Stephen Waltar from Legacy Estate Planning in Bellvue discusses trusts. He said he likes the phrase, “Don’t put your trust in money, put your money in trust.” There are many kinds of trusts. It’s like a tube of toothpaste. If you squeeze the toothpaste out, anyone can get it: their creditors, the state, and you can’t get that toothpaste back in the tube. Instead, put it in a container, a trust for the benefit of someone. The difference between a will and a trust is this: if you hire an architect and they draw up blueprints, does that build the home? A will is a blueprint, it doesn’t do anything until after your passing.
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*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.
This is a special presentation of answers for elders with legacy estate planning with Stephen Walt. Are Welcome to the program everyone. It’s Saturday and it’s answers for elders radio and I have Mr Stephen Walt, are here from money and law and Steven is from Legacy Estate Planning and Bellevue, and welcome Steve to the program. Glad to be here, Steve. I’m thrilled that you’re here because a lot of us have a lot of questions about trusts. Trust is kind of one of those things that you know, you hear these words and these terms go around, but you really don’t know what they do, what they are, the different types, and so I think we’re we’re going to talk about that a little bit today, are we? Yeah, I like the phrase don’t put your trust in money, put your money in trust. I like that. That’s really good. But the question is what kind, because there’s so many correct and obviously people think well, if I just have everything in a trust, it doesn’t matter. Well then there’s different types. There’s tons of different types. I like this. You know the master’s just happened recently and you know there’s different golf clubs for different shots. Right, right. So there’s different trust for different purposes. There’s revocable ones, meaning you can change him, you can amend them, you can you know the it’s just like you can change it will. You can change a lot of trust. There are also ir vocable ones. They are ones that you’re trying to protect assets or protect the government from getting at things. And then even within those there’s different realms. There’s many Gad ones, there’s veterans administration ones, there’s gifting trust, there’s so we as an estate planner, I have this tool of all these different kinds of trusts. Amazing. There’s trust for spouses, there’s trust for children, grandchildren, all sorts of things, and some go through court and some don’t. Yeah, and and I know, like for my dad, he had what was called a family trust and inside that he had two different types of trust. He had one that was became irrevocable upon his death, Uh Huh, and then he had a separate trust for his wife and then everything was passed on to the family after that. But his, from what I understand, his portion of the trust once he passed away became are evoca bow. Is that common yeah, that is common and actually I like that because it means he loved your mom. You wanted to provide for her. But rather than giving things out right, I like to analogize a trust to like a tube atoothpaste. HMM. You know, if you squeeze the toothpaste out, anyone could get it. Their creditors could get at the state could get it. You just and you can’t get that toothpaste back in the tube. Right. But why not put it in a container and a trust for the benefit of someone? Right? And if the one that created it has passed, asked on it means you’re going to get creditor protection. Right, you’re going to get a state tax protection, and Washington state has a different rule than the federal government. So sometimes it makes sense to give in trust for people you love. So I’ve had it for other friends. Say, well, I have a will, I don’t need a trust. What’s the difference in why would I need one or the other? Well, and course, until I meet with someone, I can’t know. And not everyone needs a will, not everyone needs a trust. Right, the differences. If you hire an architect and you’re going to build a home and they build a blueprint for you. Does that build the home? No, no, a will is a blueprint. It does not do anything until you die and and it often doesn’t control everything. So you know, you may have life insurance and Iras and bank accounts and all sorts, and the only ask that would go through a probate is things needing retitled, like a home. Got It. So sometimes that’s all a will will control as a home. And if you’re going to have the home go directly to someone, you don’t want credit or protection. You know now you can do transfer on death deed. So you may not even need a will, let alone a trust. But sometimes you want to actually route many assets to be controlled by a trust and you actually want to protect the next generation. Sure, and then all that happens is the beneficiary changes. Is that correct? For the bar the beneficiary could be the same of a will or trust. It’s just the administration is different. Oh okay, yeah, so in some ways it’s paying out pay me later. Trust tend to be more work and cost up front, but they also organize things. You clean up title. Husbands and wives can get title laway, it ought to be, and you don’t have to worry about which as it’s go through court, which assets don’t. You can just avoid all the assets from going through court and kind of have your entire portfolio handled in a trust. So rather than the life insurance in one right, beneficiary on the other, and then the will controls the home and that’s it. Right. Right. So if I don’t have a trust and I have a will and upon my death, then you’re talking about things will go into probate. So what happens in probate? Yeah, yeah, so probate’s just the legal process of proving someone died. We have to take a death certificate because one attorney tried to start a probate too soon, right, and that terrible. And you notify the creditors people that protecting creditors is part of the process of probate. So if there’s a final bill to be paid, right, you know, you got to resolve the final claims and once you’ve paid off the attorney, the personal wrap, the creditors, once you’ve gone through like a four month weight, then you actually can get things to the beneficiaries. And again, it may be at that point you’re squeezing it out of the tube. It goes out right, or it may go into a trust, but it’s just it’s a court process that has a bunch of pleadings and little time delays and weights and supposed to be kind of some checks and balances, but it’s not known for being really quick. I don’t think Washington’s a terrible state, but it’s just it’s a legal process to get someone appointed, they collect the assets of the state, they resolve the debts, they notify the airs and then eventually they move assets to the beneficiaries or they sell and give cash or whatever. You have no authority to sell a home after someone dies until you get someone appointed to handle the deceased estate. Right if it’s a probate process, and it may not be one of the airs. It may be, isn’t