Just 2 Minutes - Interviews by Kamil Sarji

25-Estate Planning Secrets: Leveraging Trusts for Wealth and Legacy Control with Rebecca Dupras

• Kamil Sarji • Episode 25

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 Discover how estate planning can shape your legacy and provide control over your assets even after you're gone. Attorney Rebecca Dupras from Dupras Law shares insights on setting up trusts for property ownership, asset protection, and posthumous wealth management. Learn why trusts are more than just legal structures—they can become powerful tools for securing investments, minimizing taxes, and creating multi-generational wealth. Whether you’re looking to secure your family’s future, avoid probate, or simply understand the complex world of estate planning, this episode is packed with valuable knowledge for investors, homeowners, and aspiring trust fund managers. Rebecca breaks down the options, from revocable to irrevocable trusts, and reveals the strategies to safeguard assets, reduce tax burdens, and ensure smooth transitions for loved ones. Tune in to learn why a well-crafted trust could be the cornerstone of your financial legacy. 

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Kamil Sarji:

Welcome everybody, I'm Kamil Sarji, your host of Just Two Minutes. And today I have Rebecca. Rebecca, you want to tell us about you?

Rebecca Dupras:

Sure. My name is Rebecca Dupras. I'm an attorney. I have an office in North Providence. I focus primarily on working with folks around their estate planning. So drafting up wills and trusts. And then also after people pass away, I handle the probate matters or guardianship matters for people who are in need of those services.

Kamil Sarji:

Awesome. Yeah, that's perfect. Because today's topic is we're going to talk about trust. I'm sure the audience. They've heard the word trust and a lot of agents have heard trust and we've dealt with transactions. So yeah, I'm looking forward to talking about that. But first, you know what it's all about. It's just two minutes show. So I have my handy dandy.

Rebecca Dupras:

I have a question for you though.

Kamil Sarji:

Yeah. Oh, okay.

Rebecca Dupras:

Has anyone ever asked you questions during a two minute session?

Kamil Sarji:

No.

Rebecca Dupras:

Okay. I was just curious if the tables were ever turned.

Kamil Sarji:

Yeah. Well, actually one person asked me. Because I asked them tough questions, I think it was like in the beginning, and I said, you can't ask me questions, you can have your own show and ask questions. Um, it's my show, I get to, I get to dictate.

Rebecca Dupras:

That's a good response. I was just curious.

Kamil Sarji:

Yeah, people come in here, they think they're the boss, you know, it's my show, I get to.

Rebecca Dupras:

Right, exactly.

Kamil Sarji:

I don't want to be embarrassed, I'd rather embarrass other people.

Rebecca Dupras:

Fantastic.

Kamil Sarji:

Okay, so, so I'm not gonna embarrass you.

Rebecca Dupras:

That's fine.

Kamil Sarji:

Alright, so I got my timer.

Rebecca Dupras:

Okay.

Kamil Sarji:

And Alright, so, Tom and Jerry, like, these guys are always fighting, fighting. Um, well, what can we, what would you do, like, to get them to, to be friends again?

Rebecca Dupras:

Tom and Jerry?

Kamil Sarji:

Yeah.

Rebecca Dupras:

Um, I suppose I don't know, I guess you could broker a deal where maybe they could like cohabitate.

Kamil Sarji:

Hmm.

Rebecca Dupras:

Draw like a line you can't cross over, you know?

Kamil Sarji:

Yeah.

Rebecca Dupras:

Maybe create like a green zone.

Kamil Sarji:

Okay.

Rebecca Dupras:

Where they could be friends, but then there go back to their respective corners after. Kamil Sarji: Okay. I like that. Um, if you could instantly master a hobby or a sport, what would it be? Instantly master a hobby or a sport. You know what I've always wanted to learn how to do and like really well is play pool. I'm so bad at it.

Kamil Sarji:

Really?

Rebecca Dupras:

That I think it would be like fun because it's like, you know accessible You can do it with lots of your friends, but i'm just like so bad

Kamil Sarji:

Okay, that's cool. Well, that's easy. I can I can show you we can go play pool with a bunch of people and

Rebecca Dupras:

And I can show you how terrible

Kamil Sarji:

It's just practice um What's a weird food combo? Uh that you you know of that you like and tastes good like

Rebecca Dupras:

Maybe anchovy pizza. I think that's like a controversial thing, but I do like it.

Kamil Sarji:

Okay. If you could have dinner with one person on this planet right now, who would it be?

Rebecca Dupras:

Oh my gosh. Um, probably. Um, I'm, that's hard. So many things I want to ask people. Probably like Bernie Sanders. I'm pretty progressive in politics, and I think I'd like to just sit down and talk to him about his career.

Kamil Sarji:

Awesome. Okay, cool. So what do you think of that questions?

Rebecca Dupras:

They weren't terrible.

Kamil Sarji:

Yeah, it's good. Tom and Jerry, those two.

Rebecca Dupras:

I know that one was, that was a really interesting one.

Kamil Sarji:

So frustrating. I just want them to stop fighting and just be friends.

Rebecca Dupras:

I know.

Kamil Sarji:

You know? But then, it would probably be a boring show.

Rebecca Dupras:

Yeah, probably.

Kamil Sarji:

Them fishing together, like, eh, there's nothing.

Rebecca Dupras:

No one would watch that. It's like reality TV, you know? Nothing awesome. It needs to be controversial.

Kamil Sarji:

Yeah, you need drama. Oh my gosh. Alright, cool. So, Rebecca, tell me, Liz, like, so many cool things that you're involved in with people who are creating trust. You've seen so many different angles with trust. First things first, like, when there's a trust, who owns that trust? What is a trust?

