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I have just met with a lawyer to set up a revocable trust in

NC and my lawyer sent...
I have just met with a lawyer to set up a revocable trust in NC and my lawyer sent me a letter detailing the agreement and asking for half the fee now and half at signing. My estate is approximately 1.5 million and it is all in cash or brokerage with exception of a condo. When I received the letter it now says I noticed you need further legal work that is typically already done so I will send you an estimate of that. She states the reason for setting up the trust vs a will which I had is to avoid the cost and time of probate and to allow immediate access to my two beneficiaries. I'm now not certain about whether all of this is necessary. The fee is $2,000. Plus whatever this new legal work is that she didn't think about at the first meeting this week. She specializes in elder care law and estates.
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Answered in 16 minutes by:
7/6/2013
LegalGems
LegalGems, Attorney
Category: Estate Law
Satisfied Customers: 10,851
Experience: Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
Verified

LegalGems :

Hi; My goal is to provide you with great service - if you have any questions during our chat, please ask! I'll do my best to ensure your satisfaction!

LegalGems :

A $2,000 fee for a revocable trust is not considered exorbitant by any means; often times, a trust that is being set up for a larger estate can cost several thousand dollars. The additional work she may be referring to is transferring the property into the name of the trust - if you have more property than she anticipated, this could result in additional fees.

LegalGems :

Many people do prefer trusts over wills - as this keeps their information private (a will that requires probate becomes part of public record). Also, any property that passes via the terms of the trust does not need probated, thus saving money in the long run.

LegalGems :

Probate fees in NC are around 40 cents per $100 of property, with a maximum probate fee of $6,000. This is in addition to filing fees and attorney fees. So generally a trust is considerably less expensive than utilizing the probate process.

Customer: I am asking on behalf of a family member with me now and he's in his 80's and very sharp. Why would new legal issues requiring additional fees be forgotten in the first appointment ? There are no complicated properties just the condo and all was discussed at first appointment. Excuse errors as I'm on iPhone. Can you thi k of any other issues she might be referring to? It's a "trust" issue no pun intended. Thanks
LegalGems :

No, then if there are no complicated issues, and everything was discussed I cannot think of a reason as to why the rate would increase - unless maybe her fees went up but generally an attorney will honor a price quoted.

Customer: So see below: I was researching revocable trusts and trusts for dummies came up and I guess my next question is this article makes you doubt why you would set up a trust other than your response about privacy.TrustsRevocable versus Irrevocable TrustsBy N. Brian Caverly, Esq. and Jordan S. SimonEstate planning often involves setting up revocable or irrevocable trusts. Each one of those trusts begins with an intervivos trust — a trust you set up that goes into effect while you're still alive. You then decide if the intervivos trust is revocable, meaning that you can change your mind, or irrevocable, meaning sorry, what's done is done.Irrevocable trusts are the easier of the two to understand. After you place property into an irrevocable trust, you can't retrieve the property. For all intents and purposes, that property now belongs to the trust, not to you!With a revocable trust, however, you can place property into the trust and at some point in the future, undo the transfer by removing the property and terminating the trust.Very often, if you die or become incompetent, the provisions of a revocable trust call for the trust to become an irrevocable trust. For example, you can terminate a revocable burial trust at any time, usually before death or incompetency. But if the burial trust still exists when you die or become incompetent, the trust becomes irrevocable and the money is used for your burial expenses.You most likely have gift tax consequences when you establish an intervivos irrevocable trust, so make sure your accountant is "in the loop," along with your attorney. Also, certain transfers within certain time periods prior to your death can be included in your estate as "gifts in contemplation of death" under both state and federal statutes. So watch out for possible death tax implications!How revocable and irrevocable trusts affect estate taxesThe most significant distinctions between revocable and irrevocable trusts are the estate tax considerations. Property that you place in an irrevocable trust is no longer considered part of your estate, meaning that the property typically isn't included in your estate's value when it comes to determining if you owe death taxes and, if so, how much.However, you still own property that you place into a revocable trust, and therefore that property is still subject to death taxes. If you can change your mind about the trust and retrieve the property from the trust at any time while you're still alive, the property is really yours and should be considered part of your estate.So if you only get a break on estate taxes with an irrevocable trust, why would anyone want to use a revocable trust without the estate tax break? Estate tax savings is only one of the reasons you may consider including a trust in your estate planning. If your estate's value is nowhere near the federal estate tax exemption, then you really don't need to be concerned about federal estate-tax-saving tactics.Your motivation for setting up a trust may have more to do with estate protection or helping out a charity, but you also may want a safety valve that allows you to pull money out of a trust if circumstances change in some way.Make sure to work with your accountant to understand any and all tax implications — gift, federal estate, and state inheritance or estate — for property transfers to both irrevocable and revocable trusts. He or she can help you set up the right provisions and avoid unpleasant tax-related surprises from the government because of some provision of the tax code you didn't know about.A closer look at revocable trustsEstate-planning advisers often point to revocable trusts, especially living trusts, as the "perfect way to totally avoid probate." Put all your property into revocable trusts and you can have control over that property, the pitch goes, and because none of your property is now in your probate estate (that's, it's all held in trust) your estate doesn't have to go through the probate process because your probate estate is "empty!" The pitch continues: By avoiding probate, you avert probate costs, put off the lack of privacy, and bypass other disadvantages of the probate process.Not so fast! True, you can avoid probate costs, but do you really think setting up and maintaining trusts is free? No way! Your costs to establish a revocable trust will vary, depending on attorney fees and other costs, and be prepared to pay to have your trust managed.You also need to make sure that everything you own is held in trust form. If you fail to include any part of your estate in your trust(s), then you have a probate estate that's subject to the probate process. So every time you buy a new home, open a new brokerage account, or make any changes to your estate's inventory, you need to make sure that you transfer that property into your trust(s).Remember that probate isn't always bad. The probate court ensures that the property in your probate estate is disposed of properly with no secret maneuverings and supervises your probate estate. With the probate court's supervision, part or all of your estate that's held in trust or other nonprobate form (joint tenancy with right of survivorship, for example) can be in for problems if someone close to you in a position of authority is unethical. All the beneficiary problems may get eventually get resolved, but quite possibly because of prolonged, costly legal battles.Buy the BookEstate Planning For DummiesMore From Dummies.comWhat Are Irrevocable Trusts?Benefits of Setting Up a TrustWhat Is the Federal Estate Tax?From Around the Web10 Foods to Help Melt Away that Muffin Top! (ActiveBeat)7 Things You Didn't Know about Kissing (All Women Stalk)Recommended by Newsletter Privacy Policy Terms & Conditions Full SiteCopyright © 2013
LegalGems :

