I've heard that putting your estate into a trust can no longer be used as a way to avoid having to go through probate court? True? If so, what are your recommendations on how best to avoid probate?

Assumptions are: married with everything going to spouse, homeowner, multiple vehicles, retirement accounts, brokerage account with a large brokerage, and savings accounts.

Relevance: My dad passed in 2019 and despite having the majority of his estate in a trust, everything still had to go through probate which took nearly a full year to clear.

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Perfect question! Trust planning can certainly help us minimize probate as much as possible, but never all of it. In Connecticut, regardless of whether or not you even have a taxable estate, you always have to file an Estate Tax Return with the probate court. Revocable trust planning can’t remove that tax requirement.

What trust planning can do is help us avoid a full probate process. To do that, we would want to have certain assets owned by your living trust (like real estate) and other assets have proper beneficiary designations (like IRAs) so that nothing is in your name alone when you die. If you have nothing in your name alone at death, there are no assets to probate and thus only the estate tax return needs to be sorted. If you have a little more than nothing, but less than $40,000 in your name alone at death, you can even get away with an abbreviated probate process instead of a full probate (which can be handy for those pesky cars everyone forgets about).

If probate avoidance is a goal, you need to make sure all the assets are touched so they don’t need to be probated. If you own real estate in Connecticut, it means you’ll want to consider trust planning to have the property avoid the probate process. Best to have an attorney review ALL your assets to make sure everything is working together to meet all of your estate planning goals.

My parents are 70 but in reasonably good health. They’ve never done any estate planning. Is it worth it for them to make a trust, or should they assume that at their age a Medicaid look back is inevitable and would just invalidate it?

Thank you. This clarifies what my mom went through. Fortunately, seeing her go through that has prepared us somewhat. All accounts and/or property are jointly owned to mitigate our current exposure. We may have more accounts than normal because of some things my mom went through though.

For example, credit card where dad was the primary and mom was the joint was cancelled on his passing. Mom was allowed to apply and get credit for account history so account age remained the same but her credit limit was cut in half despite her income being relatively unchanged (larger estate, comfortably living off of interest). You can have joint accounts, just make sure that each partner has accounts where their name is the primary to prevent unnecessary disruption.

Thanks again for the trust info though. We have a meeting scheduled with my mom's attorney later this year (after tax time) to get things set up and this will help me understand what he's likely to propose.

Your parents certainly should have an estate plan (at least wills, POAs, and healthcare documents) and their planning may or may not involve a trust depending on what they’re trying to accomplish. Many folks use revocable trusts to help avoid the probate process, but in the context of Medicaid planning it works a little differently.

The idea with Medicaid preplanning is to not have any assets available to spend on your nursing home stay. If you have no money, the state’s Medicaid program (Husky C) will pay your nursing home bill for you. When you apply, the state will look back 5 years to see what type of transfers you made, and if you made an uncompensated transfer or gift within 5 years you’re penalized for the value of that gift.

Long term care insurance is an option, but the premiums are very high. I, as an attorney, would be looking at getting assets out of your parents’ names now while they’re healthy so that hopefully at least 5 years goes by before they need to go into a nursing home.

“But Ed, I don’t want to give everything away!” I agree! That’s why we’d create a Medicaid Trust to hold your assets. It’s an IRREVOCABLE trust, but you still set the rules of the trust. You can be the trustee (the person who manages and distributes assets), be able to live in and use real estate for your life, and even change the beneficiaries of the trust…but not to yourself. That cash and future real estate belonging to the trust is being managed for the beneficiaries, like your children, and not yourself, so any distributions you make must first go to the children. They of course are free to do whatever they want with it, but the state can’t make them use it on your care as long as the 5 years has gone by.

As a result, you get to keep assets in the family, still manage those assets, live in and use your real estate, and still control who ultimately gets everything while also starting the 5 year process!

Your parents should at least have a consultation with an estate planning attorney to see what’s right for them. Some of what I described here may be what they’re looking for, or it might be completely inappropriate for them. Everyone needs something, but it’s impossible to tell without having a heart-to-heart with that much admired and trusted family advisor: the estate planning attorney.

Thanks. They do have long term care insurance (a very old plan- I’ve heard the newer ones are mostly useless.) I’m hoping to get them in with an attorney soon, as my years of nagging them to do so has finally worn them down and I am slowly taking over their healthcare needs so POA etc. shouldn’t be an issue.

My main goal is to help them age in place as long as they’re able (their preference) so even if one passes long before the other they’d be able to be supported in their home.

Love that plan! People can be very hesitant to talk about their death and incapacity, especially once they’re older and set in their ways. It’s good if you to bring it up, and double good of you to be available to care for them! Keeping them in home and independent should always be goal #1.

Can you give me the name of a good estate planning and trust attorney?

My wife and I are about to have our first child. We’re both in our 20’s, and don’t own a home yet. Are we better off having a trust or a will?