Rebecca Dupras:

Sure. So, a trust is generally part of a larger estate plan, which is made up of a will and sometimes powers of attorney. Um, There's lots of different kinds of trusts, so you can have them set up to be revocable or not called irrevocable trusts. You can have them set up for yourself or for other people. I mean, sometimes it depends on what kind of assets you have and how much money and control you want over those assets, to determine which type of trust you want to set up. But I think something else I'm going to say that's kind of interesting, Probably somewhat controversial, is that not everybody needs a trust.

Kamil Sarji:

Okay.

Rebecca Dupras:

So I work with people and I try to determine what they actually need and not sell them on things that they don't need. And what I find to be true is that sometimes when people are earlier on in like their journey, you know, career or wealth planning, they may not be in a position where they have that would necessitate a trust, but it doesn't mean that they don't need some kind of plan. So they may still need a will because they have, like, minor children, or, you know, something like that, which could have a trust in it.

Kamil Sarji:

So why not just make a will? Why like a trust?

Rebecca Dupras:

So people make trusts for a variety of reasons sometimes people need or want to have some aspect of control over the assets After they pass away So if they have minor children or children that they don't trust to inherit, you know large sums of money all at once They may want to set up a trust and again, you can do it freestanding or as part of a your will. So there's different ways of doing it.

Kamil Sarji:

Okay.

Rebecca Dupras:

And then sometimes people set them up for tax planning purposes. So in Rhode Island and Massachusetts, that's where I practice, there's an estate tax still. So if you own over a threshold amount of money, when you pass away, you may potentially pay estate taxes. But if you're married, you can actually shelter some of the money at the initial person to pass away and kind of, you know, Use up both of the credits that you get, so it increases your ability to access the tax credits that way. So sometimes people do it for tax planning reasons. It also can protect assets from creditors for your beneficiaries. These are, I'm talking about revocable trust now. So, if you set up a revocable trust and you, let's say you set one up for your children and you pass away and your children are not the beneficiaries, they would potentially be able to access an asset protection, sort of a, you know, force field around the assets while the trust is holding them. So,

Kamil Sarji:

there's just It seems like it's so many different ways and I guess meeting with you and figuring out what type of, situation will work for them. That's, it seems like, like everybody's like, I want to trust.

Rebecca Dupras:

Yeah. A lot of people come in and they tell me that, you know, they spend a lot of time watching like YouTube videos and, and it's all fine. I mean, I think more information can be useful, but you have to understand how the information applies to you. Right, because just because somebody has something set up for their situation doesn't necessarily mean it's your situation. Sometimes I get people come in and they're like, well I want my kids to be that term trust fund babies. I get, I hear that all the time and I'm like that's, a trust isn't generating assets. You have to have assets to put into the trust. It's kind of like, imagine like setting up an LLC for your business, right? You file all the paperwork and you say I'm gonna have the, you know, Kamil widget business. I'm gonna make widgets, right? Just by going down and filing the paperwork with the Secretary of State's office doesn't create the business, right? The business then has to be built and the manufacturing or whatever it is you're doing has to still happen.

Kamil Sarji:

You're not saying a trust could be a business?

Rebecca Dupras:

Well, a trust can hold assets, but what I'm saying is that the trust itself is just

Kamil Sarji:

a lot of work involved,

Rebecca Dupras:

right? But it's just a vehicle to hold assets. So you have to actually have assets to put into the trust It doesn't generate them on its own.

Kamil Sarji:

Okay, and

Rebecca Dupras:

I think there's some Confusion out there about what a trust actually does

Kamil Sarji:

and that's why we're here We're gonna dumb it down for the smart people that are watching.

Rebecca Dupras:

Yeah, I mean it's there's nothing intuitive about this So it's that's what I usually tell clients when they come in don't feel like you can't ask me questions There's really no dumb questions because there's nothing intuitive. You know, it's like if I came into your business, right, as a realtor and I wouldn't be able to know what it is that you do every day. So there's no expectation. Why would you know how my job works? Because it is just, at the end of the day, it's a job, right? Like I know a bunch of things about a bunch of topics and I have to do my best to explain those to clients in a way that's understandable and makes sense. So, you know, I use examples. I try to listen to their goals and understand what it is that they're trying to accomplish because a lot of times that really informs a lot of what the planning ends up looking like. What are they really trying to do with their assets versus some cookie cutter, like put them into some like cookie cutter type thing.

Kamil Sarji:

Like I saw this on youTube, I want mine set up like this.

Rebecca Dupras:

Yeah.

Kamil Sarji:

Or I downloaded this. Document. I want it set up like that.

Rebecca Dupras:

Yeah. And so I know there's a lot of online, like do it yourself programs out there now where you can set up your own will for free or low cost. I've looked at a lot of them, and some of them are better than others. But the problem is that you don't know what you don't know. Right. And there's no nuance. In the way that the bot or whatever it is that's asking the questions, you know, they have their list of questions and you just aren't answering them, but they're not gonna know to, when you say, you know, Oh, I have children from a prior relationship or I don't get along with my kids, like they're going to ask you if you have children, but not like, do you like them?

Kamil Sarji:

Yeah,

Rebecca Dupras:

you know, or do you have family members that you don't ever want to be a beneficiary or have anything to do with your estate? You know, that's like human part of the conversation where you're trying to drill down into what is actually happening in this person's life So

Kamil Sarji:

so there's with AI like there's I know a lot of people who use AI a lot and even with AI Like even with negotiating people use it to help them figure out how to negotiate And when I look at those, it is missing the, like, I think humans are way better than AI, obviously. I hope so. Well, some, some humans.

Rebecca Dupras:

At least right now, yeah. Yeah.

Kamil Sarji:

But even those negotiation tactics, they're not as good as it would be if I was negotiating. So I'm sure with setting up a will, AI being like, this is my situation, create something. There's going to be things missing or things that aren't spelled out right, right?

