Advice, thoughts on setting up estate with trustee

This seems to me to be nearly intractable, for reasons which I will explain below.

tl;dr version - I am married and 67. My spouse is completely incapable and uninterested in taking care of practical and monetary matters. I need to set up my will/estate with a trustee, I guess, but I have lots of reservations and worries. I am in good health but anything can happen and I want to be prepared.

The problem is not getting my husband ownership of the assets, as far as the law is concerned. The chief assets are the house, which is in both our names, and my IRA, which has his name on it as surviving owner. My social security and pension will cease on my death, but there is enough in the IRA to pay the mortgage and utilities, or if he wants to sell the house there would be plenty to pay rent and utilities.

The real problem is that he has no idea how to run a household (paying bills, taxes, maintenance, hiring a plumber, anything) and is completely uninterested in learning. If I try to discuss it he just says he will die first and he doesn’t care what happens if I die first. Also he is from a foreign country (green card) and is still pretty bad at English (and not interested in improving). He is a person who lives on emotion rather than reason.

So I need someone, a trustee I assume, who will take care of all the practical matters of life, and during all this not cheat my husband out of the money (outside legitimate fees for the service). It needs to be someone who my husband can trust and relate to, which probably means bi-lingual in his native language. They won’t have to keep my husband from over-spending, because I don’t care if he wants to blow the wad in one year and then try to live on his own social security. I only care that he gets the use of his money, and doesn’t lose resources through carelessness, like forgetting to pay the mortgage.

I can imagine such a person, but I have no idea how to find one. There is no family member on either side who would be appropriate.

Your thoughts, suggestions, experience are all welcome.

Do you have a CPA you use? If so ask that person. Or a lawyer you trust?

I’ve referred clients to both to find trustees. You can set up the trust in such a way that it can be used under very specific conditions if you’d like. But one way or the other, the trustee must be someone you…well…trust.

Can you appoint two? So they keep an eye on each other?

(Just curious!)

Moved from Great Debates to IMHO.

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I’m the trustee for my uncle’s estate and when he dies I’m supposed to call his lawyer. I think that would be the place to start: a consultation with an estate lawyer.

But you’re going to be around for a long time, right?? I enjoy your posts. :slight_smile:

Nothing to add yet on the main question. But depending on your ages and current SS benefits being received he may be able to receive a survivor’s pension from your benefits rather than his own worker’s benefits.

If you’re much more the high earner than he, that might be a nice raise for him. As you say somebody else will have to make the application for him since he won’t bother. But you working with the trustee now can certainly figure out whether this option is in the money or not.

You might look into trust companies:

http://www.investopedia.com/terms/t/trustcompany.asp

Another possibility is to simplify your financial life. You don’t need to worry about him not paying the mortgage if you have it all paid off. You don’t have to worry about him not paying property taxes if you sell the house and move into an apartment.

ETA: Agree with the poster just above.

My wife’s an estate attorney in some states but not yours. Some general advice …

You need a lawyer to set up the trust. You want the trustee to be a business, not a person. Most banks and most consumer investment houses offer trust management. There are also businesses called “trust companies” who do just this kind of work. Many outfits with “trust” in their name are now mostly real estate escrow services. But not all. So check out some local examples of them too.

Whichever business you choose as trustee, they’ll take care of long term asset management and the disbursement of a monthly living stipend to hubby.

Getting the actual mortgage and electric bill paid every month is mostly not up their alley. Some might, particularly if you’re working with a small town bank in a small town or a small trust company. Somebody like Bank of America or Merrill Lynch almost certainly won’t be willing to do that detail work for you/hubby unless you’re big-time wealthy paying big-time fees.

The best way to bridge that gap is to hire a local CPA to be a bill-payer and annual tax filer. You can set that up now and pay them a few bucks every month to handle all your routine consumer bills. That way you can evaluate their service and this won’t be something you’ll need to set up in a mad flail after your health is flagging. It also covers for the case where, much to your surprise, you drop dead.

Whatever you do, don’t download a trust form from some random website or DIY legal website. The mess that creates will be large. And hubby will suffer for it.

Whether you create the trust first or select the corporate trustee first is arguable. If you find a trustee you like, they may have a preferred law firm that are used to working together. Sometimes “working together” is code for “tag team to fleece the mark”; other times it’s honest ethical businesses who coordinate well because they do it all the time.

You may be able to have the CPA be the trustee. You want an entity big enough to have continuity; one person shops have a habit of closing suddenly when the CPA gets old or, much to his/her surprise, drops dead. But you want an entity small enough you can have some personal relationship with the person primarily responsible for the work for the next few years. Even if the CPA doesn’t want to be trustee, they may also have good suggestions for a lawyer to create the trust and the trustee firm to use.

Last of all, once you have the trust created, that requires an update of your will to fund the trust. It may also behoove you to move certain assets, such as the house or non-IRA asset accounts, into the trust now while you’re healthy. Or not; it depends on your specific state and tax circumstances. Which advice the CPA and will/trust writing attorney will be able to give.

Expect to spend $2-5K getting the trust and will set up properly. Which hubby will get back in probate problems avoided.
The hardest long term problem is that unless hubby is adjudicated mentally incompetent he’s got a lot of ability to create a mess after your gone through sloth, ineptitude, and not letting the CPA steer the car. As you say, you recognize that all you can do is all you can do. Good luck.

Can the recurring payments (bills, property tax, insurance, mortgage, credit cards) be set up to automatically be debited from a bank account? An annual review of the accounts might be required to ensure things continue to go smoothly.

