Full question:
My wife and I, each married before, would like to combine our estates in a trust for our respective children with 2/3 going to my children and 1/3 to hers. If we do this, can we deed our home and two rental properties to our children, retaining life use, to avoid inheritance taxes or including them in resources to be considered if the cost of end of life care exceeds our cash assets? As it stands, currently, upon either of our deaths, my two pensions will continue to the surviving spouse but reduced to 75%. My health care benefits would continue unabated. We assume a trust could be established where a neutral party such as a bank would be the trust manager at the time of the first person's death to preserve the estate for the children but one of each of our respective children could be named as the family co-trustees to distribute the estate after the death of the second spouse. Is this correct?
- Category: Trusts
- Date:
- State: Wisconsin
Answer:
No, you cannot deed the property to the children and also put the property in trust. When property is placed in trust, it is deeded to the trust. Creating a life estate is sometimes used as an estate planning tool to avoid probate and inheritance taxes. It is possible to name a corporate trustee and name a child as a successor trustee, but typically the trust will terminate on the death of the second spouse and the assets will be distributed. We suggest you consult a local attorney who specializes in estate planning and can review all the facts, documents, and tax consequences involved. For further discussion, please see:
http://www.smartmoney.com/retirement/estate-planning/marriage-later-in-life-tricky-for-estate-planning-21281/
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
