If you are single, you should strongly consider setting up a revocable trust with a trust company designated to serve should you die or become incapacitated.
Q: I’m 67, retired with a home, cars, pension, Social Security, 401(k), Roth IRA, no children, no wife and no debt. My assets will be distributed mostly to charities, with some cash passing to family members. I want to be sure things go smoothly while I'm alive if I travel internationally for extended periods, and also after I die. How do I do that? How do I organize an estate sale for all the items in my house such as books, records, collectibles, furniture, etc.?
A: You should strongly consider setting up a revocable trust with a trust company designated to serve should you die or become incapacitated. After your death, it would handle all of the matters you mentioned and could also step in and handle matters if you are not able to do so because of ill health.
You should not concern yourself with the logistics of what will eventually happen to all the items in your house. That can be handled by the trustee after your death in the manner you direct in your revocable trust.
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Q: Decades ago, my parents created a revocable trust for their assets, which now total about $6 million. After my father’s passing several years ago, our attorney updated the trust and my mother’s will for future, equitable distribution of assets to each of us. The attorney said he would convert the revocable trust to an irrevocable trust after my mother died. I recently read about how the IRS has changed the rules for irrevocable trusts so that they are now exposed to capital gains taxes before adjusting the cost basis for the heirs. If this is true, what can we do to keep from contributing to our politician’s revenue stream?
A: If your parents' revocable trust is like nearly all other revocable trusts a married couple would create in the normal course of estate planning, then it will not cause you the problems you are worried about.
Your concerns stem from a number of articles that were written in national publications earlier this year about IRS Revenue Ruling 2023-2.
That ruling addressed the adjustment in cost basis for irrevocable trusts where the grantor is treated as the owner of the trust property for income tax purposes but not for estate tax purposes. These trusts are often referred to as Intentionally Defective Grantor Trusts, IDGTs, or "defective trusts" for short.
This type of trust is almost certainly not the type of trust your parents created. Defective trusts are usually created when a very wealthy client wants to transfer a business or other valuable assets to their children or other descendants with favorable gift, estate and generation skipping tax results.
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The information in this column is intended to provide a general understanding of the law, not legal advice. Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to: stateyourcase@lipmanpc.com.
Revocable trust held at trust company an option for single person
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26.12.2023
If you are single, you should strongly consider setting up a revocable trust with a trust company designated to serve should you die or become incapacitated.
Q: I’m 67, retired with a home, cars, pension, Social Security, 401(k), Roth IRA, no children, no wife and no debt. My assets will be distributed mostly to charities, with some cash passing to family members. I want to be sure things go smoothly while I'm alive if I travel internationally for extended periods, and also after I die. How do I do that? How do I organize an estate sale for all the items in my house such as books, records, collectibles, furniture, etc.?
A: You should strongly consider setting up a revocable trust with a trust company designated to serve should you die or become incapacitated. After your death,........
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