But unless the trustee is providing a boutique (meaning expensive) type of service, I don’t imagine that they would have ownership of the situation such that they would anticipate and prevent some things from falling off the rails. I think your husband will have to have some ability to be financially responsible so that the estate doesn’t end up facing unnecessary penalties or litigation.

Thanks for the replies (and the kind words, Helena330, I’m sure you’ll be tired of my posts long before I stop making them). Here are some follow-up observations.

Routine bills are already set up to be paid automatically. This only requires that enough money be in the checking account to cover them.

Sorry about the wrong forum, don’t know how I made that mistake.

I don’t have a CPA or lawyer currently. I can see the wisdom of establishing one of those relationships, but I don’t know how to get started, i.e. how to pick a good reliable trustworthy one, with someone my husband can relate to. Suggestions welcome.

What about a living trust? Does that make any of this easier vs. some other kind of trust? My father had one and it made my job as trustee/executor much easier.

Any suggestions for the other kinds of services outside of strictly financial, e.g. finding someone to fix things around the house and so on? Did I mention that my husband is electronically illiterate, can’t even handle his old flip phone? Doesn’t want to learn.

My biggest worry is personal. I expect my husband to fall apart emotionally if I should die unexpectedly, and it would be a great comfort to me if there were some professional person he could trust to “take care” of him while he’s getting his feet back under him emotionally.

Word of mouth is the traditional method for acquiring a CPA or lawyer.

Maybe you should become active in a local church. The members and pastor provide support when bad things happen.

How long have you two been together? What did he do before he met you, i.e. paying his own bills, living, etc.?

I highly expect that he’s become accustomed to you doing the monthly responsibilities of home ownership, paying the utilities, etc. and is happy for you to continue. If you were to pass away, I believe he’d figure it out.

It doesn’t sound like your estate is that large, house with a mortgage is your largest asset. Not sure that you would be able to find a CPA or Trustee whose fees wouldn’t eat up more of the balance of your IRA accounts for paying the monthly bills, hiring handymen, etc. when your spouse needs it.

It sounds like you’re looking for a personal assistant.

I was thinking the same thing about automatic payments. Some issues there:

There would need to be sufficient money left in those accounts, and NOT accessible by your spouse, to cover those payments.

There would need to be something in place to handle the need to change bank accounts - e.g. if the account is compromised in some way.

Several people have mentioned that a CPA might take over some of these roles. My mother wasn’t a CPA but was a tax accountant and built relationships with a number of her clients; one of them actually did name her to oversee his affairs in retirement (and ultimately she was the executor of his will). I don’t think her oversight extended to making sure his mortgage was paid, but she did help arrange for his nursing home accommodations when the time came. Not sure what would have happened had she suddenly been unable to fulfill it - there’s where you’d need some kind of backup trustee in place.

Obviously you’d need to have stipulations for paying the CPA’s fees built into the trust documentation - and really, your husband needs to be brought up-to-speed at least somewhat on financial matters to protect himself from being fleeced if the CPA turns out not to be as honest as he should be. Plus basics of life like making purchases etc.

I do like the idea of paying off your mortgage if at all possible. That way, the cash flow needed for your spouse is much lower - taxes / insurance / maintenance. He could still wind up w/o a place to live if those expenses are not met of course. Selling / moving into an apartment eliminates mortgage expenses but then there’s the rent…

Do you have any trustworthy relatives who could help out?

Mama Zappa, those kinds of things are precisely the kinds of extra attention that I am looking for, i.e. someone to deal with the automated setup if something goes off the rails (among other things).

No relatives available on either side to help in any consistent or practical way.

Other questions: we have been together going on 25 years, and to my knowledge his entire adult life has been spent living with other people who handled the practical matters. He’s not going to be able to “figure it out.” This may seriously mitigate anyone’s desire to help me come up with a solution; nevertheless, I love him and want to help him as much as I can. Not with a personal assistant, but with someone who is competent and trustworthy to handle some of the practical matters of my husband’s life post-me.

You might want to contact the local Bar association and ask if they have a list of lawyers who are fluent in your husband’s native language. You might also want to check into local service organizations for immigrants from his country to see if they can steer you in the right direction. If I’m recalling correctly that you’re in San Francisco, we have a community center and services available for natives of pretty much every country on the planet.

I’m serious. A lawyer and an accountant probably have their place here, but they’re not going to manage his prescriptions or change the furnace filter. How detailed a level of day-to-day help is going to be needed; can he buy groceries, do laundry, and take out the trash, for instance?

You might start vetting for a trustworthy person to help in this capacity while you are still around. Care.com offers senior assistance (not just children’s nannies), and they run background checks, etc. After you’re gone, an accountant could pay the assistant and oversee his spending.

Not to be brutal, but having such a person to handle these matters could also buffer him from potentially predatory new putative boyfriends who might be tempted to offer him some level of care in hopes of gaining access to his finances.

Further thanks for all your thoughts. Notes: He drives, he buys groceries, can probably handle his prescriptions; he does virtually all the cleaning, and his own laundry. I could leave him with a list of people to call (plumber, electrician, handyman) if he has a problem on that level. He is not a moron, just disinclined to deal with certain categories of things in the world.

Tom, your observation about a new boyfriend is to the point, but I can’t worry about that. I don’t want him to fall prey to professional malfeasance (lawyer or cpa looting his money) but I do want him to have full access to the money even if it means he does something foolish with it.

So, I will now probably start looking for a bi-lingual money manager, and if I find one, they will probably have a lawyer they often work with. Maybe, working with a money person in his own language will enable him to get more involved.

Thanks again, everyone. Further thoughts or advice is still very welcome.