Has anyone ever set up a trust?

[Fat Elvis]

How does it work?

What are the benefits?

Any info would be greatly appreciated.

Thanks

Fat E

[teedubya]

well i am looking into it... this is a banner year financially for me... so Im looking long term.

There are huge tax benefits by being in a trust... also, your heirs benefit.

Say you have 1/2 billion in a trust... and you leave it to your kid, Thin Elvis. Well, Thin Elvis marries a money grubbing whore, i.e. any woman. Your son is a trustee for the trust, however, your daughter in law is nothing. She has 0 access to the cash. If Thin Elvis and MGW get a divorce, MGW gets nothing.

no need for a prenup with trusts, one of the many good reasons to get one.

there are many other benefits, but its almost 1am, and Im going to get in bed my with my MGW. [marvelous, gorgeous wife.]

[Amnorix]

There are many types of trusts, established for a variety of reasons. I'd suggest some Internet research to get more of a general feel for them, and then ask specific questions you may have.

[Fat Elvis]

There are many types of trusts, established for a variety of reasons. I'd suggest some Internet research to get more of a general feel for them, and then ask specific questions you may have.


We'd be looking to set up a revocable living trust. Would we have to use our (or one of our) names on the trust, or could we use another name on the trust?

When we recieve income, does that income go into the trust, and if so, would we have to designate the trust as the payee?

My current income from work is tax exempt; if that money went into a trust, would it become taxable income?

[Amnorix]

We'd be looking to set up a revocable living trust. Would we have to use our (or one of our) names on the trust, or could we use another name on the trust?

When we recieve income, does that income go into the trust, and if so, would we have to designate the trust as the payee?

My current income from work is tax exempt; if that money went into a trust, would it become taxable income?

Ah. I figured you wanted Trust 101 type lessons. You're into seriously advanced trusts, which are definitely beyond my knowledge. Sorry.

I can answer the first question, which is that generally you can give the trust any name you want to. It is usually the case that people give it a descriptive name that is meaningful, but I don't see any reason you couldn't call it the "45376 Silly Name Trust" or whatever.

For the tax questions, I'd contact an accountant or tax attorney if you can't find what you need. Here's a website, though I doubt it will help much:

http://www.irs.gov/businesses/small/article/0,,id=106538,00.html

Good luck.

[donkhater]

I've set up two seperate trusts for my special needs son and two daughters. Neither one has a lick of money in them now, but the various life insurance policies, 401k, and mutual funds have them as the primary benefactors should my wife and I kick the bucket.

The most important thing about a trust is that it isn't considered an asset by the government. If/when I pass on, my son will have money in his trust while not affecting his eligibility for medicaid or social security.

As for the girls, should my wife and I pass on before they are 21 or 22 (I forget now) there inheritance goes into a trust that they cannnot touch until they are of age, but will be available to whoever we designate as their guardian.

A living will and wills in general are different things altogether.

I'm 32 and my wife and I did this about 2 years ago. It wasn't that hard (with the help of an attorney) but being forced to make some tough decisions about your kid's future was a good thing to do. It cost us about $1400 for everything (not sure if this is a good deal) and I believe that bill is also tax deductible.

[Fat Elvis]

Ah. I figured you wanted Trust 101 type lessons. You're into seriously advanced trusts, which are definitely beyond my knowledge. Sorry.

I can answer the first question, which is that generally you can give the trust any name you want to. It is usually the case that people give it a descriptive name that is meaningful, but I don't see any reason you couldn't call it the "45376 Silly Name Trust" or whatever.

For the tax questions, I'd contact an accountant or tax attorney if you can't find what you need. Here's a website, though I doubt it will help much:

http://www.irs.gov/businesses/small/article/0Hello - commatard on the loose.id=106538,00.html

Good luck.

Do you know if I were an executor of the trust if I could set up a salary from the trust where I paid some taxes so I won't lose my social security disability a few years down the road?

[Amnorix]

Do you know if I were an executor of the trust if I could set up a salary from the trust where I paid some taxes so I won't lose my social security disability a few years down the road?

Generally, trusts have what's called the settlor (the person that creates the trust and injects the money or other assets into it), the trustee(s), who manage the trust, and the beneficiary(ies), who are the people who get the benefit of it.

You can't have the same person wear all 3 hats, or else the trust may be declared invalid and collapsed as a sham.

A trust can, of course, pay a salary to the trustee.

The trust Donkhater is talking about is very standard, and is called a "pour-over" trust. It is an empty shell. Just an empty trust waiting for assets to be injected into it at a certain point in time on certain conditions. This is commonly done for the benefit of minors, where you would name an older family member the trustee in the event you and your spouse die, for example.

You're into heavy estate planning stuff that is beyond my expertise.

A few comments -- Social Security/Medicare are very complex, and involve multiple layers. My understanding (you need to CONFIRM) is that SSD (Social Security Disability) is not income/asset or need based. Supplemental Social Secuirty Income (SSI) *IS* income/asset or need based.

Here's a link to what may or may not be helpful.

Seriously, though, you need professional tax planning assistance. You're beyond the point where you really want to be mucking around for this stuff on your own, or taking advice from nameless BB users. :)

http://www.ssa.gov/d&s1.htm