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There’s an awful lot of an advantage to having a lifetime of asset protection, but is it worth it?

Should you keep the proceeds of an inherited house inside Mom’s trust? Does it provide asset protection from creditors, divorcing spouses, and disability/Medicaid spend downs? In this reaction and commentary on a Reddit question, Jeff reviews the question, options, and pros & cons of keeping money inside a revocable trust after a parent has passed on.

The brother is making suggestions to just open accounts in the name of the truth, but one for each of them. Let’s jump into this.

Selling the House

My brother and I are preparing to sell our mom’s house after she passed away. The house was in a trust, and my brother and I are 50/50 beneficiaries. Since we are selling it in our mom’s trust… and our mom did not have a bank account open in the name of her trust… we were told we need to open a bank account in the name of our mom’s trust in order to receive the funds. We have now done this.

From there, I figured that the money would then be distributed into our regular bank accounts. However, my brother is saying that instead, we should open 2 separate trust bank accounts in our names in order to protect/shield the money. He says that we do not need to actually have a trust lawyer create new trusts for us, we simply need to have our trust lawyer create a document stating that my brother and I are 50/50 beneficiairies of our moms trust… and the bank will then open up trust bank accounts in our names and the funds will be distributed into those 2 accounts, and as along as the money stays in those new trust bank accounts, the funds are then shielded against lawsuits/divorce, etc. as long as the funds stay in those accounts. Is this correct?

I guess my main questions are 1) Is it possible to open trust bank accounts in my brother and my names without actually having trusts created through a trust lawyer? And also, 2) is there any advantage to that at all?

There is an awful lot of advantage to having a lifetime of asset protection, but is it worth it?

If what were are talking about here, and this is a concept that a lot of people aren’t getting, you don’t have to have one document per trust. You can have a Revocable Living Trust stating how everything is run and if we have a “subtrust” that’s created, it’s a separate trust. You don’t need to run and do a separate document because the language is already in there. So that takes care of that first overall item.

Can We Do This

They need to check and make sure that the trust document that mom had allows for that, and then what are the terms for those ongoing trusts. It very well could have that additional protection.

Watch the entire video here to find a couple of the cons.

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