Trust questions

[swrdmbo]

What is the name of your state (only U.S. law)? Ohio

My parents made a revocable living trust and my Father has since passed away, leaving my Mother as the sole owner of the trust. I am the trustee upon her death but I have several questions.

There are 5 properties in the trust, her residence, and four rental properties. Two of the properties she may sell in her lifetime so they may not be a problem. The other two are doubles, worth about 150,000 each. She wants my brother to have one, and me to have the other. My sister, was bought a condo in 1995 that was worth approximately the same as the doubles at that time. We are all in agreement to this.

Reading this site more and more makes me question the way this trust is set up. Shouldn't my mother designate in the trust that one of these doubles should go to me, and one to my brother? I do not expect there to be any disagreement among us ( my brother and sister), and we have all discussed this, but I realize the trust says the assets are to be distributed equally among he three of us.

So as trustee I would not be doing as the trust specifies as it is written now. What would be the best way to accomplish this? I would like to make sure this is done properly so as to avoid any problems this may create if we just deeded the doubles to me and my brother when I become trustee. My sister already has the property of hers deeded in her name.

Any advise will be greatly appreciated.

Also...is the trustee expected to take a percentage of the trusts value? If I don't want to take any money is it one of those deals where the IRS is going to say I have to claim a certain amount anyway? (like when you sell a home to a child or similar?)?

Thanks for any input!

 

[curb1]

1) As trustee, you don't have to take a payment for services. In this case it doesn't seem appropriate if you three beneficiaries are cooperating and working on this together.

2) There won't be any problem the way you describe because the only people who might make a complaint is one of you three. No one else will see the trust. Just make sure you all agree, or there could be/will be a problem.

3) You might consider the tax consequences of her selling of two of the units before she dies. Is there going to be a significant capital gain on these properties? If she holds them until death then there will not be that tax for you with the stepped up basis.

4) What is to be done with the house? Split three ways?

 

[swrdmbo]

Thanks for the reply. The two income properties are probably worth less than 60K combined and she may have a tax bill on that of 15% on the capitol gains. I am not sure how long they have been depreciating the properties either.

I am going to ask the CPA what her tax liability would be if she sells them.She may want to reconsider, but they are high turnover, and a real aggravation to her. We will see.

I really do not expect any problem with my sister as far as the doubles go. She is aware of my parents intentions. My Mom is worried though that things could go wrong so would a letter indicating her desires as to the doubles be worth the paper it would be written on?

I also thought of maybe a survivorship deed with the trust and then our respective names on the appropriate double. Would that work?

Thank you for your time.

I am glad to hear that the IRS would not make me claim any fee as I really did not want to have to deal with that, or collect a fee for that matter. Thanks again.

oh... and yes...the house will be sold and split three ways.

 

[curb1]

Without a doubt, the better you can clarify/specify the trust intentions now, the better the results. This procedure will be simple, especially since everyone is in agreement.

 

[TrustUser]

the legal way to accomplish this is simply have your mom do an amendment to the trust, stating her desires. and of course get the amendment notarized.

 

[swrdmbo]

Thanks to both of you for your help. I will definitely have her do that.