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Do I Need a Revocable Living Trust

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splais

Junior Member
I live in Arizona. 70 year old single male with one living relative, a sister. I intend to leave my entire estate to my 25 year old unofficial adopted son. My primary estate consists of two houses, two vehicles, a boat and personnel property. The total estate has a value of about $500,000.

Question: Do I need or would it make things easier on my heir if I have a Revocable Living Trust, or will just a will do in my case?

Question: If I do a trust will I have to transfer all the major assets into the trust, or will (what I think is called a roll over will) automatically do that on my death.

Please let me know if I haven't been clear.

Steve
 


anteater

Senior Member
Question: If I do a trust will I have to transfer all the major assets into the trust, or will (what I think is called a roll over will) automatically do that on my death.
No, it would not be automatic. The will would still have to be probated in order to give the executor the authority to transfer the assets to the trust.

There are advantages/disadvantages to either choice. Generally, the living trust route is greater expenditure and work upfront - creating and funding the trust. The will/probate route generally has the greater expenditure and work on the back end - the expense and time spent on probate. (Although, I've never heard that probate in AZ is particularly expensive or cumbersome.)

Either way you go, don't forget about durable powers of attorney for finances and healthcare.
 

curb1

Senior Member
The trust would make the situation a clean transfer of assets to the "25 year old unofficial adopted son". It would just be a matter of changing the titles from the trust to the person when you pass.

Yes, the titles to the property should be changed, but that is not a big deal. Any bank accounts could be left outside the trust and be paid on death to the person.
 

splais

Junior Member
Thanks for the help. I just want to clarify a couple of things. I have a good existing will that includes the two house. Everything I have is going to one person. Am I correct in the following:

If I put the two houses in a Living Trust I would transfer ownership from me to the trust.
Second, would I keep existing will or would I do a Pour-over Will that would replace existing will.

thanks
 

curb1

Senior Member
The "Pour-over" will would make sure all remaining assets (if any) could be distributed immediately upon your passing. It would be a simple document that is routinely included with the trust document. The important thing to do is to make sure your " two houses, two vehicles, a boat and personnel property" are titled with the trust, then the transition can be simple and immediate.

The assets would be within the trust but you would have total control of the assets if you are capable.
 
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anteater

Senior Member
The "Pour-over" will would make sure all remaining assets (if any) could be distributed immediately upon your passing.
Whoa, curb. A pour over will is like any other will. It still must be admitted to probate to be effective. That means that there would be some delay in distributing any assets covered by the will to the trust.
 

curb1

Senior Member
Thank you. That is different than my attorney explained to me, but I could have inferred something that he didn't imply. So if I have a set of golf clubs that are not listed in the trust, what happens to them? They have to go through probate?
 

anteater

Senior Member
So if I have a set of golf clubs that are not listed in the trust, what happens to them? They have to go through probate?
Theoretically? Yes. (Or a small estate procedure.)

And, curb... Let's not go down the reductio ad absurdum rabbit hole. OK?
 

TrustUser

Senior Member
hi ant,

that is a common mistake - thanks for pointing it out.

people do tend to think that pour-over wills are automatic.

and often they operate as such. since usually there is some amount of dollars before any real probate proceedings need to occur.

and as a norm, the only stuff leftover to "pour in" is way below that amount.
 
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splais

Junior Member
I read so much need to clarify a couple things. Of the two houses I own one is paid for and the other has a mortgage. The mortgage holder says I can't put it into a trust without refinancing. I also have a current will that lists everything mentioned in the first post. I can change the ownership on the paid for house fairly easily and put it into a trust if I want to.

Here are my questions:

If I did a Living Trust and Pourover Will, the Pourover Will would need to supercede the existing will - Correct?

The Pourover Will would take the second house, boat, vehicles, etc and any other property and put them into the Trust after my death, if the trust is worded that way - correct?
 

anteater

Senior Member
The mortgage holder says I can't put it into a trust without refinancing.
The lender may be incorrect. One of the exemptions to due-on-sale clauses under 12 U.S. Code § 1701j–3 - Preemption of due-on-sale prohibitions is:

(d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—
...

(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property

If I did a Living Trust and Pourover Will, the Pourover Will would need to supercede the existing will - Correct?
Yes.

The Pourover Will would take the second house, boat, vehicles, etc and any other property and put them into the Trust after my death, if the trust is worded that way - correct?
Yes. But it isn't really the provisions of the trust that get the assets there. It is the provisions of the pourover will. The trust would state what should happen with the assets once they become part of the trust.


Just another consideration. Arizona recognizes beneficiary deeds for real property. That would provide another alternative to convey ownership of real property to a beneficiary upon your death outside of probate.

http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/33/00405.htm&Title=33&DocType=ARS
 
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