Skip to main content
#
The Trentini Team
my account
site map
contact
cart
our twitterour facebook page
Evansville  Real Estate - Homes For Sale | Indiana Realtors - Agents
Search Evansville & Newburgh, Indiana Properties
Featured Listings
Evansville Real Estate - Homes for Sale | Indiana REALTOR®
Newburgh Real Estate - Homes for Sale | Indiana REALTOR®
Relocating to Southwest Indiana?
Buying and Selling Southwest Indiana Homes
About The Trentini Team - F.C. Tucker Emge REALTORS® - Southwest Indiana REALTOR®

Real Estate Blog
Latest Posts
Categories

 Real Estate Blog 
Monday, October 03 2011

You might think a pot trust would be a trust designed to hold your maui wowie and/or Bob Marley memorabilia. But in fact, this type of trust is designed to promote fairness in families with a big age gap between children.

In many cases, a husband and wife will divide their property equally between their children at the death of the second spouse to die. That can be fair, but what if one child is 25 years old (and has completed college) while the other child is 14 (and has yet to begin college)? Given the high cost of higher education, "equality" could be unfair in this situation. For instance, if we assume husband and wife had a combined estate of $400,000, then each child would receive $200,000. The younger child's inheritance may be consumed (largely or even entirely) by tuition and room and board, while the older child can use the $200,000 as he or she sees fit.

Enter the pot trust. Instead of dividing property equally at the death of the second spouse to die, the property is held in trust until the younger child reaches a certain age (for instance, 25) or graduates from college. Up until that time, money can come out of the pot trust for either child, but the main purpose of the pot trust -- expressed specifically in the trust document -- is for the payment of the younger child's education expenses.

Once the termination date is reached (say, younger child reaches 25), the pot trust terminates and the remaining property is then divided equally among the children. Let's say that the $400,000 combined estate referenced above drops to $240,000 while the pot trust is ongoing, because the younger child's college education cost $160,000. Upon the termination date, each child receives $120,000. A much fairer result, I think.

Source: Joel A. Schoenmeyer http://www.deathandtaxesblog.com/2011/09/what_is_a_pot_trust.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DeathAndTaxesBlogCom+%28Death+and+Taxes+Blog%29

Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  Email
Email
Twitter
Facebook
Digg
LinkedIn
Delicious
StumbleUpon
Add to favorites

The Trentini Team
F.C. Tucker EMGE REALTORS®
7820 Eagle Crest Bvd., Suite 200
Evansville, IN 47715
Office: (812) 479-0801
Cell: (812) 499-9234
Email: Rolando@RolandoTrentini.com


Accredited Buyer Representative

Equal Housing Opportunity

Multiple Listing Service?

REALTOR®

 

Pro Step Marketing

PRIVACY POLICY
The Trentini Team is the sole owner of the information collected on this site. Neither The Trentini Team nor the team associates will sell, share, or rent this confidential information to others. Your privacy is the primary issue for The Trentini Team. 

CONTACT POLICY
By submitting personal information such as name, address, phone number, email address and/or additional data, the real estate client/prospect consents that The Trentini Team or their authorized representative may contact client/prospect by phone, U.S. Postal System, or e-mail whether or not client/prospect is participating in a state, federal or other "do not contact" program of any type.
 
 
Copyright© 2007 The Trentini Team, REALTOR®, All Rights Reserved.