will or trust

[howardmarshall]

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

i have been divorced for a few years. our son is seven. i have the following assets: life insurance with son as beneficiary; checking accounts & savings accounts with son as beneficiary (pod or tod - can't remember which is which). retirement accounts with son as beneficiary; real property in texas (raw piece of land) in my name. vehicle in my name. general household items like television etc. some credit card debt < $2000.

trying to determine if a will is enough. i have 2 concerns with a will. i can assign a property manager to manage the assets if son is under age at my death. the out of state land. not sure how to handle. also not sure if ex can come after will.

any ideas appreciated

thanks

 

[LdiJ]

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

i have been divorced for a few years. our son is seven. i have the following assets: life insurance with son as beneficiary; checking accounts & savings accounts with son as beneficiary (pod or tod - can't remember which is which). retirement accounts with son as beneficiary; real property in texas (raw piece of land) in my name. vehicle in my name. general household items like television etc. some credit card debt < $2000.

trying to determine if a will is enough. i have 2 concerns with a will. i can assign a property manager to manage the assets if son is under age at my death. the out of state land. not sure how to handle. also not sure if ex can come after will.

any ideas appreciated

thanks

A trust is probably wiser while your child is a minor. You can name someone as trustee that you can trust to preserve the money and assets for your child. Then in your will you explain the trust and how its to be handled.

 

[justalayman]

if you simply use a will (no trust) your assets are subject to claims by your creditors. If a trust is properly constructed, your assets could all escape the claims of creditors against your estate.

 

[curb1]

justalayman,

You said, "If a trust is properly constructed, your assets could all escape the claims of creditors against your estate."

Could you expand on that? Would the trust "escape the claims of creditors"?

Where can I buy one of those?

 

[anteater]

Where can I buy one of those?

Walmart has them on special this week.

 

[TrustUser]

A trust is probably wiser while your child is a minor. You can name someone as trustee that you can trust to preserve the money and assets for your child. Then in your will you explain the trust and how its to be handled.

a will does not explain how a trust is to be handled. that had better be done in the trust document itself.

a trust is a self-contained document. it, and it alone, specifies everything regarding the assets that have been properly placed in the trust.

 

[TrustUser]

ant,
you are obviously being sarcastic - LOL..

curb,
i cant tell if you were being sarcastic or you were being serious. in case you were serious, an irrevocable trust, with proper wording, can protect the assets in the trust from creditors of the beneficiaries.

note that this is different than creditors of the actual assets in the trust.

 

[TrustUser]

howard,

i am not a divorce specialist, but it is my understanding that once a divorce is finalized, neither spouse has any claims on the other. that is the whole point of the divorce in the first place, isnt it ?

 

[anteater]

ant,
you are obviously being sarcastic - LOL..

curb,
i cant tell if you were being sarcastic or you were being serious. in case you were serious, an irrevocable trust, with proper wording, can protect the assets in the trust from creditors of the beneficiaries.

note that this is different than creditors of the actual assets in the trust.

Well... I don't know. I passed a Walmart this morning and the blue light was flashing. It could have been for trusts on sale...

I kind of doubt that the OP was thinking of irrevocability.

But, with an out of state property, placing at least that property in a trust would probably be appreciated by whoever eventually administers the estate. And, it is California...

Unless there is some odd provision in the divorce decree, the ex simply is no longer an interested party to the testamentary arrangements.

 

[curb1]

No, I was serious. The quote was "If a trust is properly constructed, your assets could all escape the claims of creditors against your estate."

That would be a hot item. I'm thinking that would be very good for people to buy businesses they can't afford, or houses they can't afford, or cars they can't afford, or baseball cards they can't afford, or just about anything they can't afford.

They could even buy the trust document that they can't afford. Wouldn't that raise some eyebrows. I wonder how the IRS would deal with a trust that "could all escape the claims of creditors against your estate"?

 

[justalayman]

No, I was serious. The quote was "If a trust is properly constructed, your assets could all escape the claims of creditors against your estate."

That would be a hot item. I'm thinking that would be very good for people to buy businesses they can't afford, or houses they can't afford, or cars they can't afford, or baseball cards they can't afford, or just about anything they can't afford.

They could even buy the trust document that they can't afford. Wouldn't that raise some eyebrows. I wonder how the IRS would deal with a trust that "could all escape the claims of creditors against your estate"?

I did not explain it completely. TrustUser did make a point which I failed to and will defeat your arguments presented here:

note that this is different than creditors of the actual assets in the trust.

a creditor with a lien on a property, even if that property is placed in an irrevocable trust, can always reach that asset. It is 3rd party creditors (creditors with no direct attachment to any specific asset placed in the trust) that you will protect the assets from.

In other words, if you buy a house and it has a mortgage, that mortgage will allow the creditor (bank/lender) to demand payment or the asset to pay off the debt. Somebody such as a hospital owed a debt by the trustor cannot reach the house though, if the trust is properly constructed.

when I said "claims against the estate" I was referring to general claims against the estate as opposed to claims against an asset of the estate.