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… scary article on court-appointed financial guradians in Florida.

{{ In some states, the only requirement to be a guardian is to be 18 years old. Florida has more requirements including a background and credit check. But still, compare the 40-hour training course with, for instance, the 900 educational hours required to become a licensed barber.

Yet these caretakers control people’s lives and money. In just one Florida county, Palm Beach, guardians control about $1 billion, according to Anthony Palmieri, deputy inspector general for the Palm Beach Circuit Court.

“You have your nail techs and tennis pros — their business is not so good and they want something more lucrative and they’re jumping into guardianship,” Palmieri said. }}

Florida guardianship case illustrates lack of safeguards as number of cases rise - The Washington Post

intercst

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Everyone with assets should read “The Retirement Nightmare: How to Save Yourself from Your Heirs and Protectors : Involuntary Conservatorships and Guardianships,” by Diane G. Armstrong Ph.D..

Also watch the rather horrifying movie, “I Care A Lot.” I Care a Lot - Wikipedia

Then set up a trust to protect yourself from these parasites.
Wendy

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Same thing going on in Michigan. Has been going on for years. Court appointed “guardians” rob their charges blind, and it’s all legal. The current, clearly “Commie”, Gov has been trying to do something about it.

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See, this here has been my biggest nightmare and jaw-jacker. In case of death I have all the necessary wills with detailed instructions etc etc, and even a professional executor. If I am lucid and mobile I can handle things myself. But I have not been able to find a secure way to cover myself if I am in a bad way, disabled, but unfortunately still alive. I have avoided using relatives 1) The don’t know what they’re doing and B) Are as old or older than I am so no reason to think they can pinch hit. I have heard of these court appointed guardians for years and want to avoid that too.

I haven’t moved on a trust yet because is heard the minimum they want to handle it is like 1 million or 2. And how does that work if I am laid up anyway? Who gets “access” to the Trust to start paying bills? And my understanding is once it’s in a Trust the money isn’t mine anymore. A thought that doesn’t appeal to me!

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The trust can be drawn up with you as the trustee, unless incapacitated. Then the trust names the successor trustee. My mom was sold a trust. Just made my job more complicated. A POA would have been enough.

If you come up with a solution, let the rest of us know. I have no parents, siblings, spouse, or spawn. For the last few years, when dining with friends, I have been floating the comment “I should adopt one of you guys, so you’ll have the job of wiping the oatmeal from my chin in the nursing home”. The only guy who bit still has both parents living, so they might object to the idea.

Steve

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So, I guess a Trust isn’t the way to go? I didn’t know I could be the Head Trustee Master of All Time Space and Dimension as long as I’m able. That makes an enormous difference. As far as complicating things after the fact…

I’m like you. Not a lot of people to worry about or worry about me. I do have the three siblings, but none of them will be involved. I have a big American Bank acting as executor right now. Maybe the Trust fills that function? If not the only instruction I’ll require are: 1) Pay the bills while I’m still alive. 2) When I’m not, dispose of the minimal stuff I might have left eg furniture, maybe a car, a few guitars etc 3) If there’s any money left give it to the people on the list.

I’m sure there might be some extra details but ‘complicated’ only comes into play when there are people involved

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They might rip you off worse than a random Florida 18 year old financial guardian would! Their only goal will be to keep the process going long enough for them to collect as many fees as your money can supply.

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What are you even talking about? I’m dead. The Will is The Will. The instructions are clear. And what does this have to do with a Trust?

And what is your infallible solution to every and all imaginable problems? You sound like my mother. Everybody was always out to get her. And when they weren’t, they could have been!"

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The bank isn’t going to administer your estate and will for free. Have you negotiated a lump sum fee from them? Or is there some language in the contract that the fee is “usual and customary”?

