<p>The trust belongs to you and your sister then. You could include it in your retirement planning except no one knows when it will become avaialbe. It sounds like he was trying to avoid estate taxes. It sounds to me it is a standard A-B-C trust. Did you and your sister inherit the max exemption amount when your father passed away?</p>
<p>Hunt - I believe it would be better for you to inherit it when your mother passes away than for her to gift it to you now, unless you need the money. When you inherit it, you can step up to the value of the asset(s) at the time when you inherit it as the new base, so there would be no capital gain. If she is to gift it to you now then you would need to pay tax on capital gain.</p>
<p>My father just passed away last year. They bought the house for 750K, when he passed away the house was valued at 1.5 mill, so if my mother were to sell it now, she would only need to pay tax on anything above 1.5 mill on my fatherâs share. If she doesnât sell the house and we were to inherit it some day at market value of 2.0 mill, we would only need to pay gain of anything over 2 mill. Same for their stocks. My father bought a lot of stocks years ago, and a lot were in his name, so when he died all of his stocks had a step up to the new market value. My motherâs estate wonât be over 5 mill, so she is not concerned about keeping it under the max amount.</p>
<p>I donât think Hunt has any choice other than waiting it out. From the way it looks, it is an irrevocable trust and the terms for distributions are spelled out.</p>
<p>Sometimes there are ways to liquidate trusts or to disclaim an interest in them. It requires advice from an attorney whose main practice or specialty is trust and estate law. Usually these people are found in larger cities in your state. For instance, sometimes, the trustee has the discretion to simply distribute the assets of the trust. </p>
<p>If itâs able to be disclaimed by the mother, or distributed, it might still be worth looking into the alternative of just letting it pass as originally planned regarding things like stepped-up basis, etc., as someone mentioned. </p>
<p>Iâll speculate that these things are tricky to do in a cordial, family-friendly way sometimes since some senior citizens become suspicious of financial maneuvering that involves issues that they donât fully understand. </p>
<p>Some trustees are accomodating and do what they are asked to do within their power. Changing beneficiaries tho has to come beneficiaries themselves. There isnât a whole lot one can do unless they volunteer themselves.</p>
<p>
We didnât inherit anything when he passed awayâalthough much of the exemption was used up by gifts in earlier years, so Iâm not complaining too much. The intentions were fine; it was understanding of the facts that was lacking.</p>
<p>Weâre not going to try to change the terms of the trust, at least for the foreseeable future.</p>
<p>
Except that my mother has a ton of cash, which she refuses to invest. Yet another storyâŠ</p>
<p>(serentiy prayer)</p>
<p>Thatâs tough. I am hoping I remain reasonable when I get old. </p>
<p>âton of cash,â I shake my head on that. I just rebalanced my momâs portfolio with my brotherâs help. </p>
<p>Thoughts on the example from this website?
<a href=âhttp://time.com/money/2891428/are-you-leaving-thousands-of-social-security-dollars-on-the-table/â>http://time.com/money/2891428/are-you-leaving-thousands-of-social-security-dollars-on-the-table/</a></p>
<p>"Take a married couple: Jane, age 57 and Ian, 59. He earns $65,000 a year, while she earns $35,000. He wants to retire at 65 and she at 63. If they both take Social Security at those ages, he will get $24,500 a year, and she will get $12,600, giving them a combined income of $37,100 annually. That adds up to lifetime benefits of $872,300, based on Financial Enginesâ estimates.</p>
<p>A different claiming strategy would give this couple an additional $131,700 more in lifetime income from Social Security, bringing their total lifetime benefits to $1 million, according to Financial Engines. Jane still files for Social Security at 63, while Ian delays taking his Social Security until age 70, which is when you get the maximum benefit. But at age 66, which is his full retirement age, Ian files a restricted application to claim a spousal benefit based on Janeâs income, which gives him $8,100 a year, which gives them a total $20,700 a year in income. Then he switches to his own benefit at age 70, boosting their payout from Social Security to $45,300 a year." </p>
<p>My thought is run the software discussed earlier in the thread. This is EXACTLY the kind of scenario it will identify for you. </p>
<p>^^What post number was that software discussed? Oh, wait, we donât have post numbers. </p>
<p>colorado mom-
Trying to figure out how to make tht work. But both have to be in social security age range⊠yes?</p>
<p>
The software can be found at <a href=âhttp://www.maximizemysocialsecurity.comâ>http://www.maximizemysocialsecurity.com</a>. I had heard that Financial Engines was releasing a free version of their own software, but I have not been able to find it (if you have sufficient funds at Vanguard, Financial Engines lets you use some software for free). </p>
<p>The software costs $40, but it was well worth it to me. </p>
<p><<<<
A happy surprise yesterday was learning that dhâs primary pension plan will pay full benefits if we start drawing it at 62 instead of waiting until 65. I donât understand their rationale but sure donât plan to question them. If we started just two year sooner, at 60, weâd lose about 12% of the monthly payment.</p>
<p>If you have a pension, how have you decided to take the payments? Will you elect a 50%, 75% or 100% survivor benefit? Dh wants to do the 100% survivor benefit while I think 75% is sufficient (heâs assuming I will outlive him.) Iâd be okay with 50% since I would probably downsize again or even move into a seniors apartment community (a nice one is in the planning stages very near where we expect to be living.)