Rebecca Dupras:

Yes. And, you know, there's been several court cases now where lawyers have used AI to generate documents, not so much wills, I haven't heard of that yet, but like briefs and things that were filed with the court, and the AI just makes up cases, like things that aren't even real, and nobody checked it.

Kamil Sarji:

Like, mentions this other case where this, uh,

Rebecca Dupras:

So and so versus so and so with like a site and everything. So you look at it and you think, Oh, this must be real, right? There's a certain way that lawyers cite to back to cases. And, you know, but what happens is you file those things. A clerk reads. You know, clerks of the court will be reading that and searching for cases and the cases aren't there and nobody checked.

Kamil Sarji:

Wow.

Rebecca Dupras:

So, you know, there's limitations. That's an example that's probably a little bit outside of what we're talking about, but I think it's a good way to think about the AI to me is like an enhancement tool, but you still have to have the underlying knowledge to be able to know what you're asking it to do, right? If you don't really know what you're What to put into the system. You're not going to get out back something that is a quality document.

Kamil Sarji:

Like you don't have to think as much. You can use it and then review everything, improve it the way you want. Check your facts and then, okay.

Rebecca Dupras:

Yeah. I mean, I use it for like cleaning up language. Like I know sometimes I'm writing something and I feel like it could be said better, so I'll pop it into something I use and have it like clean it up a little bit.

Kamil Sarji:

Yeah. Yeah. It's amazing. It makes our lives so much easier. Yeah. We don't have to think as much. We can think or focus our energy somewhere else where it's needed.

Rebecca Dupras:

Right. But when it comes to legal documents, you want to be sure that somebody who knows what they're doing is looking, you know, and things are just really hard. When I started doing this almost 20 years ago as a lawyer, and I, for 10 years before that, was a paralegal, so I've been doing this for a long time. You know, not that things weren't hard back then, I'm not trying to make myself sound old, but it seems like things have just gotten more complicated and more complex, things that used to be more straightforward. You know, tend to have complexities to them that, you know, it's hard for the average person to navigate, you know, because people are busy, like, you don't have time to, like, research everything there is to know about, like, a probate matter or a trust, right? So that's the value of expertise.

Kamil Sarji:

Okay. So with the trust, I have a ton of questions. So a trust, kind of like a corporation, can hold assets.

Rebecca Dupras:

Correct.

Kamil Sarji:

If I think of it that way. Okay, so trust. So you can have like, have this warehouse with furniture.

Rebecca Dupras:

Mm hmm.

Kamil Sarji:

That could be a trust.

Rebecca Dupras:

So what I would say is, the way it's kind of

Kamil Sarji:

Or it's money and property.

Rebecca Dupras:

Yeah, it can be any kind of asset, almost, can be held by a trust. So there's certain things that, like

Kamil Sarji:

Crypto?

Rebecca Dupras:

Yeah, you can hold crypto in a trust.

Kamil Sarji:

Okay.

Rebecca Dupras:

It's about title. So, right, you own your house, right? And when you go down to City Hall, there's a deed that says, Kamil owns this house, right? Yeah. But if you put it in a trust, what it would say is, the trustee of Kamil's trust

Kamil Sarji:

okay, okay.

Rebecca Dupras:

So, like, you go to the bank, your name is on your bank account. Same thing. Trustee of this trust.

Kamil Sarji:

Can it be called anything besides my name?

Rebecca Dupras:

Uh, virtually, yes. I mean, I think there's probably some limitations, but there's lots of people that have, like, lots of different types of trusts, and then they call them all kinds of different things, and it's like the concept of, like, the LLC, you know, sometimes, like, an LLC owns another LLC that owns by an S corp, and so you create these, like, you can create all kinds of fun complexity.

Kamil Sarji:

At what level do they stop looking? They're like, okay, I get it. This just keeps going.

Rebecca Dupras:

I would say it depends on how much money you're trying to get, right? I think that's really true for any kind of, like, thing that you're trying to do. So, who's looking and why are they looking? Generally, they're looking because they're trying to sue you, right? Or they think that they have some kind of claim against you, so

Kamil Sarji:

they'll keep,

Rebecca Dupras:

depending on how much,

Kamil Sarji:

digging deeper,

Rebecca Dupras:

money, and deeper,, is depending on how far they'll follow it.

Kamil Sarji:

Okay, so let's say this trust has to be owned by a human.

Rebecca Dupras:

Well, the trustee has to be generally a person over 18.

Kamil Sarji:

Okay, so it can't be AI?

Rebecca Dupras:

No.

Kamil Sarji:

Just kidding.

Rebecca Dupras:

It can be like a bank. Banks are trustees, so it can be like a financial entity or another type of entity.

Kamil Sarji:

Okay, like LLC?

Rebecca Dupras:

An LLC, I guess technically, I don't know that I've ever seen that before, but that doesn't mean it doesn't exist.

Kamil Sarji:

Okay. Okay. Wow. So, properties under a trust. Now the trustee, you've got a couple of trustees. What if they die?

Rebecca Dupras:

So, most trusts, if they're drafted properly, have provisions that account for that. Because one thing that people should know is that a trust will fail for a lack of a trustee. So, you want to have provisions in there that govern how trustees are replaced.

Kamil Sarji:

It's not a standard thing where a trustee, where they have a plan for if the trustee is

Rebecca Dupras:

Well, most practitioners know that. So if you use a practitioner, who knows what they're doing, they'll have that provision. So for me, you know, you have backups if they're available. Or you have a way for a new trustee to be appointed generally by the beneficiaries or some other interested party would be able to appoint somebody. If not, then it fails and you'd have to go to court and have the court decide. So,

Kamil Sarji:

okay, yeah, so that's the other question. It's like, what if they died and they didn't have a plan? What happens to all those properties?

