FUNDING THE REVOCABLE LIVING TRUST

Transcription

1 FUNDING THE REVOCABLE LIVING TRUST FIRST EDITION L. WILLIAM SCHMIDT, JR. Attorney at Law CONTINUING LEGAL EDUCATION IN COLORADO, INC. COLORADO BAR ASSOCIATION DENVER BAR ASSOCIATION 2005

2 TABLE OF CONTENTS Chapter 1 OVERVIEW OF THE REVOCABLE LIVING TRUST 1.1 GENERAL COMMENTS 1.2 ADVANTAGES OF THE REVOCABLE TRUST Management Uninterrupted By Incapacity Management For The Busy Executive Or Professional Segregation Of Assets Training The Trustee Privacy Of Disposition Of Assets At Death Reduction Of Probate Expense Avoidance Of Will Contest Uninterrupted Management At Death Avoidance Of Probate In Other States Tax Treatment Of The Revocable Trust Summary Chapter 2 REAL PROPERTY 2.1 QUITCLAIM DEED 2.2 WARRANTY DEED 2.3 SPECIAL WARRANTY DEED 2.4 BARGAIN AND SALE DEED 2.5 TITLE INSURANCE ISSUES 2.6 THE GRANTEE: TRUST DISCLOSED TRUSTEE UNDISCLOSED 2.7 THE GRANTEE: TRUSTEE DISCLOSED TRUST UNDISCLOSED 2.8 TRUSTEES IN JOINT TENANCY TRUST UNDISCLOSED 2.9 NONRESIDENT BANK TRUSTEE (6/05) TOC-1

3 Funding the Revocable Living Trust 2.10 UNRECORDED DEEDS Effectiveness Of The Conveyance Gift And Estate Tax Issues Mortgage Precautions 2.11 CREDITORS OF THE TRUSTEE 2.12 TAXABLE GAIN FROM SALE OF PERSONAL RESIDENCE 2.13 THE STATEMENT OF AUTHORITY 2.14 SENIOR S PROPERTY TAX EXEMPTION 2.15 BENEFICIARY DEED Beneficiary Deed Background Subcommittee s Approach Creditor Issues Tax Consequences EXHIBIT 2A EXHIBIT 2B QUITCLAIM DEED WARRANTY DEED EXHIBIT 2C COLORADO REAL ESTATE TITLE STANDARD 3.2 EXHIBIT 2D EXHIBIT 2E EXHIBIT 2F SAMPLE ATTORNEY S LETTER TO REAL ESTATE LENDER GARN-ST. GERMAIN DEPOSITORY INSTITUTIONS ACT OF 1982 REQUEST TO LENDER FOR PERMISSION TO TRANSFER TO TRUST EXHIBIT 2G PRIV. LTR. RUL EXHIBIT 2H STATEMENT OF AUTHORITY PROVISIONS OF C.R.S EXHIBIT 2I ANNOTATED COLORADO STATUTE ON BENEFICIARY DEEDS TOC-2 (6/05)

4 Table of Contents Chapter 3 STOCKS 3.1 REGISTERED SECURITIES 3.2 BEARER SECURITIES EXHIBIT 3A IRREVOCABLE STOCK OR BOND POWER FORM Chapter 4 SAFE DEPOSIT BOXES 4.1 OWNERSHIP 4.2 CAVEAT Chapter 5 LIFE INSURANCE 5.1 BENEFICIARY DESIGNATION 5.2 OWNERSHIP ISSUES EXHIBIT 5A SAMPLE DEPARTMENT OF VETERANS AFFAIRS DESIGNATION OF BENEFICIARY FORM Chapter 6 PENSION AND PROFIT-SHARING BENEFITS 6.1 SURVIVING SPOUSE ALTERNATIVES Income And Estate Tax Conflicts Spousal Disclaimer To Trust 6.2 TRUST AS DESIGNATED BENEFICIARY EXHIBIT 6A QUALIFIED PLAN/IRA BENEFICIARY DESIGNATION Chapter 7 PERSONAL EFFECTS 7.1 SPOUSAL ISSUES 7.2 FORMAL INTENTION TO TRANSFER PERSONALTY EXHIBIT 7A BILL OF SALE (6/05) TOC-3

5 Funding the Revocable Living Trust Chapter 8 SUBCHAPTER S STOCK 8.1 GRANTOR TRUSTS 8.2 QUALIFICATION AS A QSST 8.3 QUALIFICATION AS AN ESBT Chapter 9 I.R.C STOCK 9.1 OVERVIEW Chapter 10 INSTALLMENT OBLIGATIONS 10.1 OVERVIEW EXHIBIT 10A ASSIGNMENT OF PROMISSORY NOTE EXHIBIT 10B ASSIGNMENT OF NOTE AND DEED OF TRUST Chapter 11 LIVESTOCK AND FARM EQUIPMENT 11.1 OVERVIEW Chapter 12 STOCK OPTIONS 12.1 EXERCISE-OF-OPTION ISSUES Chapter 13 OIL AND GAS INTERESTS 13.1 OVERVIEW 13.2 FORM OF CONVEYANCE EXHIBIT 13A EXHIBIT 13B EXHIBIT 13C EXHIBIT 13D SAMPLE MINERAL DEED SAMPLE ROYALTY ASSIGNMENT SAMPLE ASSIGNMENT OF OVERRIDING ROYALTY INTEREST SAMPLE GAS DIVISION ORDER TOC-4 (6/05)

