Wills, Trusts and Estate Planning

[nun]

I've always have a very simple will, but now that I've paid off the house and the accounts are starting to get significant I find myself thinking that maybe I should be doing some more planning. I'm thinking of transferring the house and some other assets to a trust to save the trouble of probate and I've made sure all the retirement account beneficiaries are up to date.

What do you do for estate planning? Given the DIY nature of this site so you do it yourself or use a lawyer, any software recommendations?

 

[bUU]

I haven't made much headway in this. We have a very basic will from several years ago, which our financial planner reviewed and deemed merely "adequate". My colleague at work has very enthusiastically endorsed Suze Orman's "kit". We'll look into it this weekend. I don't give Orman much credence vis a vis investing, but she's okay for debt reduction and spending matters, so perhaps her Wills, Trusts and Estates kit is decent.

 

[tightasadrum]

It depends on how complicated things will be be after you/spouse die. With the new federal estate tax levels you would have to have quite an estate for that to be a problem. Of course state taxes vary considerably. My state is a non-issue.

If you need a trust, I would recommend an estate lawyer. This can be complicated or you wouldn't need one to start with. It isn't cheap, but you can die with a clear mind.

 

[FIREd]

Embarrassingly, we have done nothing in the way of estate planning. No will, trust, POA... We own everything jointly with right of survivorship and we are each other's beneficiary on our retirement accounts. We figured that was enough. Recent events however have forced us to get serious about estate planning and we are now considering hiring a lawyer. Our situation is a bit complicated by the fact that there is an international component to it, so I think that it makes sense to have a lawyer handle it. The only problem is that it irritates me to spend money on this crap.

 

[heeyy_joe]

I wish my estate was big enough to be concerned with estate planning.

 

[Original Wally]

It's not just the size of the estate. It is to avoid probate. A probated estate can easily stretch out WELL over a year. And none of the heirs can get money in the meantime. A trust can cut the time significantly. It doesn't really do much when the first spouse passes, but when the 2nd passes, it makes it easier.

Our estate, counting real property, is still south of a million, so there is no TAX due, but we just wanted to make it easier for kids.

Also, if there are family dynamics that compel you to make choices about who gets how much, a trust is much more difficult to challange than a probated will. In other words, your wishes are more likely to be carried out.

 

[RockyMtn]

I have a will and trust. Had lawyer do it. Cost a couple of thousand but worth it in the long run. If your estate is large or complicated a trust is a smart move.

 

[JOHNNIE36]

This has been a topic of discussion a number of times on this forum. We established a trust a couple years ago and got it done for $1000. A lot would depend on the number of properties and/or assets you would be putting into the trust. Ours was pretty simple but you could probably expect to spend 1-2 grand. In our case it was the only way to assure our assets would be distributed the way we wanted.

 

[UtahSkier]

DW and I setup an AB trust. This way, we each can independently specify how to dispose of assets after we both pass.

The AB trust also effectively allows more of the estate to be untouched by the estate tax... should that ever be a factor.

 

[smjsl]

Most accounts have POD designations / beneficiaries; so heirs will not be hurting "waiting" for the rest. Just created a simple will based on a file found online for the rest; notarized a local branch. Also, I do not expect the heirs to fight over remains given the simple / clear instructions and knowing the people...

 

[Sue J]

We did wills when our sons were young and we wanted to designate a guardian in case we both died before they were 18. Later we revised them when our guardian (my sister) got divorced and we wanted to designate a new guardian ( DH's sister). The rest of it was a few pieces of family jewelry to each son and simply leaving everything to each other or our kids.

We have beneficiaries on my IRA, Vanguard, and our bank accounts. DH's pension is already designated as 100% to me.

After my mom died about 18 months ago we had a lawyer go over Dad's will. The lawyer suggested that Dad's condo have a TOD added and that his bank account have a POD. Also changed his IRA beneficiaries. Everything is now designated to go to my sister and I 50/50. I'm already P.O.A on his accounts and I keep the checkbook. He has since sold the condo so things should be simple when the time comes. His only other asset is a Navy life insurance policy from WWII. I don't know who the beneficiary is on that, I bet it was his mother if he never changed it. I should ask him about that.