Rebecca Dupras:

So, With any trust for any provision, what you're trying to always do is think of all of the worst case scenarios. So you're trying to put in your main provisions with your main goals and then have backups for everything. So if x happens or y happens or whatever happens, right? Like you sell the properties, then what happens? If one of the beneficiaries dies, then what happens? So you're always. Trying to think through all of those scenarios as you're drafting the documents, that's what a good practitioner will be doing. So you're giving your lawyer your goals and your lawyer is thinking about all of the possible outcomes, right? And obviously nobody can think of every possible outcome, but you do your best to be as thorough as possible. So the documents can be fairly long. People get kind of annoyed with me sometimes. They're like, I just wanted something simple. And I keep saying, I'm like, there's nothing simple in this world anymore, so just forget about that part.

Kamil Sarji:

So for a trust, aside from the ownership, does an attorney have to be tied in and kind of responsible for it?

Rebecca Dupras:

I don't typically act as trustee, if that's what you mean, like I'm not usually involved.

Kamil Sarji:

So an attorney can be a trustee?

Rebecca Dupras:

Yes.

Kamil Sarji:

So if someone wants to hide their assets, They could hide it with an attorney?

Rebecca Dupras:

No. Well, they shouldn't.

Kamil Sarji:

Under a trustee?

Rebecca Dupras:

They shouldn't.

Kamil Sarji:

The attorney has the trustee

Rebecca Dupras:

I mean, lawyers can't commit crimes either.

Kamil Sarji:

I mean, there's nothing to do with crime. I'm just wondering. Well,

Rebecca Dupras:

the concept of hiding assets feels like fraud.

Kamil Sarji:

Oh goodness, you caught me. Alright.

Rebecca Dupras:

So, I don't commit crimes. I just want to be clear about that on the record. Um, but you can create layers of complexity that will make it harder to find your assets. Like I said, like the same concepts with like the multiple LLCs or, you know, sometimes it's like LLC, trust, S Corp. You know, you can do all kinds of fun things, but you also have to remember you gotta manage and administer all of these things, right? So every time you file an LLC, you got to report back to the state. S Corp is reporting out its federal returns. And trust potentially can as well have to have reporting.

Kamil Sarji:

Every year?

Rebecca Dupras:

So if you set up a revocable trust.

Kamil Sarji:

Okay, that's another question.

Rebecca Dupras:

Regular person, you know, like the average person's trust that's gonna hold like their house and maybe some bank accounts.

Kamil Sarji:

Yeah.

Rebecca Dupras:

You don't have a reporting requirement as long as the initial what we call grantor or a settlor, the person who set the trust up, is alive. You can just

Kamil Sarji:

Attorney?

Rebecca Dupras:

No, no.

Kamil Sarji:

Oh, who initially created or wanted this

Rebecca Dupras:

So you set up a trust. Okay. While you're alive, you're typically, the way it works is you'd be your own trustee of your own trust and also the beneficiary. It's very

Kamil Sarji:

Okay.

Rebecca Dupras:

So it's all very intermingled. And then you would use your own social security number. There would be no additional reporting requirements. Once you pass away, say, you know, your wife and your kids are the beneficiaries now. Now you have to get a new tax ID number for that trust because the entity needs some sort of reporting mechanism.

Kamil Sarji:

So you need one social security number tied to a trust?

Rebecca Dupras:

Yeah, I mean, that's just the function of

Kamil Sarji:

You do a multiple?

Rebecca Dupras:

Yeah, if you have two trustees, I suppose, or two people that set it up, so a joint trust. Yeah, you can have two people each of them would be using their social security number.

Kamil Sarji:

Okay, and then revocable versus irrevocable

Rebecca Dupras:

Mm hmm. So revocable is probably pretty obvious It means that the person who set it up can change it at any time I like to say it's like that person on paper if that makes any sense.

Kamil Sarji:

Okay Yeah,

Rebecca Dupras:

so it's like they're setting up their own entity, you know, it's like the Kamil trust is like you on paper

Kamil Sarji:

I like that. We'll use Kamil as an example

Rebecca Dupras:

So then the irrevocable trust means that once you set it up, it's way, way, way harder to undo it. It doesn't mean you can never undo it, but what you are really doing is you're giving over control of the assets that are in that trust to somebody else. Generally, that's what you're doing.

Kamil Sarji:

Okay.

Rebecca Dupras:

So we do those for people who are trying to get, you know, do Medicaid protection, or they're trying to do some sort of gifting strategy. So you would. Set up an irrevocable trust, what we call fund it, which means you would change the title of whatever the asset is to the trust. And usually, not in every case, but the trustee is somebody that's not the person that owned it. They no longer have access to the principal. Sometimes they have access to income. It depends on what kind of trust you set up.

Kamil Sarji:

And it's a person, like a bank account also would have to be changed to the trust. Or

Rebecca Dupras:

if you want it to be in this irrevocable structure, then yes.

Kamil Sarji:

Okay. Okay. So, alright, so let's say I bought a multifamily

Rebecca Dupras:

Mm-Hmm.. Kamil Sarji: I wanna set up a So I put that money into the bank account for the trust. Mm-Hmm.. Kamil Sarji: How's the tax it gets, it gets taxed normally. Yeah, if you just put it into a regular revocable trust, there's no difference. It's like an LLC, it's like a pass through entity.

Kamil Sarji:

Okay.

Rebecca Dupras:

So everything would be the same as if you had owned it outright, except that it's in that different entity.

Kamil Sarji:

Okay, and the accounting is still the same and you're filing for tax every year?

Rebecca Dupras:

Schedule C income and expenses is the same as

Kamil Sarji:

Okay, what if I don't take income from it?

Rebecca Dupras:

Well, I mean, whatever you would normally do is how it would work.