Back in 2010, I wrote an article on my experience with the New Britain, CT Probate Court after my late cousin died without a will, leaving an estate of about $400,000. I was so incensed by the behavior of the court appointed executor, that I fronted about $12,000 in legal fees to sue him.

intercst

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I was running mom’s trust, while she withered away in a nursing home from alzheimer’s,.from 1996 to 2009. The first irritating thing, was getting a TIN from the IRS, because the trust became a separate tax entity. Then filing quarterly estimated taxes, then filing the annual tax returns, and the tax rates on a 1041 are higher than a 1040, and all that work times two, Federal and Michigan state tax, in addition to doing her personal state and federal taxes. She was an Arizona resident for the first part of 96, so I added Arizona state income tax, for a total of five tax returns that year, plus my own state and federal. I do taxes by hand, and I had a day job then, so I basically spent most of February and March doing taxes.

If there was no trust, just a POA, I could have managed everything just about as well, without ever hearing of a form 1041. I am not aware of anything that trust helped with. Perhaps there is a CFP sort on this board that could point out some benefit to a trust?

Besides having the bank be executor of your estate, someone needs to run it through probate. I was lucky with both my mom and dad, as they both died broke. I learned there is a form, in Michigan, that I can fill out, provide an inventory of their assets, if under $1000, and who paid the funeral home, and mail it to the probate court. Someone at the court assigns the estate to me and rubber stamps the judge’s signature on it.

My aunt had assets so I called the lawyer who wrote up her will, to run it through probate. It’s a wonder that shyster hasn’t been disbarred. On the second or third attempt to ask him to probate it, I got tired of his waffling and demanded “do you want the job or not?” That aunt’s will set up a trust for the benefit of her sister, with me, of course, as trustee (hello again, form 1041) I was trying to set up a brokerage account, so I could get a better return than bank CD interest. Had the brokerage person and the lawyer on the call. Broker said what she needed from the lawyer to set up the account. He agreed to provide it. I waited. A couple weeks passed. I called the brokerage. Nope, she had not received the information from the lawyer. Waited some more. Broker still had not received the information he had promised to provide. I called the lawyer “the broker has not received that information”. The lawyer said he wasn’t going to bother with it. I said “why didn’t you say that in the first place?” No answer. Why hasn’t that shyster been disbarred?

My other aunt has moved to North Carolina, living with her son. Her son is 63-65ish, but in poor health. My aunt is 94. She might outlive him. So who is successor trustee on her “family trust” as well as executor of her estate? Her other son? Nope. Me. First I heard that she made me successor trustee of her trust was when I received a letter from Ameriprise informing me. Then she made a new will, naming me successor executor, if Rick dies first.

North Carolina has an income tax. She has lost her marbles enough that her affairs need to be managed. If Rick dies first, then I will be doing her state and federal tax, her state and federal tax on her family trust, plus the state and federal tax on the trust her sister set up for her benefit. Six freaking tax returns, instead of two, because of those darn trusts.

As I said, if there is a CFP sort on this board that can name any benefit of a trust, say something, because my experience, over 27 years, is they are a pain in the neck.

Steve

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I am aghast! (Is there an “H” in there?) You don’t know about this? They take a percentage of the estate they’re handling. Nationwide it runs about 2% in most states and there’s a requirement for a minimum sized estate before they deign to break a nail or muss a hair with it. The estate size varies with the bank. Don’t have enough in the pot? Try a smaller bank.

That all sounded cool with me. I expect to pay something to somebody. There’s probably a 40% chance I will be the last one standing anyway. I will make any needed adjustments with the money in that case.

If I’m all spent down I guess there’s nothing to worry about then, is there? There is a State or County office almost everywhere that does a Mannix on people who die and don’t leave any notes and finds out if there are any relatives or bank accounts, turns off the gas and electricity. Won’t be my problem. Now and then you read stories about some old guy who knew no one dies in a 1 br brooklyn apartment. The “county team” goes to track down his loose ends and find out he’s worth a million and has one cousin he hasn’t seen in 20 year. I’m trying to make it easier than that.

Like I said my problem is not Dead or Alive. My problem is The Twilight Zone

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There is always the question of what they do for that 2% Pay the bills and do the taxes? Attend care meetings at the nursing home? Keep you provided with clothing or anything else the nursing home does not provide? Stuff we provided when my mom was in the nursing home, besides clothing included a small TV, and a chest of drawers, because all the nursing home provided was the bed, a night stand, and a chair for a visitor to sit in. My aunt hauled mom to the doctor and dentist appointments, as long as was practicable. Finally had to give that up and let the doc and dentist that came in to the nursing home provide those services.

