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Wills vs Revocable Trust
Old 05-31-2016, 03:22 PM   #1
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Wills vs Revocable Trust

FIL had a will and it was painful closing out the estate, as well as expensive (he lived in NY which didn't help). Took almost 2 years to close everything out which included estate state and federal tax returns. We're trying to avoid having our kids go through what we went through as well as wasting all that money on probate and attorneys. Does anyone have any info on a revocable trust vs a will? Any advice?
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Old 05-31-2016, 04:04 PM   #2
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you really need to talk to an estate attorney , not look for info here . it can be very complex and all situations are different depending what you want to accomplish .
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Old 05-31-2016, 04:31 PM   #3
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Agree, you need an estate attorney that knows the specific laws for your state.

Simple terms: essentially a trust is to avoid probate. The trust has a portion in it that covers what the will does - the distribution of your assets. A trust also has several other sections that are not part of a will, such a financial power of attorney (POA), and medical POA.

How the trust is set up is where you need the estate attorney advise, to best fit your needs and state laws.
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Old 05-31-2016, 04:39 PM   #4
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Like the others have said, you need to consult an estate planner in your state. Presumably you've read up a little already https://www.legalzoom.com/articles/w...s-best-for-you.
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Old 05-31-2016, 05:20 PM   #5
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Trusts are more expensive than wills up front and you have to transfer the assets to the trust.

But you don't go through probate after and the process is much faster.

You either pay the lawyers up front or after the fact.
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Old 05-31-2016, 06:05 PM   #6
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I was tempted to post that you need an estate attorney, and glad to see others have done so.

We consulted with an Elder Law specialist for MIL and FIL last year, and I was astonished at how little I really knew about the complications of estate law, especially in NC. I had what I thought was a comprehensive class (6 months) of this stuff back when I got certified, but definitely learned I was swimming in the shallow end.

Our own attorney is a member of this group, and helped me find a good one in NC for our consult.
https://www.naela.org/
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Old 05-31-2016, 06:08 PM   #7
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Trusts are more expensive than wills up front and you have to transfer the assets to the trust.

But you don't go through probate after and the process is much faster.

You either pay the lawyers up front or after the fact.
In CA there's something called a pour over will - that transfers stuff in your estate to the trust, even if it's not titled in the name of the trust.

We have our big stuff titled in the name of the trust - but some of the smaller accounts aren't retitled... Our lawyer said the pour over will would take care of that.
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Old 05-31-2016, 06:11 PM   #8
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You would have likely taken two years to close out the estate whether there was a will or a revocable living trust. It is quite normal for an estate to take two years to administer where there is federal estate tax involved.
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Old 05-31-2016, 07:27 PM   #9
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The best advice for Dad that we got from an attorney was to make all bank accounts POD (Payable On Death), all property TOD (Transfer On Death) and to update beneficiaries on anything that had beneficiaries, his was an IRA and a small life insurance policy. So when Dad died nothing was left that had to go through probate.

Originally he and Mom were joint owners with right of survivorship on everything but after her death we updated beneficiaries and took care of the PODs and TODs. His life and assets were very simple by the time he passed. Don't know if that would apply in your case.
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Old 05-31-2016, 07:38 PM   #10
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A trust will avoid probate but instead you pay the attorneys up front. From what I've heard it's unfortunately common to pay an attorney to draft a trust but then he/she does absolutely nothing. After months or years of waiting you move to the next attorney. Lather, rinse, repeat until you find a more ethical one.
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Old 05-31-2016, 07:42 PM   #11
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Originally Posted by rodi View Post
In CA there's something called a pour over will - that transfers stuff in your estate to the trust, even if it's not titled in the name of the trust.

We have our big stuff titled in the name of the trust - but some of the smaller accounts aren't retitled... Our lawyer said the pour over will would take care of that.
Yes and no. It is still easier to transfer stuff into the trust during life than after death. Plus, pour over wills are not operative at incapacity only death. Thus I recommend people get their assets into their trust while alive.
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Old 05-31-2016, 07:51 PM   #12
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The best advice for Dad that we got from an attorney was to make all bank accounts POD (Payable On Death), all property TOD (Transfer On Death) and to update beneficiaries on anything that had beneficiaries, his was an IRA and a small life insurance policy. So when Dad died nothing was left that had to go through probate.

Originally he and Mom were joint owners with right of survivorship on everything but after her death we updated beneficiaries and took care of the PODs and TODs. His life and assets were very simple by the time he passed. Don't know if that would apply in your case.
This plan works great when people die but not at incapacity. Many banks do not honor powers of attorney but they do honor trusts. Thus trusts are really important to consider. PODs, in my experience, do not always work out unfortunately. Joint tenancy and joint ownership is even worse but you didn't mention that so I won't go into that common mistake that people make.
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Old 05-31-2016, 07:57 PM   #13
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Originally Posted by Sue J View Post
The best advice for Dad that we got from an attorney was to make all bank accounts POD (Payable On Death), all property TOD (Transfer On Death) and to update beneficiaries on anything that had beneficiaries, his was an IRA and a small life insurance policy. So when Dad died nothing was left that had to go through probate.