Kamil Sarji:

Okay. Interesting. All right. So I can also do that and not be the trustee or set myself up. I can create it for someone else and kind of like gift it to them, but there has to be trust. That's why it's called a trust.

Rebecca Dupras:

Yeah. I mean, you can do it a couple of ways, right? Like if you have an LLC, you could assign the LLC interest over to someone else. I would technically be transferring the ownership, but if you wanted to put it into a trust so that they don't have complete full access. So again, let's say you have young children, right? But you want them to inherit your investment property.

Kamil Sarji:

Yeah.

Rebecca Dupras:

You can put it into your own revocable trust and make them the beneficiary and have, let's say you also have it in an LLC. So you assign the interest over to the trust. The trust is now member managing, you know, person for the LLC.

Kamil Sarji:

Okay.

Rebecca Dupras:

And so then the ownership is the trust.

Kamil Sarji:

Yeah.

Rebecca Dupras:

So you die, and then your kids would technically be the beneficiaries. They're next in line,

Kamil Sarji:

yeah.

Rebecca Dupras:

They may not get access to the actual underlying asset right away. So the trustee could hold the asset and pay out income to them, right? Because it's earning income, it's a rented property. Pay all the taxes, pay all the expenses.

Kamil Sarji:

Which they have access to the bank account and

Rebecca Dupras:

Yeah, so you'd assign everything. I mean

Kamil Sarji:

Yeah.

Rebecca Dupras:

The LLC would most likely own everything, so the assignment of LLC interest would cover all the assets.

Kamil Sarji:

And again, they have, should have a plan on what happens if the person dies on like the, who gets control of the money in the bank account.

Rebecca Dupras:

Yeah, so it would be the trustee would have control And then the document would outline what you want to have happen. So income gets paid out to your beneficiaries and then when they reach a certain age, this is just an example. Then they can take principal distribution so they could, the house or whatever could be distributed, distributed to them. Or it can be just held forever. Rhode Island does allow for a trust to be created, what we call dynasty trust. So you can set one up and it doesn't have to end.

Kamil Sarji:

Wow, okay. So once the person dies, how long does it take for the beneficiaries to have full control?

Rebecca Dupras:

If it was already in the trust before the person died, it probably takes a couple of months to like work out all the paperwork.

Kamil Sarji:

Okay, so they have to go to the attorney that created it and be like, Hey, this person died, we're next in line and you're going to be a beneficiary. And the process. So it's

Rebecca Dupras:

trust administration. So when somebody dies. Whatever assets that they own in their individual name, so let's say you had a house and it was just in your name.

Kamil Sarji:

Yeah.

Rebecca Dupras:

You had another house and you put it into your trust. You pass away, the house that was in your individual name has to go through probate because there's no other way to figure out what to do with it.

Kamil Sarji:

Yeah.

Rebecca Dupras:

But the house that was in the trust does not go through probate. So, but both require administration of the asset. The probate process takes longer, right? There's all kinds of, you have to go to court and wait six months after to make distributions. So, it's a longer process. The trust administration should be shorter. You know, it just depends on how complicated

Kamil Sarji:

They want to sell it off.

Rebecca Dupras:

Yeah, it depends on how complicated you want to make it. Some people are control freaks and they want to make all these Rules and complexity, and then it requires extra work, right? So if you're going to make it difficult, then it's going to be difficult to administer. If you make it fairly straightforward, it's a little bit easier. You know, so it just depends on how complicated, not only you want to be, but sometimes just your life is. A lot of people have blended families and they have complicated relationships with their beneficiaries. So it's not as straightforward as just like, here's an asset, we're going to split it in this many shares, and then you all get your portion, right? That sometimes works, but what if people start fighting? The good thing about the trust is that Or at least better. It's not that you can't fight over your shares and you can't have, you know, file a lawsuit about that, but it tends to be the threshold a little bit more complicated because you have to go to superior court and it's very, you know, it's more elevated.

Kamil Sarji:

Can you put rules in the trust where I don't want them to fight, this is what's going to happen?

Rebecca Dupras:

Yeah, you can put what's called a no contest clause. Okay. And say if anybody challenges this trust, basically they get removed. They are treated as if they had died. Yeah.

Kamil Sarji:

Wow, that's a good way to have people listen.

Rebecca Dupras:

Those aren't valid in all states.

Kamil Sarji:

Okay. Wow. So. That's really good. Oh my gosh. Hope everybody's like paying attention. There's so many ins and outs to trust. So why would someone create a trust when they could just open up an LLC and have this property under?

Rebecca Dupras:

Yeah. Again, it's like, there's not necessarily a right or wrong answer, right? So part of my job is to look at people's whole situation and understand what their goals are and then give them advice. Right? Be like, well, you can go down pathway A or B or C. There's no like, unfortunately in the law, there's never like one answer. Like if you know any lawyers and you ask them a question, they're always like, it depends, right? That's basically our standard. So it depends,

Kamil Sarji:

yup

Rebecca Dupras:

know, on what you're trying to accomplish, right? You want to just get assets to somebody else after you die. You may not need the trust if you have correct governing documents that allow for the next phase of whatever the business is that you've set up. But if you have like people you don't want to have actual access and control, you may just want them to be getting income, right? Then the trust might be a better function for that. There's all kinds of different ways to set it up so that you can accomplish what all of your goals are. So I'm not necessarily like a business attorney, so I don't want to like, Confuse anybody. I know enough about it to probably sound, you know, like I kind of know what I'm talking about. So all the people out there are going to say I said the wrong things about LLCs. Fine. Whatever. But so I generally, I think another piece of this that's important is that, you know, it's hard to be a person with assets without like a team of people. Right, so you're a estate planner. Some people are also like really good at doing the business stuff too. Again, I'm decent at some of it, but I try to stay in my lane, you know. So I have other lawyers that I tap into who I would say, okay, this person has a more complicated situation. Maybe they have multiple businesses or things that they're trying to do that's outside of my purview. So I tap into that person. They have a CPA, right? You tap into that person because they're looking at your situation from a different perspective. So what you want is everybody to kind of be looking at it from their lens and then coming up with a plan that makes sense for you. You know, it requires a bit of coordination. Sometimes it's a little bit more expensive, but you know, if you have the type of a state that needs that kind of attention, you don't want to skimp on a few thousand dollars and then end up in a mess or your family ends up in like 10, 15, 50 thousand dollars of litigation later, right? So it's better to maybe put a little bit extra time and, you know, money into the planning than to end up in a situation where now everybody's fighting or it's unclear what's supposed to happen. So it's like, you know, tied up or it can't continue. So that's the kind of stuff that's like frustrating.