Steve

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Not that complicated at this end. Death ----> Stuff—> executor----> stuff dispatched IAW instruction -------> Some people end up (hopefully) with a lot of money. There’s a reason why I do things the way I do. So, I don’t have to deal with the things other people do. Any unforeseen events are exactly that. Unforeseen and unforeseeable. Not my problem. The will itself must be executed and cannot be contested. It’s already been reviewed and it passed every test.

You can try again with “yeah but what if” or “Oh no, you NEVER KNOW!” I’m not here to write a Columbo script. Again, that kind of hand wringing reminds me of dear ol’ mom.

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Have you read anything I’ve written? They’ll do as instructed. It’s the law. They already know what it says. They wouldn’t have taken the case and I wouldn’t have selected them unless that’s the way it goes. I made it easy for them and me. No, they will not attend care meetings because that is not their job. I’d still be alive. The Will and the Bank only come into play in the event of my deadness. That is the whole basis of this thread.

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Like you said, what if you end up in the Twilight Zone. How much will a hired trustee do for his skim?

Columbo scripts were pretty simple really: person is killed. Columbo has a prime suspect, but little/no evidence. Columbo messes with the perp’s mind, until the perp does something incriminating, while Columbo is there to put the clinks on him. If a perp kept his cool, he could probably get away with it, because Columbo rarely had really good evidence.

Steve

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Let’s start with an assumption - that you are in the USA. If that’s not correct, ignore everything that follows. I know nothing about trusts outside of the USA.

So let’s try to clear up some mis-conceptions here.

Your statement “the minimum they want to handle it” is a bit ambiguous. Fortunately, I read ahead and you are referring to a professional Trustee/Executor like a bank. I’m sure there are many banks and trust departments that will handle smaller trusts or estates. They will just have a minimum fee they require for smaller amounts.

How does it work if you are laid up?

With a trust, you are the initial trustee and can name a successor (or even a series of successors) to handle the trust if you are incapacitated or dead. You can even choose to resign as trustee without being incapacitated. You might do that in anticipation of a temporary incapacity (such as a surgery that is expected to make it hard for you to manage things for a while) or a pending permanent incapacity - like being diagnosed in the early stages of Alzheimers. You can also define a way to determine incapacity, such as the agreement of named people or a declaration by a medical doctor.

Who gets “access” to the Trust to start paying bills?

The person or organization who gets access to the trust is the named successor trustee.

And my understanding is once it’s in a Trust the money isn’t mine anymore.

That is not exactly correct. While technically the money does belong to the trust, you will put instructions into the trust to tell the trustee how to handle the money in the trust. You tell them what to pay and when to pay it - in general terms, not the detailed specifics. (So you don’t tell them to pay the March electric bill on April 10, you just tell them to pay your ordinary expenses as they come due or something like that.) You tell them how to invest the trust funds - again in general terms, although specific restrictions or prohibitions might be appropriate. (Perhaps you might instruct them to invest only in index funds, for example.) You can define some different restrictions (or none at all) for yourself as the initial trustee, but put tighter restrictions on successor trustees.

You are the initial beneficiary of the trust - the person for whose benefit the trust exists. You also name the beneficiaries who will receive the funds once you have died, just like you do in a will. And you can even put restrictions on when they will receive the funds. One popular restriction is to keep the funds in trust for younger beneficiaries until they reach some specific age - such as 25 or 30. You might allow younger beneficiaries to receive some smaller amounts (like 10% of their share or a specific dollar amount) at a specific age with more (or the rest) at a later age.

While you are alive and competent, you are able to change the terms of the trust at any time. You can name different successor trustees. You can change the beneficiaries. You can change any part of the trust that you like. As the person who created the trust, one thing that you will include is the right to change the trust at any time as you see fit. (You might include something that limits that power to times when you are not incapacitated - a little bit of a way to protect yourself from yourself.)

So all of the money remains fully in your control until you choose to relinquish control, or you are determined to meet one of the conditions you define ahead of time to have control taken from you.

