Estate planning attorney Amy Halloran looks at readers' questions involving wills and trusts.
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Question: Our home is paid in full and in our living trust. Can one of our two children live in it forever or do they have to sell it within a certain time period (for tax reasons)?
Answer: I believe you are asking about the disposition of your home after both of your deaths. Typically, any estate tax liability will not arise until after the second death. At that time, if an estate tax is owed, it will be due nine months after the second spouse's death. Whether or not the house needs to be sold to satisfy that estate tax liability depends on the amount due and what other assets are available to satisfy the tax debt.
In 2010, there is no estate tax; in 2011, a married couple can have up to $2 million in assets without incurring an estate tax liability.
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Whether a child can live in the home depends upon the terms of your trust. If you'd like one child to live in the home as long as needed, I recommend amending your trust to state that specific wish. If your assets are left equally to both children, they would need to decide together whether the house should be sold or held for one to live in.
If you want to make changes to your estate plan, I recommend discussing it with an estate planning attorney to be sure the changes accurately reflect your wishes.
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Q: I read your recent advice that "after your death, your heirs will need to hire local counsel in the county where you resided." Is it always necessary to hire a lawyer after someone passes away? Is there a way to avoid that?
A: Whether you have a will, trust or no estate planning documents at all, some legal advice will be needed to properly administer your estate. Such legal involvement may be minimal or extensive, depending on the nature of your assets and the complexities of administering your estate.
It may not be necessary to involve a lawyer if you hold all of your assets in joint title with others. However, legal advice may be prudent to ensure that any necessary transfer documents are prepared properly.
You might check with your county probate court. Some offer low-cost clinics to assist those administering an estate without having to hire a lawyer.