Originally he and Mom were joint owners with right of survivorship on everything but after her death we updated beneficiaries and took care of the PODs and TODs. His life and assets were very simple by the time he passed. Don't know if that would apply in your case.
I've known several families that used the POD designation on all their bank accounts. (simple estates, most everything was cash) Seemed to work well. I think all that was needed to access the funds when the account owner died, was a death certificate for the account owner and proof that they were the designated POD beneficiary (two forms of acceptable ID.)
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Old 05-31-2016, 08:04 PM   #14
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This plan works great when people die but not at incapacity. Many banks do not honor powers of attorney but they do honor trusts. Thus trusts are really important to consider. PODs, in my experience, do not always work out unfortunately. Joint tenancy and joint ownership is even worse but you didn't mention that so I won't go into that common mistake that people make.
Yes, good point. Dad had POA for when he was incapacitated. POD was for when he passed.

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I've known several families that used the POD designation on all their bank accounts. (simple estates, most everything was cash) Seemed to work well. I think all that was needed to access the funds when the account owner died, was a death certificate for the account owner and proof that they were the designated POD beneficiary.
The bank account POD was to my sister and I 50/50. I went into the bank with the death certificate and showed my ID. They closed the account and issued a Certified Check made out to both of us. She wasn't there. I endorsed the check and they then issued a check to each of us for half.
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Old 05-31-2016, 11:44 PM   #15
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The best advice for Dad that we got from an attorney was to make all bank accounts POD (Payable On Death), all property TOD (Transfer On Death) and to update beneficiaries on anything that had beneficiaries, his was an IRA and a small life insurance policy. So when Dad died nothing was left that had to go through probate.

Originally he and Mom were joint owners with right of survivorship on everything but after her death we updated beneficiaries and took care of the PODs and TODs. His life and assets were very simple by the time he passed. Don't know if that would apply in your case.
Yes, so true. Thank you all. We've already changed over all our accounts to read Me OR the Mister, so TOD and POD will be simple for us, but it's our kids. Trying to understand the basics before we go to our attorney, appreciate all the help.
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Old 06-01-2016, 08:32 AM   #16
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Trusts are more expensive than wills up front and you have to transfer the assets to the trust.

But you don't go through probate after and the process is much faster.

You either pay the lawyers up front or after the fact.
Met with an estate attorney recently and I went with the pay after the fact route. I told the attorney that since my life is pretty simple (no dependents), just a will is fine with me. I'm not in any rush to have what I put down for my heirs to transfer over, plus really didn't need a trust set up for my kitty cats .

If my situation was a bit more complex, I probably would've gone the pay up front route.

My situation is that I didn't want to die like Prince (no living parents or kids). Then have what I worked hard for go to some heirs which I felt are not deserving (they would just squander away the inheritance or let their spouse do the squandering for them). Plus, there are certain items I wish to leave to certain individuals so the getting that in writing is important.
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Old 06-01-2016, 08:38 AM   #17
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This is so specific via your State, or Country, or Province.

A good attorney won't "take your money and do nothing" either.

For Dad, the trust was perfect. It made the estate settlement easy.

For DW and myself, our attorney looked at it holistically and we had a great consult. He discussed Trusts, Wills, TOD, POD and beneficiary designations. (Don't forget the beneficiaries, even if you have a trust!!!)

An estate plan is rarely just "one thing."
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Old 06-01-2016, 09:00 AM   #18
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FIL had a will and it was painful closing out the estate, as well as expensive (he lived in NY which didn't help). Took almost 2 years to close everything out which included estate state and federal tax returns. We're trying to avoid having our kids go through what we went through as well as wasting all that money on probate and attorneys. Does anyone have any info on a revocable trust vs a will? Any advice?
Regardless of which option you choose, estate state and federal returns will need to be filed.

The advantage of a trust is 1) it can be private, 2) it is more difficult to challenge, and 3) it can be less expensive for the heirs. Here in Florida there are
statutory fees established for probate. Many attorneys charge less, but if one's estate is assigned at the statutory rate it could cost 2 1/2% to 3% of the total value of the estate, which is a lot of money. A trust would cost much less and allow earlier access to the assets.
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Old 06-01-2016, 02:42 PM   #19
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When we did estate planning, we wrote a will, to dispense our assets. We created a revocable trust for the assets to bypass probate. We also did medical POA in case we became incapacitated. It did cost lawyer's fees, but I believe that is much cheaper than probate in $ and time. Lastly, we transferred our assets into the trust. The lawyer said he knew many people who set up the trust but never put their assets into them, so it did not have any effect. It is not automatic.
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Old 06-01-2016, 03:02 PM   #20
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Regardless of which option you choose, estate state and federal returns will need to be filed.

The advantage of a trust is 1) it can be private, 2) it is more difficult to challenge, and 3) it can be less expensive for the heirs. Here in Florida there are
statutory fees established for probate. Many attorneys charge less, but if one's estate is assigned at the statutory rate it could cost 2 1/2% to 3% of the total value of the estate, which is a lot of money. A trust would cost much less and allow earlier access to the assets.
Those are all the reasons I wanted to explore the trust. Going through probate in NY cost about 1/3 of the estate with a will. 2.5 to 3% would be much better. Thanks everyone. I will def follow up with our attorney.
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