The lawyer said that if all his assets have TOD, POD or beneficiaries then the will is not used and probate is not necessary.

 

[Seeking Hobbes]

As most have wisely said... much depends on your particular situation.
I contemplated a Trust... but being...
... Single
... With no children
... Living in a state where probate is quick and straight forward
... With siblings either estranged or self-sufficient

I didn't see the need.
(In retrospect, I probably didn't even need a lawyer to draw up the Will/POA/EOL docs.)
Of course, my lawyer tried to talk me into a trust... but, ultimately, even he couldn't justify it.

Note:
I also thought that a trust might be useful to protect my "estate" from the over zealous lawyers, should I have the misfortune of an accident involving someone else; but I found that an affordable umbrella insurance policy can suffice in that regard.

 

[meierlde]

It's not just the size of the estate. It is to avoid probate. A probated estate can easily stretch out WELL over a year. And none of the heirs can get money in the meantime. A trust can cut the time significantly. It doesn't really do much when the first spouse passes, but when the 2nd passes, it makes it easier.

Our estate, counting real property, is still south of a million, so there is no TAX due, but we just wanted to make it easier for kids.

Also, if there are family dynamics that compel you to make choices about who gets how much, a trust is much more difficult to challange than a probated will. In other words, your wishes are more likely to be carried out.

Actually if you have assets that are payable on death such as bank accounts and the like, or brokerage accounts that have a beneficiary they pass automatically outside the estate. Likewise Insurance policies, just send the death certificate and the form in and the money appears soon.

As to the complexity of wills it depends on the state and its laws. Note that any estate taxes can't be avoided by trusts, its just the private estate tax of the lawyers fees, and the various court costs.

 

[Texas Proud]

Embarrassingly, we have done nothing in the way of estate planning. No will, trust, POA... We own everything jointly with right of survivorship and we are each other's beneficiary on our retirement accounts. We figured that was enough. Recent events however have forced us to get serious about estate planning and we are now considering hiring a lawyer. Our situation is a bit complicated by the fact that there is an international component to it, so I think that it makes sense to have a lawyer handle it. The only problem is that it irritates me to spend money on this crap.

Similar situation... wife owns real estate in a foreign country... and their laws do not care squat about our laws....


Right now I am just hoping nothing happens before the kids get old enough and launched... that is when she said she will sell....

 

[Texas Proud]

It's not just the size of the estate. It is to avoid probate. A probated estate can easily stretch out WELL over a year. And none of the heirs can get money in the meantime. A trust can cut the time significantly. It doesn't really do much when the first spouse passes, but when the 2nd passes, it makes it easier.

Our estate, counting real property, is still south of a million, so there is no TAX due, but we just wanted to make it easier for kids.

Also, if there are family dynamics that compel you to make choices about who gets how much, a trust is much more difficult to challange than a probated will. In other words, your wishes are more likely to be carried out.

It matters what state you live... when my dad died (a long time ago), we went to the court, gave them the will which said 'no probate' or something and that was that...

When BIL died, DS did nothing... zip, nada... she has transferred all accounts to her name by sending a death certificate to the various entities... AFAIK, nothing is left in his name... She did have the benefit of no kids...

 

[Brat]

In some states probate is slick and easy, in others not.

We have wills and a trust. The trust is not for tax reasons, it is to enable our children to manage our asserts when we cannot.

 

[bUU]

I'm beginning to wonder if I missed something, when my mother passed away (or if I was so depressed that it went by and I didn't really recall it). That was in New Jersey, and it was like there was truly nothing to it. There was a will. I filed it myself. There was no real estate or significant personal property to liquidate. The whole estate was well less than $500k. And it really wasn't any real work or expense. The only pain in the whole process (besides the obvious) was with regard to a TOD account, where the brokerage wanted a Medallion Signature guarantee from all three beneficiaries on the same piece of paper, even though we lived in three separate states. We told them 'no' but it took escalating up the management chain a bit to get them to relent.

 

[scrabbler1]

As most have wisely said... much depends on your particular situation.
I contemplated a Trust... but being...
... Single
... With no children
... Living in a state where probate is quick and straight forward
... With siblings either estranged or self-sufficient

I didn't see the need.
(In retrospect, I probably didn't even need a lawyer to draw up the Will/POA/EOL docs.)
Of course, my lawyer tried to talk me into a trust... but, ultimately, even he couldn't justify it.

