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what exactly is meant by forming a trust?

Topic closed. 6 replies. Last post 8 years ago by justxploring.

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GamerMom's avatar - tails

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Posted: June 11, 2008, 9:30 pm - IP Logged

what does it mean when winners "set up a trust" before claiming their winnings? a trust for what? is it done with an accountant or a lawyer?

    justxploring's avatar - villiarna
    Wandering Aimlessly
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    Posted: June 12, 2008, 12:11 am - IP Logged

    Good question.  Trust for what?  There are about 100 different types of trusts and most are for asset protection. The best contact would be an estate attorney who might also work with a financial planner.  AFAIK only an attorney can set up a Trust.  Since trusts are usually regulated by state law, the rules aren't always the same.  I was told by a very reliable source that if you don't have one, the state might decide what to do with your house, bank account and any other assets like your car, especially if there is a dispute.  Still, some people say that's baloney and a last will and testament is enough.  Maybe it's like oat bran.  One day you need to eat it regularly and another day it's not as great as they claimed.

    Sorry, I just realized this has nothing to do with the lottery.  Well, once I attended a wealth management seminar (for work) where financial planners claimed they could teach me how to help rich people invest wisely to protect assets while they are alive.  Most of them looked like used car salesmen. 

    I just copied this from a legal web site:

    . WHAT ARE THE BENEFITS OF A TRUST? 

    The proper use of the proper trust allows one to :  

    • Preserve and protect assets
    • Defer, or eliminate estate tax liability
    • Increase opportunities for accumulation of wealth and estate growth
    • Isolate assets from litigation and liens
    • Create a family estate plan that will work for generations
    • Privacy
    • Avoid lawsuit & judgment losses
    • Enjoy Privacy in business
    • Utilize Asset and income diversification
    • Provide for custody of children's funds
    • Protection for retirement savings
    • Avoid probate and estate taxes
    • Facilitate the transfer of the estate to the heirs
    • Protect assets in the event of bankruptcy
    • Protect assets in the event of a divorce
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      Posted: June 12, 2008, 12:41 am - IP Logged

      Though they're typically done by lawyers or estate planners anybody can set up a trust. All you have to do is file the paperwork, though you need to do it properly. The only way the state gets to decide what to do with your estate is if you're foolish enough to die without a will or a trust.  Either one, if it's properly executed, should accomplish your goal, but only a trust can avoid probate.

        justxploring's avatar - villiarna
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        Posted: June 12, 2008, 3:32 pm - IP Logged

        Though they're typically done by lawyers or estate planners anybody can set up a trust. All you have to do is file the paperwork, though you need to do it properly. The only way the state gets to decide what to do with your estate is if you're foolish enough to die without a will or a trust.  Either one, if it's properly executed, should accomplish your goal, but only a trust can avoid probate.

        "though you need to do it properly"

        Key words. The same reason I won't go to a Dermatologist for a colonoscopy.  That's why I paid a lawyer, although it wasn't cheap.  It was a whole package, however.  I have a last will & testament, a trust and a living will.  Now when I die, my relatives will have to bury me in a clown suit.  LOL   I was thinking of adding all of my losing lottery tickets and on my tombstone "If I only played quick picks."

          psykomo's avatar - animal shark.jpg

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          Posted: June 12, 2008, 5:52 pm - IP Logged

          "though you need to do it properly"

          Key words. The same reason I won't go to a Dermatologist for a colonoscopy.  That's why I paid a lawyer, although it wasn't cheap.  It was a whole package, however.  I have a last will & testament, a trust and a living will.  Now when I die, my relatives will have to bury me in a clown suit.  LOL   I was thinking of adding all of my losing lottery tickets and on my tombstone "If I only played quick picks."

          Thank's JXP:

          only "GOD" play's quick pick's !!!

          LOL

          PSYKOMO

            Coin Toss's avatar - shape barbed.jpg
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            Posted: June 12, 2008, 6:46 pm - IP Logged

            Justxploring

            A clown suit!

            How about a "Riddler" clown suit- remember the character on Batman with the question marks all over his clothes?

            You could have a clown suit with QP all over it!

            :)

            Here lies a lotto player

            who is a lotto player no more

            they chose number after number

            yet had they marked QP they would have made a score

            Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

            Lep

            There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

              justxploring's avatar - villiarna
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              Posted: June 12, 2008, 7:50 pm - IP Logged

              I just noticed GamerMom asked about setting up a trust before claiming a prize, so that might be if there are multiple winners.  In Florida only one person can claim a prize, although once someone here told me I'm wrong.  That one person or entity can be an individual or a group like an LLC or a Trust, but then the Trust or LLC is responsible for paying the taxes.  In any case, if there are multiple winners, I'm sure a good attorney and accountant would know how to handle the distribution of funds. If you don't handle matters before you go to Tallahassee, then any money you give to another person might be considered a gift by the IRS and additional taxes would be owed.  Another reason to create a legal & binding relationship like a Trust might be to avoid a lawsuit in the future.