🤔 hmmm if only I knew a good one. I can say Ed Lowe, of Ed Lowe Law, is a Connecticut estate planning and trust attorney. Whether he’s “good” or not…

Congratulations to you and your wife, friend! It all depends on your estate planning goals, but if you’re concerned about avoiding the probate process you can probably skip the trust until you have real estate, because you can always use beneficiary designations for most assets. Wills, POAs, and healthcare documents may be all you need.

HOWEVER, if you do end up creating a will, there will be something called a “testamentary” trust built within it to protect and manage assets for your bambino should you and your wife die before they reach a certain age. This type of trust is under the probate court’s jurisdiction, which many people like or don’t like depending on how they feel about a lot of different things. Often, people will opt to create a revocable living trust with the primary goal of allowing a minor beneficiary’s inheritance to be managed privately, rather than through the court.

If you meet with an estate planning attorney for a consultation, they should be able to get to the heart of what’s most appropriate for you, your wife, and the little one. As the family grows, so should the estate plan. Congratulations again!

Thank you! We will definitely sit down with an attorney at some point. Where is your office located?

Breezy, beautiful, Old Saybrook.

We’re in Enfield, but do have some family in that area.

To manage expectations I always tell my clients I’m Connecticut’s OKest Attorney. I’m all but retired now so feel free to use. :).

We're all up on our wills, etc. It was actually a fun experience, our lawyer made it a smooth experience, and it was a good feeling to get it taken care of.
I just want to say if anyone is hesitating, don't. Get it done.

My dad is 94, put everything in a trust about 12 years ago. I'm so glad he did. Five daughters, all of us would have to sign off on his selling his house, and three of us won't. Two sisters want him to sell and move him to the middle of Buttfuck, Nowhere, PA. Nearest hospital ~ 4 hours away. One of them almost had the house 'sold' to a neighbor's brother in law until I heard about it, and informed them that the house was in a trust and wouldn't be sold any time soon. They thanked me. People, take care of your paperwork. It's important to the ones you love.

Bank accounts are best to have beneficiaries. You can use those accounts as soon as you have a death certificate to manage the legal fees and estate management while the rest of the stuff goes through probate (a year or 2).

I did this with a messy estate and couldn't have paid for legal fees, probate fees (few grand) and working on a house to sell without being made a beneficiary.

If they have vehicles or investments, make sure all of their registrations, titles, and investment certificates are safe and easily accessible. Vehicles are useless without a title and I spent a year tracking one down because the original wasn't found. DMV has no right to provide you one until the car is in your name, but you can't put it in your name without the title. Couldn't ask the owner, for obvious reasons.

If they have shares, you need the original certificates because it costs hundreds just to make new ones and you can't sell (or transfer) their stocks without them. This part alone added months to probate for me and its the last step.

Learned all this the hard way.

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No doubt about it, beneficiary designations are a very important part of an estate plan.

Dang that is quite a pickle, and one that I unfortunately have very limited experience in. What you should search for is an environmental law attorney to advise you on remediation and limit your potential liability with this property. I’m afraid I can’t think of any environmental law attorneys to refer you to.

Low income parent of adult disabled person who if they come into a little cash, whats the best way to put it in a trust or something so it could be available for the special needs person without the state grabbing it because parent and disabled kid have both been on state insurance and had to sign documents stating they would pay back if they came into money. And how much does the lawyer take. And what about inheritances, should it be mentioned to go directly to special trust so parents amount isnt taken before it can be transferred. Thanks . I know they need to go talk to someone but you said AMA. :)

Certainly any inheritance that someone would want to go to either of those people should instead go into a special needs trust for their benefit.

A special needs trust is an irrevocable trust designed to hold assets for a beneficiary, allowing them to benefit from their needs-based state program AND benefit from their inheritance WITHOUT the state being able to recover from the inheritance.

The person who needs to do that type of planning is the person who plans on leaving an inheritance behind for someone on a needs-based program like Medicaid. They would set the terms of the trust while they’re alive, but it would stay empty until they’ve passed, at which point the inheritance would go to the beneficiary’s special needs trust, rather than the beneficiary as an individual.

It’s difficult to say what an attorney would charge for this work. Depending on what is needed in the planning costs would likely start in the low thousands. A consultation with a trusts and estates attorney should allow the attorney to give them a fee quote, and it’ll likely be a flat fee instead of hourly.

Thank you. If the back up guardian set up a trust and the parent got an inheritance could the parent just say No, put it in the trust? Or could the inheritance go to the back up gaurdian to put it in there? Or does it gave to be the old sick person revisiting the lawyer to do this?

Gotta be made by the old sick person in this case, because it’s their assets that will ultimately go into the special needs trust. That’s how we maintain the protection of the assets, the one receiving the benefit has no say over the trust’s terms.

If the old sick person isn’t able to travel to work with an attorney, much can be done over the phone or email. If they signed a power of attorney, one of the powers given to their agent may have been the power to do this legal work for them as well. It’s worth asking the attorney about for sure.

Thank you so much!