Irrevocable trusts are generally used to protect assets from government subsidy programs (i.e. MedicAid) and creditors. Revocable trusts are generally used for both privacy, and also to save on probate fees. Also, probate typically takes 6-8 months, whereas a trust can be distributed pretty much immediately upon the decedent's passing.

LegalGems :

Did you have any questions on the above?

Customer: One more question : once the trust is completed, can it then simply be executed by the beneficiary ? Does it require someone a lawyer to administer it?
LegalGems :

No, it does not require an attorney. The trustee would be responsible for distributing the assets in accordance with the trust. However, often times the trustee will hire an attorney to oversee the process- simply because the trustee is liable for any mistakes they make in the distribution. (generally, the trust will state that the trustee may hire an attorney at the trust's expense).

LegalGems :

Alot of the cash i.e. bank accounts, can be handled with a Pay on Death designation - so it passes to the listed beneficiary as a matter of law upon passing.

LegalGems :

A thought - you may want to check www.avvo.com to see what other clients have posted regarding your attorney. Also, you can check with the bar association to make sure she is in good standing (no disciplinary action).

Customer: Ok that's great thank you.
Customer: how can at death a real estate like a condo just be available to someone else ie beneficiary?
LegalGems :

That would be accomplished by holding the title as joint tenants with right of survivorship. Then the property passes automatically to the joint tenant upon death.

Customer: so if one beneficiary is the executor then the second beneficiary waits for the first yo for example distribute the second's "share"?
LegalGems :

Yes. The executor would be responsible for distributing the assets according to the will/trust. The executor does have a fiduciary duty to all beneficiaries, so they are required to act in the beneficiaries' best interests.

LegalGems :

You mentioned your family member is a senior - please see this guide. It should come in handy: http://www.ncbar.org/media/299787/seniorcitizenshandbookenglish.pdf

Customer: There is no deed per se for the condo, but was closed by lawyers. Paid for in full. What does the lawyer need to do joint tenancy and shouldn't that have been discussed in the trust meeting?
LegalGems :

That is part of estate planning, so typically it would be discussed. Even if there is no mortgage, there still needs to be a deed on file at the county office - all property requires a deed. Generally, when meeting with an estate planning attorney, they will explain all probate avoidance techniques. Joint tenancy can be created by a grant deed - an attorney, or even a title company, can assist with this.

LegalGems
LegalGems, Attorney
Category: Estate Law
Satisfied Customers: 10,851
Experience: Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
Verified
LegalGems and 87 other Estate Law Specialists are ready to help you
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I wanted to be sure and thank you for using JA/Pearl.

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If you would like to request me for your future legal inquires, please put TO LEGAL GEMS in front of the question, and I will do my best!
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LegalGems
LegalGems
LegalGems, Attorney
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