Living Will/Trust or Will?

[L Carlisle]

I haven't updated my will ever. When I was in my mid to late 20's we decided to have a will drawn up with a local attorney. Well that was 30+ years ago and we now have assets our 3 children will want to protect should either one of us or both of us die. My question is: Should I buy software and draw up a will myself or would you recommend going to an attorney?
Thanks

 

[The Cosmic Avenger]

We each have revocable living trusts (RLT), because we figured even with a 4-figure bill, it was at the time a one-time expense of 0.2% of our NW (as opposed to, say a percentage of AUM yearly), and part of that was for the more standard wills, POAs, living wills, etc.

First off, a lot of the specifics depend on your state, and if you move in retirement, you may need to reevaluate based on your new state of residence, and how it handles inheritance. From what I understand, though, a RLT is pretty irrelevant if you have no real estate or your state allows POD/TOD on deeds and all your accounts, and car titles, too. Basically, RLTs are useful for assets that would otherwise be probated. For example, my dad rented an apartment, and in NYS there is a household exemption and an exemption for a primary vehicle, so nothing was probated. His retirement accounts were all POD/TOD to me, and other than those, he only kept enough in checking to pay bills, so it was under the exemption.

If you don't think you need a trust, I would recommend seeing a lawyer about a will, or at least doing research on your state and how well wills done from forms hold up. For just a will, it shouldn't be too expensive, and IMO it would be worth the peace of mind to know that the will was as thorough as it needed to be.

 

[OldShooter]

We each have revocable living trusts (RLT), because we figured even with a 4-figure bill, it was at the time a one-time expense of 0.2% of our NW (as opposed to, say a percentage of AUM yearly), and part of that was for the more standard wills, POAs, living wills, etc. ...

This is wisdom.

Edit: In another thread, @Rosedala made a very eloquent observation about working with an estate planning attorney:

... so I can leave this world with a smile and not with a question mark. ...

 

[nwsteve]

We have a RLT for several reasons. We have several rentals and other assets that providing continuity in ownership and ability to make timely decisions timely. Second the RLT provides avenues for your trustees to manage your estate without requiring a guardianship. You can be in a coma for months and your trustees (for me it is wife and daughter as successor) are able to protect as well use as necessary assets in the trust. Your will does not take effect until you are dead. In our RLT we have all our real estate and our taxable brokerage accounts.
An estate attorney should be able to guide you if a will is sufficient or you need a RLT.

 

[OldShooter]

FWIW I believe that @nwsteve is using "RLT" as an acronym for Revocable Living Trust. Typically these are referred to as "Living Trusts" by attorneys selling them and "rev trusts" by the professionals.

One source of confusion here is that there is another type of trust, called a testamentary trust or an "irrev" trust. Typically irrev trusts are used to manage and disburse assets after the death of the grantor. There are many purposes. Among them are ensuring assets are properly managed for the benefit of a surviving spouse with no investment expertise, managing assets for minor children or potentially spendthrift beneficiaries, or providing for a special needs beneficiary in a way that does not jeopardize his/her government benefits. Rev trusts are commonly used for large charitable estates as well, with trustees that manage both the assets and an annual grant cycle.

So ... be careful out there when using the word "trust." It is ambiguous.

 

[Dash man]

I would highly recommend an estate planning attorney. They can offer good advice on your specific situation even if you think it’s simple. I don’t think software does nearly as good a job, nor do strangers on the Internet.

 

[CaliKid]

It's state by state but in many states the cost of probate court is very expensive and thus a trust is invaluable to your kids after you die... OR if you become incapacitated before death.

One of the many reasons I encourage people to use experienced estate planning attorneys is because they can give you options for setting up your affairs to benefit and protect your kids after you die. For most of us we want to benefit our kids. For example, a continuing trust with your child as their own trustee can still give them great asset protection benefits without limiting how they spend in anyway but if it's not set up exactly right the protection can be lost.

Lastly, the issue I have seen professionally many times is people that use software and/or Legalzoom often don't execute the documents correctly. This can cause the documents to be totally invalid or at least cause an extra trip to probate court to fix the problem.

In summary I would hire an experienced estate planning attorney. I would shop on credentials not price. Or do it yourself and we can find out after you die if it worked out right!

 

[L Carlisle]

Thanks I really appreciate your input. We do have an attorney group in my area that seems to only deal with these issues and the prices range from $250 to $2500 depending what I need done. We only have our home we bought 20+ years ago, our 401k and IRA's, and typical family assets. So it should be fairly simple.

 

[OldShooter]

Thanks I really appreciate your input. We do have an attorney group in my area that seems to only deal with these issues and the prices range from $250 to $2500 depending what I need done. We only have our home we bought 20+ years ago, our 401k and IRA's, and typical family assets. So it should be fairly simple.

Yes. Probably fairly simple. Trying to do this DIY using the internet is unwise, but there is a lot of internet information that will help you be an educated legal customer and may even save you some attorney time. It sounds like @CaliKid has been in this business, so I'm sure he/she will have some good suggestions to think about.

What happens if:

You and your spouse die in a common disaster.
A child goes through a divorce after receiving his/her inheritance.
A child predeceases you, leaving minor grandchildren.
A beneficiary is a spendthrift or is unfamiliar/incapable with money management
A child becomes unable to work due to a disability
Probate is an issue
You divorce
You or your spouse dies and the survivor remarries
....

IOW there is a huge list of things you don't want to think about, but should be anticipated and possibly dealt with in an estate plan. IANAL but DW was an SVP and business unit manager in a megabank Trusts & Estates department, so I have heard a lot of stories and DW has thoroughly vetted the plan worked out with our attorneys. Our plan includes both a rev trust and testamentary trusts to manage money for son and grandchildren. I think it's fairly complex as these things go. It also gets tuned up every few years as state and federal laws change.