Kamil Sarji:

Okay, so back to the tax thing, so you're saying if I have a trust, multifamily, money's coming in, I don't want that money on my tax, it goes under the trust's filing, so this way I'm not receiving any income, right? Just like an LLC or like a corporation.

Rebecca Dupras:

So the IRS is on to you already.

Kamil Sarji:

I'm just saying hypotheticals.

Rebecca Dupras:

No, I know, but I'm just saying like, yes, except that trusts are taxed at a much higher rate at a much lower threshold than you are.

Kamil Sarji:

Oh, okay. So why would I do that?

Rebecca Dupras:

Again, it depends.

Kamil Sarji:

Okay.

Rebecca Dupras:

So a lot of times when I set them up, I set them up so the income gets paid out to a person. Because people typically pay less taxes than trust do. So, you know, again, I'm not a tax attorney, but I know I don't remember all the numbers, but it was something like 15, 000 or 17, 000 is when you're going to start paying like the top tax rate, right? Versus like the regular person, the progressive tax rates are much lower, right? At 20, 000, you don't probably pay almost any taxes if you make that much income, right?

Kamil Sarji:

Okay.

Rebecca Dupras:

So, you want to try to push out income to people. Because they're typically going to pay less tax. But there are times when the trust will pay the tax because there's some other, like, overarching thing that needs to happen. Again, if you have, like, minor children or a situation with maybe a person who's on some kind of government benefits or something, and if they receive income, They're going to get kicked off their benefits. You'd be better off paying the tax at the trust tax rate than this person losing their benefits. You know, so there's, that's what I mean, like it just, it's all very circumstantial. It's hard to just give you like a flat answer.

Kamil Sarji:

Yeah, that's great that you're able to help people. You know, if someone came in, Oh, I want to trust. Then you're like, Hey, let's talk about it. Like, what are you trying to do? What are your goals? And then help them with, you know, what they actually will need help with. Which is something not what they watched on YouTube and want to do.

Rebecca Dupras:

Yeah, and I mean I think when people come in and they've done some research and they are more informed it is sometimes easier to have Conversations.

Kamil Sarji:

Okay.

Rebecca Dupras:

But what I try to do is when people come in I kind of have this like little speech that I give them That I'm actually like I'm in the process of trying to like record it Okay out is another thing Yeah. So I'm going to set up a way for people to look at it ahead of time if they feel so compelled, because it's almost always the same because it's not because I think people are not smart, but I want to make sure that we're having a conversation. We're using terminology the same way, right? So people come in and they say things to me like, I want to set up a living will but what they think that term means and what I think that term means may not be the same thing. So there's a point where I think you have to define terms. So I usually start out my meetings with new clients by defining like what is a will, what is a trust, what is an executor, what's a beneficiary, so that we're talking about the same thing and I'm not using terms that they're not familiar with and then they get confused, right? And then I don't get good information. Cause that's the thing is I can't do what I need to do unless people tell me the information. I can't independently verify anything that they're telling me really, except for maybe like I can go look up whether they own a house or something like that. But I don't have like, you know, can't type it in and be like, how many bank accounts is, you know, Jim Smith own? I don't, there's no way for me to know that. Right. Or does he have like kids from some other relationship that he's not telling me about, right? So, I try to tell people, like, the documents and the plan is only as good as the information that you give me. And so, it's difficult because you have to create a level of trust with people, right? And I'm sure in your business it's somewhat similar, right? You have to go in and people have to trust that, A. You know what you're doing. B. You have their best interest at heart, right? And also understand that whatever they tell me is confidential and I cannot tell anybody else. So, you know, creating that is part of the relationship. And I think it's an important part of it that needs to be more talked about because, you know, people are afraid of lawyers. You know, they think they're going to talk like down to them and make them feel stupid. And I have seen people, other lawyers in my life do that to people, but it's not helpful. You're not going to get the best, you know, responses from people if you make them feel like they don't know what they're doing, right? So you're trying to constantly, like, cultivate a level of trust with people so that they can tell you their secrets, basically.

Kamil Sarji:

Can someone buy a trust?

Rebecca Dupras:

I suppose if it was, I guess you, what I've done in the past is, you know, you sell assets from it, but it would be difficult, I think, to buy the whole.

Kamil Sarji:

You can't sell assets? So they don't want to break up the trust? Sell you this portion?

Rebecca Dupras:

Oh yeah.

Kamil Sarji:

Yeah. Okay. Yeah.

Rebecca Dupras:

Same as, like I said, the LLC or something could, you know, if it owned five properties, it could sell one of them.

Kamil Sarji:

Okay.

Rebecca Dupras:

So this, the seller is the trustee. Right? So whoever that person is.

Kamil Sarji:

Okay. So they can sell their whole batch to someone. Okay. What if there is a trustee has the beneficiaries, his kids, he dies all of a sudden out of nowhere. Oh, that was my dad. Um, his lost son. A long lost son. I should get some of that. It happens? Is it fun? Is it a fun, uh?

