# Creating a trust



## Bananapeel (May 4, 2015)

Since I am not married I can't depend on a spouse to save my assets for my kids in the event I die prematurely. My kids are minors so assets left directly to them would be controlled by my XWW, unless I have something setup to protect their inheritance from her control/use as their legal guardian (my XWW is not financially responsible). I've been considering putting together a revocable trust. Have any of you done a trust and if so what has your experience been? Is there much difference with the do it yourself kits vs using a lawyer? Anything I should be wary of?


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## Lostinthought61 (Nov 5, 2013)

We have that in place, we have 4 kids and if both my wife and I die, we had set up a Trust that dispensed funds based on day to day needs, education and then an allotment based on age....so for example, their guardian ( in this case it was wife's brother, would only have access to pay for their clothing, food, housing shared cost, and the like, when it was time for them to go to college then again money would be there for all of them, andy money left over was to be dispensed in age 25, 30, 40 and specifically required them to have a pre-nup so their spouse is entitled to nothing unless they have children of their own. Since all of my kids are in college, and within two years will all complete that, then the Trust would only require to dispense an amount based on age, if we die within the next two years. but i have all told them if they get married they must have a pre-nup so that these funds will only go to them and their children.


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## Bananapeel (May 4, 2015)

I like the idea of not co-mingling trust money with communal assets if the kids get married. I'll definitely have to think more about that one. Thanks!


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## Lostinthought61 (Nov 5, 2013)

Bananapeel said:


> I like the idea of not co-mingling trust money with communal assets if the kids get married. I'll definitely have to think more about that one. Thanks!


Here is how i see it, i each give my kids 100k for them to buy their first house and they are married, and let's say they get divorced some time in the future, why should the spouse get 50k of that if they sell the house....sorry Homey don't play that game. what they brought in they should take out.


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## Bananapeel (May 4, 2015)

I just learned about a testamentary trust. That looks like it might be a better choice for my purpose right now than a revocable trust. I'm definitely out of my element with this stuff.


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## Acoa (Sep 21, 2012)

If you are going the trust route, I highly recommend using a lawyer to help draft it. I got a fairly extensive amount of work done for $1500, well worth it. 

What the lawyer did was review my living situation and recommend a few different ways I could go, with some pros and cons of each. Ultimately this what I set up...

Revocable living trust - I have since transferred all of my assets to this trust (bank accounts, investments, deeds and titles).
Living will - Including a conditional power of attorney (to my brother), medical power of attorney (to my Aunt), and HIPA privacy releases to both.
Will and testament with instructions on setting up testamentary trusts. 

The idea behind having revocable trust is to avoid the money going through probate. If that happens, the money is not available to the beneficiaries until after it goes through the courts. This also costs money. By having the money in a revocable trust, my designated trustee(brother) can simply take over managing my assets by presenting a death certificate. All life insurance policies pay into the revocable trust. My brother then can move the money to the testamentary trusts (which don't exist until after I die). He manages the funds, as I've directed him to until certain ages of each child, when they get the money directly (which is all spelled out in the will). 

It's a little confusing, but I think this works well as my Ex won't control the kids funds directly. She will get the money through my Brother, which will include a monthly stipend for supporting the kids, and then she (or the kids as they are old enough) can request money for things such as purchasing a vehicle, college expenses, weddings or a home. I have given my brother discretion to approve of disapprove of these special requests in accordance with the best interests of the children.


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## Bananapeel (May 4, 2015)

Thanks Acoa. I am still in the planning stage and trying to get some ideas on what I want and what is best for my situation. One thing I was thinking about for doing a testamentary trust instead of a revocable trust is the tax advantage. With a revocable trust the trust would own my house so I doubt I'd be able to claim the mortgage interest deduction. Of course, the opposite problem is without a revocable trust my property would go through probate. I think I'm going to use an attorney for this.


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## Thor (Oct 31, 2011)

I recommend you learn everything you can but then go to a real atty to do the documents. You don't want it messed up. Your trustee is the vital component here, so it has to be someone you can fully trust to execute your wishes accurately. And you'll want a backup trustee just in case the first trustee becomes unable or unwilling to continue.


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## kristin2349 (Sep 12, 2013)

Bananapeel said:


> Thanks Acoa. I am still in the planning stage and trying to get some ideas on what I want and what is best for my situation. One thing I was thinking about for doing a testamentary trust instead of a revocable trust is the tax advantage. With a revocable trust the trust would own my house so I doubt I'd be able to claim the mortgage interest deduction. Of course, the opposite problem is without a revocable trust my property would go through probate. I think I'm going to use an attorney for this.



Re: Mortgage interest deduction, that is still deductible. The mortgage is in your name, interest is paid by you, you get to deduct it.


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## Acoa (Sep 21, 2012)

kristin2349 said:


> Re: Mortgage interest deduction, that is still deductible. The mortgage is in your name, interest is paid by you, you get to deduct it.



Yup 


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