it? Sometimes an attorney that will handle things. Usually the attorney does the legal stuff, but usually the attorney’s not the person that would be able to sign the the PRD to sell the property. They just do the pleading saying you are now appointed, and then they go and they list the car or they got home or do things like that. Got It. So obviously there’s different types of trusts. We talked about the family trust a little bit about what my dad did, but that you talk about air revocable. In an air vote rever vocable trust, that means there’s no changes to the trust once it’s that person is past. Is that correct? That’s the normal way to view it and a lot of states you can actually sometimes change an eurovocable trust with the court order or notice or a whole process. But the purpose of an Euro vocable trust is to limit access to it, make sure there’s credit or protection, and sometimes by making a de revocable you’re going to make sure that this asset doesn’t come back in the taxable station or a creditor couldn’t come after you. You’re giving up some rights if you create an euro vocable trust. Got It, God, and thus you’re protecting it more for certain beneficiaries. And then there’s, I know, a revocable trust. Yeah, and a revocable trust is, you know, your trust or trust to your beneficiaries, your kind of all three people. So that’s why I say it’s like a giant power of attorney. Got It. And for me, my wife and I, we have a trust or revocable living trust, where the trust stores trustees and beneficiaries so we can amend it, change it we don’t tell the IRS, but we’ve got our home and we’ve got an out of state property all titled in the Trust. And then when one of US dies, part of our trust becomes irrevocable and part of the stay is revocable, because I figure there’s the above and below ground purse. Right, right, right, one of us is alive, so that’s amendable. We’re still trust or trustee beneficiary, but on the bypass or family trust. There’s lots of different names. I wanted to make sure that it’s protected from a state taxes. Sure, if my wife were to remarry, I don’t want the pool boy to get the assets, you know. Right. So I’ve got certain protections there and this gives us kind of a doubling effect, so we avoid estate taxes, right, right. Yeah, so there’s and then, you know, when my wife dies, then it goes to our children and that sort of thing and our charities and all of that. Right. So what comes it? What other kinds of crap trusts are there? There’s house trusts. Sometimes people want to take a house that’s really valuable and you put it in an irrevocable trust and you essentially shrink the value of the house because it’s going to be a long time before the ultimate beneficiaries get in it. So sometimes you take a trust, you put a home in it, you shrink the value and you say for the next ten years or twenty years you’re able to live there and then even after the term of the trust is done, you can keep living there. You just you don’t own it. The beneficiaries on it, but you can have the right to keep living there. And what it means is if you die after that term is done, you don’t own the home at all. So it’s a way to avoid or lesson estate taxes. Got It. Got It and then what else? Yeah, well, special needs trust is a very common one. If you’ve got a child, a grandchild, a nephew, someone that is had an accident it or they have some handicaps, that they’re faced with disabilities, they may be qualifying for certain governmental housing in our programs or insurance and if you give them a bunch of cash they would be disqualified. So a special needs trust is a way to say look, I a lot of my a lot of people come me and say I’ll just trust my other son or my why would you do that? You can draft a trust that says, look, I’m not going to replace whatever governmental benefits are available, but for things that aren’t covered, right, I do want to provide things right, and so it’s a way to make sure you’re giving extra protection for that beneficiary without cutting off what the state or other insurance or you know what governmental benefits might be there. Right. Right. So, in in all, and there are more we’re going to say so. If, if somebody goes to see you, a lot of the determining different types of trust are going to depend obviously on, number one, what your desires are and your unique circumstances, and you’re going to make that judgment based on yeah, I said earlier, don’t put your trust in money, put your money in trust. I just don’t know if that’s going to be a trust in a will for a grandchild, if it’s a living trust, if it’s a trust for a spouse. There are safe harbor trust if you want to make sure the state of Washington can’t put a lean on a property after one spouse dies, all sorts of things. So that’s again, I’d don’t know. I don’t have an agenda to put everyone in a trust. I have an agenda to figure out one of their goals, who they try to how to protect their assets. Yeah, and the best way possible. So, Steve, how do we get a hold of you? Two ways, I think the easiest pick up the phone and make a phone call. We’re in Bellvue. Four to five, four five five, sixty seven eighty eight. That’s four to five, four five five, sixty seven eighty eight. You could also go to our website, which is waltarcom, W A L Taarcom, and you could, you know, sign up for free console or download a questionnaire or something like that. That’d be great. And then, you know, people can come to you and, you know, just have a free consultation understand a little bit about more of the process. And I know you’re really easy to get too because you’re right in Hidden Valley Office Park and there’s free parking. It’s very simple to get to your office. Would love to meet the teeth. Thank you for explaining all this really complex, compleat, I can say, complexity as we go through this navigating senior care. We appreciate your support. You’re welcome. This has been a special presentation of answers for elders with the legacy estate planning with Steven Walt are. For more information for legacy estate planning, go to waltarcom. That’s Wa l TA ARCOM
Suzanne Newman, host of the Answers for Elders radio show and podcast, proclaims often, “Caring for my mom was the hardest thing I ever have done, but it was also my greatest privilege.” Following a career of over 25 years in sales, media, and marketing management, Suzanne embarked on a 6-year-journey caring for her mother. Her trials and tribulations as a family caregiver inspired an impassioned life mission outside of the corporate world to revolutionize the journey that so many other American families also find themselves on. Answers for Elders provides education, help, and support to families, caregivers, and seniors across the country who are experiencing their own unique journey within the complicated world of Eldercare. Each week, Suzanne is joined by vetted professional experts in over 65 categories including health & wellness, life changes, living options, money, law, and more. Suzanne lives in Edmonds, Washington with her husband, Keith, and their two doodle dogs, Whidbey and Skagit.