Rebecca Dupras:

Well, it's fun in a sense for me. I mean, just because, you know, you don't get to do those kinds of things all the time. So it's fun to like do all the research and figure out the, what the answers to the questions are. Not necessarily fun for the family though, right? So.

Kamil Sarji:

Cause in that situation, like the trustee is the dad and wanted to, I mean, have everything in a trust for a reason. And then his kids have. Now there's a third kid that he never knew about. So what happens to them?

Rebecca Dupras:

It could be a situation where the child, if they can prove that they are in fact,

Kamil Sarji:

DNA,

Rebecca Dupras:

biological child or even adopted. That's another one too. Um, then they have potentially rights over the assets. Well, the thing about the trust is that again, if they're drafted correctly, you're putting stuff in there and you're naming your beneficiaries usually by name or, and it gets, this is where it gets tricky because sometimes I'll set up trusts for people with like younger children, right? Like they're newly married maybe, and they have like one child, but they're telling me, you know, we're probably going to have more kids. And so I'll put in there, you know, Jimmy is the beneficiary after like the mom and dad. Or any children, we'll say something to the effect of like any children born of this marriage. So, but again, like, so you can prove, right? Like these two people were married, they had this child, right? But in Rhode Island, there are claims that have been made by, you know, I mean, usually

Kamil Sarji:

superior court

Rebecca Dupras:

in a trust situation, you'd have to go to superior.

Kamil Sarji:

So once a case is.

Rebecca Dupras:

But it's harder to do because you know, you will put things in the trust that say like these are my children No one else is my child. So, you know, like that's a simplified way of saying it So that like you prevent those types of things not that they don't happen that often I would say I've dealt with maybe like two of those in my career.

Kamil Sarji:

Wow. Okay,

Rebecca Dupras:

it's more for the estate side So again, remember we talked about like assets that you own outside of a trust That's where somebody could come in and make a claim. Because what probate does is it creates a forum, right? Automatically. Because you have to probate a will in order for it to be effective. So once you submit it to the court, now you have created a way for people to come forward and be heard. Versus the trust doesn't need to go to court, actually. Unless something has gone wrong, it should never go to court. So there's no forum created. So if you want to make a claim, you have to create the forum for that claim to be made as the person aggrieved, which is why it sometimes makes it a little bit more challenging to do that.

Kamil Sarji:

Okay. This is a crazy scenario. And I don't know if you've ever experienced this or heard about a situation where the dad dies. Okay. He has a trust and the kids get half of it, right? Cause that's how it's set up. Then there's another long lost son. That comes in the picture and says, Hey guys, I'm your brother. Have you ever seen a situation where those two say, Oh wow. Yeah. Let's split it all. Three of us.

Rebecca Dupras:

I haven't seen it, but I

Kamil Sarji:

have you heard of anybody like being generous? Cause I could see one person being generous, but two, Being generous?

Rebecca Dupras:

Yeah, I suppose that would be harder to do. Yeah, but the thing would be is that they would still, the people who were named, so they would still be the beneficiaries. If they were gonna give anything to this third person, that would be a gift from them to, that, they'd still be their assets. Yeah, they would have to give it to the third person. It wouldn't be coming from the trust directly. Okay. Which matters because it depends on how much money you're talking about, right? Okay. Make gifts, you know, you potentially have to file gift tax returns. So sometimes it's not as comp, it's not as easy as like, oh, it's just more fair. Sometimes it's like, well, yeah, but now I'm on the hook to pay gift taxes potentially, or, you know, it's not as easy as I can just split it into three now because the trust can't really give assets to the beneficiary that's not.

Kamil Sarji:

Unless they add the third person and keep the trust.

Rebecca Dupras:

That would be pretty hard to do, because once the person who set it up dies, it actually, at that point, generally becomes irrevocable.

Kamil Sarji:

Okay. So you can't change the terms. I mean, there should be a plan for, for that. Yeah,

Rebecca Dupras:

there's all, yeah, the contingencies go out pretty far.

Kamil Sarji:

Okay, alright. Now, the last part, which is like, mostly why people think of trust, is the nursing home. That's why I said hide. They want to hide their assets. So when they go to a nursing home, they're not, you know, What are the five years that they don't have to look

Rebecca Dupras:

back?

Kamil Sarji:

Okay, so let's talk about that a little bit.

Rebecca Dupras:

Okay, I'll do my best to explain it as simply as possible. So yes, so typically if you need to go into a nursing home, You have to be able to pay for it, right? So,

Kamil Sarji:

Monthly?

Rebecca Dupras:

Monthly. In a typical month, nursing home costs can run you between 10, 000 and up. I've heard of places now that are charging 500 per day, which if you do the math as well, like 18 grand. I don't know, maybe not. I'm not a good mathematician.

Kamil Sarji:

That's like a mansion. What are they living in?

Rebecca Dupras:

Yeah, so in places now, and I mean, this is kind of like one of my personal pet peeves about, like, our whole system in general.

Kamil Sarji:

Horrible.

Rebecca Dupras:

is that, you know, I understand that things cost money, right? And that, you know, how else are you going to pay for things, right? You got to pay for services, but it does feel like it's becoming more and more unattainable. So even if you do qualify for Medicaid somehow, it doesn't necessarily meet, it's not necessarily the best outcome. Most places now I've heard of anyway, so this is just anecdotal. They're requiring you to be able to private pay for your care for three years. Okay. So even at 10, 000, that's what 40, 000 or something? I mean 400, 000 you have to have to be able to show them that you can pay. And most people's biggest asset is what? Their house, right?

Kamil Sarji:

Yeah.

