Normally a trust is not the beneficiary of your assets, but is the actual legal owner of the assets while you are alive. You, as a trustee, are allowed to use those assets while you live even though you don’t legally own them. That’s the point of a trust, that there’s no change in ownership at the time of your death, so there’s no probate etc.
Note: I live in a top-notch independent living facility and there is no buy-in. It’s strictly month-to month. The parent organization operates another facility that does have a buy-in, but it’s $100,000. Just saying’. It’s a broad market, so a person should shop around.
Carry on.
Keep in mind that it’s a burden to manage the trust. If you appoint a friend or relative to manage it after you die, be sure they really are okay with doing all the work required for the expected lifetime of the trust. If not, there are lots of companies which will manage it for a fee.
Actually, we did both. Our trust now owns our house, our investment account, and it owns the lease on our safety deposit box. But we still own our checking and savings accounts; they will be transferred to the trust upon our deaths.
Thank you for that information. So if I have existing investment accounts, I assume there is a process to change the ownership to the trust?
Our investment account is with Fidelity. Their preference was for us to open a new account in the name of the trust, then we authorized them to move all assets from old account to new account.
So not quite the same process as you described, but the end result is the same.
Your investment firm might just change ownership without opening a new account.
It’s been over 20 years since I set up my trust, and I don’t remember if I opened new investment accounts in the trust’s name or just transferred ownership. I know there were some accounts, like my checking account, that just transferred ownership, and likewise assets like my house were transferred to the trust. You have to remember that all future accounts and assets that you acquire should be set up to be owned by the trust.
Also note that retirement accounts are special: a trust can’t own those. For retirement accounts, you retain direct ownership, and assign a beneficiary who gets the assets on your death. The beneficiary may be the trust, or another person, or a charity, etc.
If I recall correctly, our attorney handled the change of ownership of accounts we needed moved to the trust. The process is known as ‘funding the trust’, and apparently it’s a step a LOT of people forget to do. They end up with the framework of a great plan to distribute their assets, but if they don’t put the assets in the trust, it’s just a useless, empty shell.
State colleges are more like $10-20K per year not counting housing. Now, if it’s a case of champagne tastes on a beer budget, their parents and/or scholarships need to kick in. I just looked. At Rose-Hulman, a private engineering school my niece and her husband attended, 1st year tuition is $81K! However, I know Rose has a strong endowment for scholarships, plus that niece and her husband are in the “smart, hard-working, debt-free” group. I know she already has 529’s set up for her children, although I don’t know how much is in them. Here in TN, the state lottery funded scholarships are available to all students who maintain a 3.0 GPA and 21 ACT score. That’s $2500/semester. I don’t know if most states have a similar program. Taking 5% from a $1mm investment account would fund $50K per year. My greats range in age from 15 to 2. The 15 year old is already being scouted for hockey scholarships. Anyway, it’s all in the planning stages.
The plan is the niece lives on the farm to take care of the animals, then she can sell it and move on if she pleases.
Basically, the whole time I was saving for retirement, my first goal was to make sure my animals were provided for. I care about my family, but I’m responsible for my pets. Currently I have 1 horse left, which a neighbor has actually agreed to take, 6 dogs, 1 house cat, a couple hives of bees (they can swarm or abscond - I don’t expect my niece to take up beekeeping). If I knew of a rescue/retirement home I could buy my pets into, I would do that and have the farm sold and divided.
StG