she died to get it sold, so maybe 10 years passed after she was no longer trustee. What I decided to do was agree that it was irrevocable when we took over and got a retroactive appraisal backwards. Then for taxes we just had capital gains from the time we took over to the time we distributed. Helped that she had a good tax lady doing her taxes for years and years. Maybe we paid more taxes, but I feel very good about being able to defend choices to the IRS or to the druggie niece who was disinherited. So far neither has done anything, but I still have more peace of mind.
Long winded way to say, if you have an old trust, you might want to double check the revocable/irrevocable cliff for tax purposes. It is all in the subtle wording of the trust.
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This should have been pretty easy to identify as it (what happens under incapacitation) should have been written into the Trust and/or state law would apply. Did you ask a Trust/Estates attorney (as opposed to a tax guy)?
@bluebayou … “should have”…saddest words in inheritance I’ve heard. the trust wasn’t specific enough. it said that she could be removed as trustee, but did not specify if the trust was irrevocable at that point. the attorney who wrote it was long dead; hence, my point was to check ing current law/wording.
Yes, we asked a tax guy in the state, her tax lady in the state, our tax guy in our state, and an attorney in each state. no ageements so we did the best we could.
thank goodness all beneficiaries had confidence in the process and no one gave us a hard time about my choices. Just was trying to point out that a)double check wording and b)you might still have to guess in the end.
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and your point is a good one.
Mine was different: ‘tax guys’ are not necesssarily experts in Trust law. I would have obtained a written opinion from a Trust/Estates attorney with expertise in your state and then showed the tax guy the written answer.
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Does anyone have any idea how long probate takes in New York at the present time? It will be somewhat of a complex estate. I’m guessing it will be 2-3 years.
Assets: house left to a spouse. All other assets passing to adult children. 1 rental property with 8 units, 1 business interest with multiple stockholders and he is the majority owner. The house may be collateral for the business loan. We are trying to get an idea on that.
There may be 1-2 small bank accounts.
One spousal trust (mom passed years ago) and one insurance trust, not in his name.
I heard in NYthe process is complicated.
@esobay If I had to guess, it is not irrevocable until the person passes. Under the guardianship, the trust terms can still change making it revocable.
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Depends on the Trust (and state law). It is not uncommon for a Trust to become irrevocable when someone has permanent impairment (dementia, for example), when certified by a medical professional.
@igloo, what you said was the opinion of one (trust) attorney who reviewed it. (That she could regain her senses and become the trustee again). One said that just the POA that I had before I invoked the demented clause meant that I was still in charge and thus it should be revocable. However, then I ALSO got guardianship (as well as the POA and trustee declaration) so the guardianship was a curveball. Whatever. I don’t think it cost us THAT much in extra taxes when we finally got the property sold, but it was something I wish I had known that that part was not well defined/ wish I’d known to get her trust updated while she was still sane. And back to the tread title!!
Oh, and I should mention that she has been gone since 2017 and we settled the distribution in 2020 so other than a few annoying calls, it is all done and dusted. I merely serve as a cautionary tale of what you WISH you’d needed.
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I’ve read through the thread, getting more alarmed as I go.
Is there an executors for dummies book out there?
Some place to start?
I’m gonna be dealing with a very complicated estate, filled with a lot of investment property & accounts, and 4 heirs divvied up by percentage.
We have a zoom appt with our personal accountant tomorrow, and he will recommend an estate lawyer, I presume.
But I’d love to know what to ask and I’m getting more and more certain I don’t know.
@Gatormama , my experience has been that if a good estate lawyer prepares the docs, they will be a great resource when it’s time to act on them. Like good realtors, many have folks they can refer for appraisals, sales, etc. Not to say a manual isn’t helpful, but you won’t be entirely on your own if you have someone. It’s definitely worth checking around, and your tax person may have ideas.
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Gatormama, in my somewhat limited experience, the two most complicating factors are:
1)Assets stashed everywhere requiring a treasure hunt to identify random accounts, bonds, several safe deposit boxes with only the deceased as signatory, etc.
2)Heirs who are not on the same page AT ALL as to the priorities- a relatively speedy resolution even if it means that you’re leaving some money on the table? A prolonged effort to sell every end table and get the highest possible price on every piece of real estate even if it means having to deal with LOTS more hassle, out of pocket expenses, etc.
Even a “complicated estate” can be relatively pain free if the assets are mostly known, have easily established market value (an apartment building in a city with a robust listing/sales process; common stocks in public companies, etc.) and if the heirs are on the same page.
You are executor for someone who has just died- or you’re anticipating the process down the road? If someone has already died, the most helpful thing you can do is call a meeting of the heirs to get everyone’s views and feelings “out there”. Don’t wait until the day before a closing for someone to step forward and say “It is breaking my heart that we are selling the beach cottage”. Let them express that now- point out that there are mechanisms in place (someone can buy out the other heirs at fair market value) but that leaving the beach cottage empty for the next 15 years while someone figures out if they can afford the taxes and the maintenance is not an option (unless that’s something that everyone agrees to. But in my experience, all it takes is one email from a local realtor-- “The cottage your parents bought for 18K in 1965 is worth $900K, give or take” for that fantasy to dissipate!)
But do not back down and hire someone’s brother-in-law who does family law but “has always wanted to do trusts and estates”. You don’t need to feed someone else’s learning curve. Retain someone who knows the jurisdiction and its tax wrinkles, deals with estates the same approx. value of yours, and does not have so much of an ego that he/she will insist on billing you for things that a paralegal can do at much lower cost.
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Nolo Press has some good basic books.
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Thanks to all who replied; this is down the line so nothing urgent. I just don’t want to make mistakes now. Plus, there is the issue of care in the interim, and what resources that will suck from the eventual estate. Sigh.
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