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Mom' s wish was to remain in her own home until she died. She placed the home in a trust many years ago for this purpose. Now, she has moved in with my sibling and wishes to sell the house and divide up the money. What are the financial issues in this scenario?

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Thank you all for your answers. They were all very useful. The trust is irrevocable. I am the trustee on the home and yes, papers were filed and my name appears on the dead as trustee. There is also a WILL which states that upon her death, the house should be sold and assets divided equally. Iv didn't think it was a good idea to sell at this time, but both my mother and sibling think we should. My thought was to rent and use the money from the rent to pay for upkeep.
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Crazytown, I missed something when I first read your post. You wrote that you're the Trustee - are you the Trustee now or are you a Successor Trustee?
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Just a thought....when you called the original did the trust atty ages ago, was it you calling to set this up or your mom? It could be that if it was you, the atty has to set up an paid for appointment with you as technically you are not his client. He looked into the file and there's nothing to show you have any authority, so you are a new client. If you make an appt & mom is competent & cognitive to go with you, he may not charge as he is meeting with mom who is his preexisting client. There's a lot of flexibility on fees in these sort of situations.

If the initial documents were done ages ago that too could be an issue as firm may still be there but that atty is long gone. Nobody has a relationship.
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Another issue is that it appears that your mom is figuring that she will spend the rest of her life at the sibling's home and will not need that money for her care. But she may well need that money for caregivers in home, or for AL or NH down the road. Having that money put aside will give her options later.
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Crazytown, you don't have to see the same attorney who drafted the trust; in fact, given the situation, I think I might seriously consider seeing another attorney who is more impartial and cooperative. I've gotten advice from our attorney by phone; it was years ago and I don't recall whether I was specifically charged for it, but I believe there were at least a few followup calls that weren't charged, even though it would have been legitimate to do so.

Others have raised the issues to consider, including whether the trust is revocable or not, whether your mother might need to file for Medicaid in the future, whether or not if the house actually WAS funded into the trust it could be sold and the proceeds invested for potential future care for your mother, rather than being distributed now.

Do you know for sure that the house was funded into the trust? If it was, a Quit Claim Deed would have been executed from the title holders at the time to the Trust itself. If there was no such Deed, the house was never funded into the Trust.

I raise the issue of funding because I've learned that many folks think once the Trust is signed, everything is covered by it. That's not the case; assets, bonds, checking accounts, property, etc. have to be transferred legally into the trust.
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You really have to review the existing trust documents to see just what type you have. A trust is its own legal entity & defined as however it was set up.

If when you read it, you don't clearly understand just wtf it is, & how it interrelates to your states laws, then you need to see an atty. The one that did it originally is going to be the least expensive to do this. It is not going to be that much money.

Also just how is the trust being funded & is the funding secure? Trusts have costs, houses don't exist on air. Planned defunding to a trust to cause dissolution can be a way to end income trusts but you can't do it with property trusts. You need an atty no matter how you look at this.
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""The very best way to find out what can be done is as others have said, to contact the lawyer who set up the trust. Yes you will have to pay him for his time...they don't work for free and shouldn't have to work for free."""

IMCO having a GOOD elder affairs lawyer is something we all should have. We are lucky our's has a background in caregiver issues and estate planning not just "law"
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I think one financial issue that selling the house and diving up the money would raise is Medicaid. If she needs it, they will want to know where all of that money went. Another issue is one of gifting tax. I would assume that the house would sell for an amount high enough to create more than a gift of $14,000 per person. The amount above that would be subject to the gifting tax that may or may not be higher than the inheritance tax.

Meet with the lawyer, pay their fee for that don't work for free and get the advice you need.
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Is the trust set up to be revocable or irrevocable? This is the key point that will help to answer this question in general terms.

If the trust is revocable, this means that as long as the person who set up the trust is alive, it can be changed or even dissolved...therefore allowing your mother to make changes at any time. If the trust is irrevocable, then no changes can be made to the trust by anyone, and the terms stand as is. When someone sets up an irrevocable trust they in effect give up their ownership rights to whatever is in the trust. Irrevocable trusts are common because they can protect assets from many of the taxes that are incurred when someone dies.

There are also many many more types of trusts...such as a qualified personal residence trust or a generation skipping trust. Do you have the trust paperwork so you can look up what type it is? You can do a google search on the type of the trust and check the laws in your state that apply.

The very best way to find out what can be done is as others have said, to contact the lawyer who set up the trust. Yes you will have to pay him for his time...they don't work for free and shouldn't have to work for free..but the information you may get could save you a lot of headaches down the road.

Angel
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Her elder attorney refuses to answer any questions, wants us to make an appointment and charge us for the time. I am the trustee on the home and don't want to sell at this time. I'm also worried about the financial issues regarding a gift of the money,verses an inheritance.
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Call the Attorney who wrote up the trust.. If he's not available call another one...
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