To Will or Not To Will, That is the Question

[MasterBlaster]

I have a fair amount of knowledge so am happy to share. This would be relevant in California and perhaps some other states. General free advice so take it for what it cost you.

If you have any real property (even a timeshare) you should probably consider a living trust. In California all interests in real property require trips to the probate court after death. If the value is less than $150k there are abbreviated probate court options but it's still probate court and it's still much more expensive than a trust.

Also, payable on death accounts are ok but that is only death planning. What about if you become incapacitated? You want it to be easy for your trusted person to pay your bills. A trust is superior. The problem is a lot of financial institutions do not honor, or only honor after a fight, powers of attorney. They honor trusts but not powers of attorney; I am not sure why. Unless you use their specific POA form from the financial institution.

Also, in addition to the trust, you should have a will, a POA, a health care directive (or called living will or maybe called health care POA), a HIPPA release, a certified extract of trust and a general transfer statement which indicates your intent for your assets to be in your trust. This last document is important in California as it can help transfer assets to a trust after death without a full probate.

IRAs and retirement accounts are a totally separate issue due to tax implications. Can be better to name individuals directly rather than a trust. However, if minor children then name the trust.

Above all else... MAKE SURE YOUR ASSETS (other than retirement accounts) ARE ACTUALLY TITLED IN YOUR TRUST!

Trusts are all good and fine and thank you for your post and the information.

However, I'll take an alternative position for arguments sake.

There are no trust police and pretty much nobody is watching. Some morally challenged executors may just help themselves at the expense of the rightful successor trustees. I have personally seen, as a bystander such behavior.

In Probate (As you know) the court supervises the disbursement of assets. There is much less chance for "funny business" than with a trust.

Probate costs are not insignificant, but as a percentage of the estate, these fees are modest. So for example, In California a $2MM estate would have (normal) probate fees of $33k. that's just 1.65% of the estate value. While I agree that $33k is not chicken feed, relative to the estate it isn't all that much.

So absent special circumstances, I believe that for many estates that normal Probate (with a professionally drawn will) is the way to go.

In California all interests in real property require trips to the probate court after death

If title to the property is held in Joint-Tenancy then the property will pass to the other joint tenant(s) outside of probate.

 

[ChicagoGal]

Interesting reading. I've been thinking about this for a while now. I'm 53, single, no kids. Financial assets include 401k, IRA, Vanguard accounts and about 50% equity in my house. Plus all my "stuff", the most valuable of which are antiques left to me by my grandparents.

If I die without a will, I believe that my estate would be divided among my dad and my two sisters. Frankly, if I made a will, that's who would get my stuff, too, although maybe I would leave some things directly to my nieces and nephews. Not sure I see the value in going to the trouble of creating a will.

I should probably do something about the health care POA, though.

 

[Birdie Num Nums]

Don't forget the "Advance Directive" (sometimes called "Living Will") which can go on file at your local hospital and doctor's office. It spells out your wishes if your agent is not available.

Or, with today's technology, store in your phone, and/or file/register with your local county clerk (in some--all?--jurisdictions).

 

[easysurfer]

Interesting reading. I've been thinking about this for a while now. I'm 53, single, no kids. Financial assets include 401k, IRA, Vanguard accounts and about 50% equity in my house. Plus all my "stuff", the most valuable of which are antiques left to me by my grandparents.

If I die without a will, I believe that my estate would be divided among my dad and my two sisters. Frankly, if I made a will, that's who would get my stuff, too, although maybe I would leave some things directly to my nieces and nephews. Not sure I see the value in going to the trouble of creating a will.

I should probably do something about the health care POA, though.

Hi ChicagoGal,

I'm deducting from your name that you are in Illinois. Nolo has a good summary of Intestate Succession in Illinois.

Looks like in your case, without a will, your dad would get a double share.

parents and siblings
parents and siblings inherit your intestate property in equal shares, except that if only one parent is living, that parent gets a double share

Intestate Succession in Illinois | Nolo.com

 

[Walt34]

For a will, are naming a Power of Attorney and naming a Health Care Agent a requirement? Or are they very important but not required documents that make the "meet my maker" process go a lot smoother?

None of them are absolutely required but they sure do make things easier for those looking after you. It is not something you do for yourself, it is something you do for them.

As MasterBlaster pointed out these are all separate documents (at least in MD and WV). We had them all done with an attorney ~two years ago and for the two of us it ran $800, which I think is reasonable.

DW and I learned about this when looking after her father. He did have a will, POA, health care directive, etc. and they made things so much easier for her when he went into the nursing home. Without the POA for example it would have taken a court order to change his address at the post office so we could forward his mail to here! With the POA it was filling out a form and showing the clerk a copy of the POA.

Dealing with the bank, nursing home, doctors/hospitals, and every other institution was made so much easier with the POA and health care directive instead of having to get court orders for every decision, no matter how minor. Not to mention the time and expense it saved DW.

Also put in there what to do with your um, remains when that time inevitably comes. If you don't decide someone else will make that decision for you. Burial or cremation or something else? In WV this is a separate document but again state laws will vary.

 

[easysurfer]

None of them are absolutely required but they sure do make things easier for those looking after you. It is not something you do for yourself, it is something you do for them.