Rebecca Dupras:

So if somebody came to me and wanted to put their house into a Medicaid trust, there would be a lot of conversation about that, right? Like, what does that actually mean? What are you, again, really trying to accomplish? Do you have other assets that you can access to be able to pay for care for some period of time, right? So it's, I can explain to you how it works, but it's a lot more complicated because Medicaid beds are few and far between now, right? So a lot of places are, I've heard going out of business, like basically closing the doors if they're Medicaid only, because they can't

Kamil Sarji:

afford,

Rebecca Dupras:

they can't figure out how the numbers work, right? The reimbursements are so low compared to what they're trying to pay staff and medical costs on, you know, the business side of things. So it's complicated, right? But you can set up what is called a Medicaid Asset Protection Trust. That's typically what it's called. It is an irrevocable trust. So you set it up, you know, there's different schools of thought as to who the trustee should be or not be. So sometimes,

Kamil Sarji:

mostly it's the kids,

Rebecca Dupras:

usually it's somebody else, but it should be a house that doesn't have a mortgage on it. You can, I guess, technically put a house that has a mortgage on it into a trust like that. I have other practitioners who do it that way.

Kamil Sarji:

Landlords don't like that.

Rebecca Dupras:

They don't like that. So it's one of those things where it's not, you know, it's the theory of like, as long as the mortgage is getting paid, They're typically not paying that much attention but if they find out they can call the mortgage, right? So again, it's like you give people the information and you let them decide what kind of risk they want to take. Like it's not my job to pick the way you end up doing things. I can tell you what is legal, what is like the risks of what you're about to do, and then you have to decide, right? Because it's not my decision to make. But let's say you do, you have, you know, the perfect scenario is like kids that get along, you know, maybe mom who's living in a house who's getting a little bit older, she definitely is not going to sell it, right? Because that's the other thing, is once you put it into this trust, it's really hard to sell it and because you lose control over the principle. So even if you do sell it, it doesn't matter. So even if you put it into this trust, it may not matter. So you want to set, have a situation where you're putting an asset that you know you're going to keep into this trust and then your fingers crossed the person isn't going to need care for five years. Right, but again, these are all unknowns.

Kamil Sarji:

Wow.

Rebecca Dupras:

Right, so you do it hoping like the person is in decent health, there's no like critical diagnosis.

Kamil Sarji:

But hopefully their social security and the income or whatever from 401k and all that dividends and all that add up to ten thousand.

Rebecca Dupras:

Well, or, you know,

Kamil Sarji:

they have, right,

Rebecca Dupras:

there's some other way that they're structuring this, right? So then you can put it into this trust and if you get to the five years and you apply for Medicaid and you are otherwise qualified, there's a whole bunch of other things you need to do. The house would be technically not counted as part of Medicaid's overall looking at your financial picture. So you would, you know, quote unquote save the house. But again, it's just, you know, I tell this to people and they're like, well, I, what if I want to sell it and like move to Florida or something? And I'm like, well, you can't, I mean, you can sell it, but you don't get access to the principal.

Kamil Sarji:

Yeah.

Rebecca Dupras:

So it's tricky.

Kamil Sarji:

Buy it with, uh, money. You can do that.

Rebecca Dupras:

Yeah, I mean, technically maybe, but you know, then it becomes, it's tricky because now you're talking about two different states. Medicaid is different in every state.

Kamil Sarji:

Oh, goodness.

Rebecca Dupras:

So, you know, it's just makes it a little more complicated and technically the kids are the beneficiaries of that irrevocable trust.

Kamil Sarji:

Yeah,

Rebecca Dupras:

so they it's their money. If they don't want to buy you a new house, they don't have to.

Kamil Sarji:

Oh,

Rebecca Dupras:

so that's why again, you have to have a really sometimes perfect scenario, right? Like what family everybody gets along and everybody's on board all the time. It exists, but it's not. That's why you have to be asking lots of questions. To do a plan like that is pretty labor intensive to get all the information that you need to be able to give the people the, you know, the information that they need to be able to make the decision. I mean, I do like planning letters for them and they'll be like four or five pages long of like, here's all the scenarios, you know?

Kamil Sarji:

Wow.

Rebecca Dupras:

But again, it's so that they can make an informed decision.

Kamil Sarji:

Okay. Goodness. Yeah. All right. We started with you saying it's complicated and it is definitely complicated. So someone should definitely meet with you and talk to you about how they want to set up. So how do, how do people find you?

Rebecca Dupras:

So, I have a website. It's Duprais, D U P R A S, law. com. There's a contact form on there, and then my cell phone number is on there. My office line is, rings to my phone. Text. I have all, email, all kinds of ways people can reach me. But I would, just to clarify, right? So I have, I think that people come in with a lot of things, right, in their head, and the complexity is there, but, I have had more than one client tell me by the end of the process they feel like a lot better, right? Like that's what I'm, that's the goal is that it comes in as like a puzzle and then we leave with like a completed thing, right? So that they feel like they understand what they did, they feel good about it, they know that like they can come back and ask questions. So I try to give people like a flat fee, like I tell them this is how much they're It's gonna cost for me to do this. And then also to let them come back and say, you know, six months down the road they're watching like CNBC. Right? And they see something about taxes and they're like, wait a minute, just call me. Yeah. You can chat for a few minutes, you know, talk you off the ledge and then you can, if we something needs to be changed, we can change it. But if not, then like, don't feel like you can't call me. Yeah. You know, I'm not gonna send you like surprise bills in the mail. So I try to create more of a relationship that way. I think it works out better.

Kamil Sarji:

Yeah, definitely important. Awesome. Well, that's good to know. You help make the puzzle easier.

Rebecca Dupras:

Sometimes. I mean, I say, you know, most of the time.

Kamil Sarji:

Awesome. Well, thank you very much for stopping by and answering all my questions. Yeah. Thank you.

Rebecca Dupras:

Thank you.

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