<<<<</p>
<p>we opted for 100%, which didnt require my notarized signature (anything less would have). I am younger and healthier than H, so he wanted to make sure I got the most. Frankly, the difference between full and half wasnât much, so it was a no brainer. He opted to continue his life insurance as well, but it really isnt neededâŠbut he insisted.</p>
<p>we were very happy to learn that Hâs health plan improved with retirement since he fell into the old plan (for employees hired before 91 or 93âŠI forget). and now they have to cover child dependents up to age 26, which they didnt use to do for retireesâŠyay.</p>
<p>I would be leery of taking the 50% survivor option unless your Hâs pension is HUGE or you have another large source of income. Even if you downsize again, you may find that your monthly expenses will still be significant.</p>
<p>Just went through this a few days ago re: the pension. I thought that the 75% was a good deal as it gave us $550 more a month for life and if H died still enough for a good life for me. I talked with our Financial advisor and he basically said that the actuarial tables know what they are doing and there is a reason and so on. He advised that we take the 100% for spouse. He also advised that we take the pension v.s. the lump sum (which he would have handled) as there is no indication that the market will beat the pension in the years to come. And Hâs pension is signifiacant. FA will handle our other funds which are a match to the pension. Nice that he was honest.
We have signed and now our life is about 70% set and while it is all good it is feeling like quite the emotional adjustment.</p>
<p>The social security info about H filing and suspending is something my sister told me about a few years ago. She was a paralegal. It is so confusing but took info she gave me to FA and he had his legal team research it and it is true as written above on postâoh wait! We no longer have post numbers.</p>
<p>But it is as colorado_mom wrote and what H and I plan to do. Nonetheless, I did purchase the $40 program as mentioned here and am looking forward to punching in the numbers for a final answer.
It is one of those things that our CPA thinks will go away in the future but not for another many years. She said that she went to a Social Security conference and this very thing was discussed. </p>
<p>About that FATCA someone mentioned above, can you still use Form TD F 90-22.1 for FBAR? Is that the same thing? We have a small foreign account from the time we worked abroad. It was usually below $10,000 and we didnât have to file most of the time. It looks like at one point last year it went over $10,000 briefly. Last time we filled out TD F 90-22.1 was 2007. It got complicated in the meantime.</p>
<p>Getting rid of File-and-Suspend is in the obama admâs new budget proposal sent to Congress. Wheteher it will be acted on, I guess nobody knows.</p>
<p>I think it will be acted on but maybe those of us that are already past 62 will be able to contiue doing it and then it will be phased out. Just my hope I guess.</p>
<p>
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<p>Most lump sum offers donât come close to replacing the annuity value of the pension----its one of the reasons that pension plans are not aways sound. But if you invest yourself, you can protect yourself against inflation by owing equities. </p>
<p>Staying with the pension has the advantage of having the PBGC backstop you for up to 50,000 annually, I think. But it also locks you into their payment, which could be eroded by inflation over a period of decades.</p>