One issue here is that you have people (including perhaps a professional trustee organization) that you trust to handle things. If you really don’t trust anyone but yourself, you’ll need to do something else.

–Peter

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The process today is pretty simple. Go to the IRS web site. Spend 15 minutes or so answering questions. If everything is in order, you get the EIN when you finish.

I’d also question why you needed a separate EIN. Typically, the trust doesn’t become a separate taxpayer until the grantor (your mother in this case) has died. Until then, it’s a grantor trust which is disregarded for tax purposes.

Yes. But you usually get around that by paying out all of the income to a beneficiary or for their benefit - again your mother in this case. Paying her medical bills from the trust (and her nursing home and pretty much anything else paid for her benefit) is considered a distribution to her. Then all of the income - up to the amount distributed - is passed thru to her and not taxed to the trust. But that’s only if you actually need to file a 1041, which isn’t always going to be necessary in this situation.

As I’ve kept typing, it’s possible the trust became irrevocable when she became incapacitated. In that case, the trust would become a separate taxpayer, but the income could still be distributed to her.

As a professional tax preparer, I handle these kinds of returns all of the time. It takes a couple hours of your time with me, plus gathering all of the raw data - 1099s, summaries of payments made out of the trust, any income that’s not on a 1099 (often a piece of real estate that is rented out) plus the stuff you’re used to gathering for your own taxes. The first year can be a bit difficult, but once that is done, most people can gather the needed information in just a few hours spread over as many days as you’d like.

Oh - there was consumer software available, even back then. It’s certainly available today.

It is possible to say “no”. But it’s family and you know they need the help, so you say yes. I get that.

Because I’m an accounting guy, I’m the successor trustee for my parents, my sister (who has no children) and was the first successor for my brother and his wife - until their kids became adults. Which has happened. But if I’m still around when the time comes (not a guarantee since I’m the oldest of my siblings), I’m sure they’re going to ask me to help - particularly since they’re both out of state now and I live just a few minutes away. So I’m not the right one to throw stones here.

–Peter

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I remember doing K-1s, but it has been so long that I don’t remember the details. As it happens, I tossed all those tax records, and her estate, and her sister’s estate, in the shredder only a couple months ago.

iirc, the way mom’s trust was written, it was only revocable as long as she was able to revoke it. When she became permanently impaired, the trust became irrevocable.

Where the 1041 tax rates are really taking a bite is the trust my deceased aunt provided for her still living sister. Because of the requirement in my aunt’s will, and her verbal instructions to me, I can’t simply hand the money to the surviving aunt. It has to be doled out in amounts sufficient to cover her current expenses. Rather than my mailing her a check each month, so that she would then need to drive to the bank and deposit it, I bought an annuity for her that would pay for her life only. That way, the annuity company handles the monthly disbursements, direct deposited to her account. Thing is, she exceeded the annuity company’s actuarial tables about 3 years ago, so the distributions, some $1400/month, are completely taxable, at 1041 rates. At least, the annuity company withholds both state and federal tax from the distributions, so I don’t have to deal with whacking big quarterly estimated tax payments.

I always seem to be on the wrong side of the state. When my dad died in metro Detroit, I was living in Kalamazoo. When my mom and aunt died in Kalamazoo, I was living in metro Detroit. My surviving aunt was living in Columbus, OH (only a three hour drive), when I first started running the trust, but now she lives with her son in North Carolina (holey mackerel)…but her cemetery space is in the family plot in Kalamazoo, along with her late husband.

My aunt has a sure fire system: don’t give me a chance to say “no”. :wink: Name me on the documents as the person to handle everything first, then tell me. No matter how much I squawk, she ignores it, and does nothing. In her mind, everything is handled, by dropping it in my lap. Thing is, she has never sent a copy of her trust document, or the will, to me, so I don’t know what I would need to do. I was talking about this with her son’s husband, suggested I assign to him a power of attorney to act in my place regarding her trust and estate, if her son pre-deceases her, but he didn’t want to deal with it. One lesson I took to heart from B-School is “failing to plan, is planning to fail”. I always want a plan.

Steve

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