Dad was careless with putting things in Trust. What do I do about the car?
Dad had set up a trust in his home state of Ohio, putting his home in it, his car, his investments. He did a great job! Then he became too ill to live alone so went to live with my brother in Texas for a few years. He passed away a couple of weeks ago. He went peacefully bless his soul.
As Trustee of his trust I thought dispursing of his assets would also go peacefully, but it's not turning out to be the case in all instances. I've come to find out Dad made a couple of errors that are going to cost us. 1st, he opened a local bank account and didn't put it in the trust, or even assign a benificary. He then proceeded to load it with his manditory retirement distrubutions from his IRA. That makes it a pretty sizable bit of our inheritance that, now, has to be probated.
Now I've just discovered that while he was living in Texas he retitled his car (probably for insurance purposes) but he didn't title it in the name of the trust. I'm pretty sure this means that signing it over to my brother and sis in law (as he directed me to do just days before he passed away) is out of the question now. The car, too, will have to be probated I'm guessing.
My question... I was going to try to get into the bank account by using Muniment of Title (Texas fast track to probate) proceedings. Does anyone know if I'll also be able to put the car on this request? When it was just a bank account, I was going to try to file the application myself, but now I'm wondering if I wouldn't best be served by having a lawyer do it (1250.00 was quoted).
THERE'S A LESSON HERE FOR ALL OF US...make sure if you of your parents have a trust (and I think everyone with anything to leave should have a trust), to always assign any assets that have titles in the name of the trust and not in an individual's name! If tnot, you're only defeating the purpose of the trust...easy transfer of your assets at little time or cost of your heirs.
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It was after investigating probate that I convinced by folks to take steps to avoid it...and after my Dad passed, Mom repeated it all.
I am hoping that she lives a very very long time, but when that time comes...there will be no probate here either.
It has been a lesson learned for me to place everything into a trust that has value. I never did put my vehicle into the trust because it is 20 years old and the gasoline in the vehicle is worth more than the vehicle itself [but I love it].
I am paying my Dad's Elder Law Attorney' staff walking me through this maze with my late Dad, it isn't going to be cheap.
After her death, I tried to retitle vehicle insurance in the name of the Trust. Again, no dice. Carriers wouldn't insure a trust, only an individual. So I ended up transferring title and insurance coverage into the names of the co-Trustees.
As to who would get the car, check the Pour-Over Will, which should have been executed in conjunction with the Trust. I'm not sure whether the vehicle has to go through Probate, unless it's a high end luxury vehicle. Others more familiar with Texas Probate could address that issue better than I.
I do recall speaking with my attorney and being advised that b/c the Trust and Pour-Over Wills addressed disposition of ALL personal assets, the car was in fact a possession included in the Trust for disposition purposes.
Check the documents to see if there's a Bill of Sale from your father to the Trust; this would fund the personal assets into the Trust.
The bank account with IRA funds is a different story, especially since there was no co-owner on the account; however, b/c these are IRAs, I don't believe co-owners can be possible on that kind of account, unless he held the IRAs jointly with someone else. I'll leave that issue as well to the others with more knowledge of Texas probate.
I do want to raise an issue that existed with IRAs in trust, and that's the tax rate. It's been 13 years and I don't want to address the details as I don't remember them succinctly. But whatever the disposition, you'll need to find out whether the heirs inherit and are obligated for tax purposes for their specific ages. I.e., when we inherit my father's IRAs, we'll have to take Required Minimum Distributions at our individual ages; for me that would be the year of inheritance. For my younger sibling, he wouldn't have to begin taking distributions for a few years.
I mention this b/c it's not always thought of, and you wouldn't want to run afoul of the IRS in not taking the mandated distribution amounts.
I would also consult either an attorney or an accountant specializing in estates and trusts to determine the basis on which you inherit the IRAS, i.e., value on date of death, or some other value. I'm not clear on this, but it can be an issue.
My father's IRAs were initially funded into the Trust but I "in- funded" them after doing some research and learning more about the steep inheritance taxes that would apply. Now they'll pass directly to the heirs. This is a critical issue and deserves consultation with a trust attorney or trust accountant.
I know nothing about Muniments; I'll leave that to Igloo.
Freq - Sorry about your dad..I'm glad our situation is not going to be such a maze, since the most important stuff, such as the IRA and his house which is under a land contract sale, is in the trust.
Katie, I've learned more and am going to be trying to take the short route to gain access to the bank account. We'll be filing what is called a Muniment of Title in Texas. At first I thought we needed a lawyer (1250.00) but found out we can file the forms ourselves pretty easily as long as the bank is willing to accept the court's ruling. I've got a message into the banker now.
Garden Angel, there's no question of who the car goes to as my dad wanted my sister in law to have it. She's been his caregiver for the last 3 years, 24/7 and Dad specifically asked me to be sure she gets the car. Nice to know about his maybe not being able to title the car into the trust. So he could very well not been at fault for the car, only at trying to hide his gambling loses from us. It's simply going to take a bit, but it looks as if we can just fill out an Airship Affidavit to get the car into brother and sis in laws name.
Also if you DIY this try to pay for everything courthouse in cash, it will make things happen faster. Cash means it gets posted & filed that day or maybe the next day. Checks will take time to clear and probably add at least 10 day delay.