What's a trust?

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reid_IHB

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<p>Quiz Time:</p>

<p>You are looking up ownership info on the OC Tax Collector's website and find the owner of parcel 123-456-78 listed as 'Doe, Jane TR'. What can you determine about Ms. Doe?</p>

<p>A. She bequeathed the property in question to her child.</p>

<p>B. She inherited the property from her parent(s).</p>

<p>C. She inherited a big pile of cash and used some of it to buy the property.</p>

<p>D. She's entirely self-made but happens to be a bit more financially savvy than most and established a trust in her own name as a tax shelter.</p>

<p>E. Any of the above.</p>

<p>If I told you her house was purchased in a nice neighborhood during the height of the bubble when she was just getting started in her career, would that influence your answer?</p>
 
A trust is not an income tax shelter and if someone tries to use one as such, they will be very disappointed. A trust is used for asset protection from lawsuits and to avoid probate and some particular types of trusts are used to avoid estate taxes.<p>


Most folks use a trust to avoid probate and having a trust shows that one is informed.
 
<p>I'd vote for B... My house in owned by the "IPOPlaya Family Revocable Trust" and it is so for exactly the reasons awgee mentioned - asset protection, avoid probate, and also to better facilitate our estate management as it relates to our minor children in the event something happened to both my wife and I. IMO anyone with any kind of material net worth, especially if that worth is tied up in physical assets, should consider using a trust. </p>
 
A trust is a fiduciary relationship with respect to property in which one person, the trustee, holds title to the property for the benefit of another person, the beneficiary, which arises out of a manifestation of intent to create it for a legal purpose. Believe it or not, I did that from memory. Damn bar exam.
 
<p>Yep, everything mentioned is correct. Most of my apartments are tied up in a trust.... That way when I pass on (and my wife is still around) it will protect her from the creditors and other nefarious people who would like to separate her from her assets/money/ etc. </p>

<p>Believe it or not, ALOT of probate officers pilfer money, assets and other things from assets that go onto a state trust. Its quite disconserting that STATE EMPLOYEES can do this out too much repercussions. Protect yourself first!</p>

<p>-bix</p>
 
Thanks for the insights everyone. What I hear you saying is that it would be wrong to assume a property was inherited just because it's owned by a trust.
 
<p>Blue, well its a long story... but i'll try to condense it to a few sentences. </p>

<p>I first bought a house and used the equity to buy a second house. From there on I went to 3, then 4, then 5+ houses. Then sold them all and bought more houses in areas where I would see better appreciation. After a while I sold all the houses and had quite a built up sum ready to invest. For investment, the homes tended to be expensive houses and would be quite a gamble to get just the "right" buyer. So i went into apartments. First a duplex, then triplex, then quad, then 4 quads, etc. etc. etc. So far it has taken nearly 15 years of building. </p>

<p>Now for the downside... you will eventually have to SAVE some money to start somewhere and to use the money you've garnered to BUILD more equity, assets, wealth. No 50+k car, no several thousand dollars suits, no extravagent trips to a Las Vegas Brothel ( ha ha ha... just kidding). But you get the idea, spending money on one of California's "keeping up with the Jones'es" can get expensive REAL quick and in the end you are usually left with a depreciating asset. So you don't flash a better than everyone style... only you will know the truth though.</p>

<p>I'm sorry if this sounds preachy, but this attitude, IMHO, is key to actually building and retaining wealth. Any idiot can spend money, its keeping the money you made that is the real hard part. Good luck</p>

<p>-bix</p>
 
<p>bix</p>

<p>Way to go. </p>

<p>It takes time and self control to build wealth. </p>

<p>An understanding of the tax ramifications and good street smarts add a lot ot it. You have to have some risk taking ability because if you are looking for guarentees or perfection then investing in real estate isn't the right way to go.</p>

<p>Long term planning and then implementing the plan works.</p>

<p>If investing in real estate was easy we wouldn't have the big mess that we currently have. A lot of it was caused by the "get rich quick" folks jumping into an arena they know nothing about. Even though agents and lenders helped I still put most blame on the "greed" and easy money that buyers thought they would make.</p>

<p>Good luck and enjoy your success. It ain't easy!</p>

<p>By the way I am still debating an AK vs AR15. Any suggestions?</p>

<p>Regards</p>

<p> </p>

<p> </p>
 
<p><em> you will eventually have to SAVE some money to start somewhere and to use the money you've garnered to BUILD more equity, assets, wealth. No 50+k car....</em></p>

<p>Bix, you're the one with the Ford Focus, correct? </p>
 
<p>Effen, </p>

<p> Yep, I used to drive alot for work (30k+), so I'd buy new cars and burn them out in a few years. After a while The true cost of driving was so much as well as a hugely depreciating asset that cars are caught up to me. So from then on I went with cheapie little cars. I still modify them (just for fun) but the cost is so much more less. </p>

<p>I still like the AK, the 7.62x39 is IMHO much better than the .223 round. Plus the AK is simple to clean, simple to fix and just short of running over it, will work forever. Its just not a real accurate rifle or a very sexy looking piece of machinery. It is a very menacing looking. Anyway I collect the 7.62x54R rifles. None of that wimpy stuff for me! I say just get whatever you want and enjoy it!</p>

<p>-bix</p>
 
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