6 Table of Contents Chapter 14 SERIES E AND H BONDS 14.1 OVERVIEW EXHIBIT 14A EXHIBIT 14B REQUEST TO REISSUE UNITED STATES SAVINGS BONDS TO A PERSONAL TRUST TREASURY DIRECT TRANSACTION REQUEST Chapter 15 AUTOMOBILES 15.1 TITLING 15.2 INSURANCE ISSUES 15.3 INCAPACITY EXHIBIT 15A COLORADO POWER OF ATTORNEY FOR MOTOR VEHICLE ONLY Chapter 16 BUSINESS INTERESTS 16.1 PROFESSIONAL CORPORATION STOCK 16.2 PARTNERSHIPS 16.3 SOLE PROPRIETORSHIP 16.4 LIMITED LIABILITY COMPANY Chapter 17 PATENTS, TRADEMARKS, AND COPYRIGHTS 17.1 OVERVIEW EXHIBIT 17A EXHIBIT 17B ASSIGNMENT OF PATENT CHANGE OF OWNER (ASSIGNMENTS) & CHANGE OF OWNER NAME (6/05) TOC-5

7 Funding the Revocable Living Trust Chapter 18 SPECIAL POWER OF ATTORNEY FOR FUNDING 18.1 OVERVIEW EXHIBIT 18A DURABLE SPECIAL POWER OF ATTORNEY Chapter 19 POD AND TOD ACCOUNTS 19.1 POD ACCOUNTS 19.2 TOD ACCOUNTS EXHIBIT 19A SAMPLE STOCK CERTIFICATE Chapter 20 POST-MORTEM ASSIGNMENTS 20.1 OVERVIEW EXHIBIT 20A ASSIGNMENT TO BENEFICIARY Chapter 21 THE NOMINEE PARTNERSHIP 21.1 DEVELOPMENT OF NOMINEE PARTNERSHIPS 21.2 THE PARTNERSHIP AGREEMENT 21.3 DOCUMENTING OWNERSHIP OF ASSETS 21.4 TAX REPORTING 21.5 POST-DEATH CONSIDERATIONS Single Continuing Trust: Single Nominee Single Trust Divides At Death: Single Nominee Two Trusts: Single Nominee EXHIBIT 21A EXHIBIT 21B PARTNERSHIP AGREEMENT OF FAMILY PARTNERSHIP MANAGEMENT AGREEMENT TOC-6 (6/05)

8 Table of Contents EXHIBIT 21C EXHIBIT 21D EXHIBIT 21E EXHIBIT 21F OWNERSHIP INSTRUCTIONS TO NOMINEE OWNERSHIP INSTRUCTIONS TO NOMINEE (OTHER THAN EQUAL INTERESTS) SAMPLE OF NOMINEE INCOME TAX REPORTING AMENDMENT TO PARTNERSHIP AGREEMENT Chapter 22 BANK ACCOUNTS 22.1 CHECKING ACCOUNTS 22.2 FDIC DEPOSIT INSURANCE EXHIBIT 22A FDIC: NEW RULES FOR REVOCABLE LIVING TRUST ACCOUNTS Chapter 23 INCOME TAX MATTERS 23.1 REPORTING INCOME AND TAX RETURNS Settlor As Owner Trust As Owner 23.2 REPORTING AT GRANTOR S DEATH 23.3 TAXABLE YEAR EXHIBIT 23A EXHIBIT 23B EXHIBIT 23C T.D. 8633: GRANTOR TRUST REPORTING REQUIREMENTS SAMPLE INSTRUCTIONS TO CLIENT FOR REPORTING INCOME COMPLIANCE WITH TREASURY REGULATION (b) (6/05) TOC-7

9 Funding the Revocable Living Trust Chapter 24 MARITAL PROPERTY CONSIDERATIONS 24.1 DIVIDED ASSETS CONSEQUENCES UPON DIVORCE EXHIBIT 24A MARITAL PROPERTY AGREEMENT Chapter 25 DUTIES OF THE TRUSTEE 25.1 WHOM TO DESIGNATE 25.2 EDUCTION OF TRUSTEE EXHIBIT 25A WHAT IT MEANS TO BE A TRUSTEE TABLE OF AUTHORITIES SUBJECT INDEX TOC-8 (6/05)