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Richard, Attorney
Category: Estate Law
Satisfied Customers: 53715
Experience:  29 years of experience practicing law, including tax and estate planning.
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I have IRA, LiveInsurance and a small house, all under $1M

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I have IRA, LiveInsurance and a small house, all under $1M in value.
In case I pass away while my child is still under the custody of other parent, I need a way to pass my inheritance to him without interference of other parent. What are advantages/disadvantages of testamentary trust in the will versus irrevocable trust? I would like to avoid probate and its costs too. State of Indiana.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good evening. The problem with a testamentary trust is that your estate must go through probate with respect to probate assets. This would include your house, but would not include your IRA or life insurance which have designated beneficiaries and pass outside probate. If you do a living revocable trust and transfer your house and any other assets that don't have survivorship clauses or designated beneficiaries, then you avoid probate and its costs altogether. The trust is revocable until your death and you can make any changes you want; then, upon your death, it becomes irrevocable and your assets are governed by the trust agreement outside probate.

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Customer: replied 3 years ago.

Thank you. In fact I do not have a house yet but have been in the process of buying one, therefore saying I have it. Good I have not bought it yet. For the house only purposes, what would be a best way to avoid probate - I have no other valuable assets? Can I include child as a co-owner or buy it as for the trust or use some other inexpensive financial mechanism?

You're welcome and thanks so much for following up. You can do this one of two ways...1) you can set up your revocable trust and buy it in the trust name; or 2) buy it in your name and your child's name as joint tenants with right of survivorship. In that event, when you die, title automatically vests in your child as survivor outside of probate. :)
Customer: replied 3 years ago.

> title automatically vests in your child as survivor outside of probate. :)


Will his other parent be able to sell/loot it it for her own benefits until he is 18? Or I can designate my own guardians.trustees for the purpose of the house?

They have a fiduciary duty to your son. But, to avoid this, put his interest in a trust with a trustee in which you have confidence. In that event, when you die, the title will vest in that trust.
If that's the situation, you are better off just setting up the revocable living trust, buying the property in the trust, and then when you die, the trust owns it pursuant to the terms of the trust and the successor trustee named in the trust by you takes control and protects your son.

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