Note:
I also thought that a trust might be useful to protect my "estate" from the over zealous lawyers, should I have the misfortune of an accident involving someone else; but I found that an affordable umbrella insurance policy can suffice in that regard.

Also single with no kids. I had a lawyer prepare my will as well as POA and a Health Care Proxy. It cost me about $1,500 but it is done so I don't have to think about it unless something big in my life changes. I had already seen the lawyer in action because he had just updated my dad's will which included a complicated IAMT (Irrevocable Asset Management Trust) along with POA and HCP.

 

[brett]

We have a will, POA, etc. The whole nine yards. Had it done 5 years ago. Later this year we will review and update as necessary.

The other part of the planning process for us is arranging our investments, assets in such as way as to shield them from tax as they pass to our children.

 

[BellBarbara]

We did a trust, cost 5K, but there is more benefit in my state at least, than avoiding probate. There are often tax consequences (at least in my state mass) that can be handled by a trust. Also, second marriage here, with kids on both sides. We wanted to make sure the surviving spouse was not able to take the other's kids off as beneficiaries. Not that we don't trust each other, but dementia, undue influence, etc.....def could happen. We also have a co-signer, once one of us passes. This is to make sure the hot exotic dancer doesn't interfere and spend all the cash or even that one of us doesn't invest in some wacko scheme.

My grandfather had about 1.5M and did not have a trust (in Calif). His only child, my mom, had to wait 2 years to get the money and the state approved fees were about 50K. My sister had to help - they had to write to all of my grandfathers brothers and sisters, and their kids, to see if they would sign off on not getting their 2%. He had 9 brothers and sisters, with all the resulting kids.

If you can swing it, please get a trust. My mom got a trust - my sister never had to see an attorney - just went to the banks and such with the trust docs and my mom's death certificate and got all of the assets. Easy as pie.

 

[daylatedollarshort]

We have trusts, wills, power of attorney and health care directives and just had them updated.

We also went through most of the retirement accounts and updated the beneficiaries. We still have a few of those left to review, but the main dollar ones should be current.

 

[brett]

Our tax accountant goes through a list just about every year after our tax discussion. It includes items like insurance, wills, POA's, change in executors etc....all the usual items that are very easy to ignore.

 

[packrat44]

Like the Fram filter ad states- "You can pay me now or you can pay later."

With a trust you get to choose the attorney (our cost 10 years ago was $2K) or let the courts pick an attorney when a will goes through probate. When you set up a trust you know what it is going to cost, you set the terms you want, you can maximize what is past to your beneficiaries, distribution is quick, no one can challenge your direction, it does not go on public display. When the court assigns an attorney there is no concern about racking up high expenses. Any number of people can challenge a will delaying distribution, running up legal fees, having proceeds end up in the hands of those other than who you intended, and non-tax efficient.

If you have little in assets and do not intend on acquiring much, go with a will. Otherwise a trust is hard to beat.

 

[growing_older]

The only problem is that it irritates me to spend money on this crap.

In my situation, POD plus beneficiary designations plus a will (good state for probate) seems sufficient. Which doesn't stop lawyers from suggesting expensive trusts. But even with my somewhat simple situation, as life circumstances have changed I've had to update and redo the will several times. One of the lawyer's selling points was that you could spend the money now but know that everything is set for when you die, but I think that's only if there are no material change in your personal situation. It's not guaranteed that if you spend $5,000 to get a fancy trust that that will be the end of it. If life situaiton changes, you may need another one, and so on.

 

[reubenray]

The DW and I have been discussing getting a will. We have no kids and what we don't spend we plan on leaving to a select few neices/nephews. Of course she will get mine $$ and I will get her $$.

What would we actually need to do?

When both of my parents got sick my brother talked them into a will, but it was not done with a lawyer. Prior to them both passing away six weeks apart last year they moved as much $$ as possible into their checking account with my older brother having access. This simplified a lot, but we still had to deal with the house and one IRA account. When we went to a lawyer about the rest he stated that the will we had was not legal.