As MasterBlaster pointed out these are all separate documents (at least in MD and WV). We had them all done with an attorney ~two years ago and for the two of us it ran $800, which I think is reasonable.

DW and I learned about this when looking after her father. He did have a will, POA, health care directive, etc. and they made things so much easier for her when he went into the nursing home. Without the POA for example it would have taken a court order to change his address at the post office so we could forward his mail to here! With the POA it was filling out a form and showing the clerk a copy of the POA.

Dealing with the bank, nursing home, doctors/hospitals, and every other institution was made so much easier with the POA and health care directive instead of having to get court orders for every decision, no matter how minor. Not to mention the time and expense it saved DW.

Also put in there what to do with your um, remains when that time inevitably comes. If you don't decide someone else will make that decision for you. Burial or cremation or something else? In WV this is a separate document but again state laws will vary.

Totally agree about the documents something you do for them and not for you. I read were expressing the same is the preparation is one of the best gifts you can give to your family. Makes honoring your wishes when the time comes so much easier.

 

[Souschef]

We live in a small town, which is probably why it was less expensive. We paid $400 for a package for both of us of wills, POA and Advance Health Directive.

 

[GrayHare]

If like a lot of folks here you have Vanguard accounts, next time you are in your account you can set up the beneficiaries with simple mouse clicks.

Note that, per Vanguard warning, for non-retirement accounts if you specify beneficiaries that conflict with those stated in a will or trust you may upon your death open a can of worms for the conflicting beneficiaries. Tread carefully.

OTOH, perhaps that's what Sunset meant about "setting up" the beneficiaries.

 

[Walt34]

My sister once received a very nice check when her jerk ex-husband passed away. He had forgotten to change his beneficiary on his savings accounts.

I've heard of that happening and it was something I made sure not to overlook when I got divorced. No way am I gonna foot the bill for her next cruise!

 

[Sunset]

Interesting reading. I've been thinking about this for a while now. I'm 53, single, no kids. Financial assets include 401k, IRA, Vanguard accounts and about 50% equity in my house. Plus all my "stuff", the most valuable of which are antiques left to me by my grandparents.

If I die without a will, I believe that my estate would be divided among my dad and my two sisters. Frankly, if I made a will, that's who would get my stuff, too, although maybe I would leave some things directly to my nieces and nephews. Not sure I see the value in going to the trouble of creating a will.

I should probably do something about the health care POA, though.

Assuming you are in IL.
You can write out your own will - there is will software available (lawyers use software too), just be sure to get it signed by 2 folks who are not in the will. Notary is not needed.
(I'm not a lawyer).

 

[meierlde]

Interesting reading. I've been thinking about this for a while now. I'm 53, single, no kids. Financial assets include 401k, IRA, Vanguard accounts and about 50% equity in my house. Plus all my "stuff", the most valuable of which are antiques left to me by my grandparents.

If I die without a will, I believe that my estate would be divided among my dad and my two sisters. Frankly, if I made a will, that's who would get my stuff, too, although maybe I would leave some things directly to my nieces and nephews. Not sure I see the value in going to the trouble of creating a will.

I should probably do something about the health care POA, though.

Note that the whole issue depends on the state involved as do the lawyer fees. In Tx there is the independent executor, where once you get the will accepted, all you have to do is provide an inventory to the court.
But consider that you will have to do a probate of some form for the real property. (be thankful you don't have property in 2 or more states, as that means a subsidiary probate in each state involved).
A local lawyer could also compare the costs of a trust to that of probate. When my parents made their wills the lawyer (who was also a cpa) did not recommend a trust.

 

[Walt34]

If I die without a will, I believe that my estate would be divided among my dad and my two sisters.

Ah, but do you know for sure what the law of intestate succession is for your state? Going by this site it seems that you are correct (assuming IL).

Still, having a will removes any doubt about what your intentions were and will probably speed up the probate process since you can name the executor in the will instead of waiting for a court to appoint one.

 

[rodi]

The ex spouse thing is real. My brother didn't update his beneficiaries - and his ex wife got his 401k and state employer provided life insurance. That wasn't enough - she tried to get all sorts of other assets and we had to keep reminding her (and sending her copies) of the signed divorce settlement agreement that showed she was not entitled to these assets. She even tried hard to get some family jewelry that she had been specifically compenstated for in the divorce decree to void any claim she might have. (My great grandmother's engagement ring.)

Thankfully, after my brother's estate was settled, we didn't hear from her again. It irks my sister and I that she received the money she did. (Disclaimer - Bro left his estate to his church, not us... but we had to deal with her greedy demands.)

 

[CaliKid]

Trusts are all good and fine and thank you for your post and the information.

However, I'll take an alternative position for arguments sake.

There are no trust police and pretty much nobody is watching. Some morally challenged executors may just help themselves at the expense of the rightful successor trustees. I have personally seen, as a bystander such behavior.

In Probate (As you know) the court supervises the disbursement of assets. There is much less chance for "funny business" than with a trust.

Probate costs are not insignificant, but as a percentage of the estate, these fees are modest. So for example, In California a $2MM estate would have (normal) probate fees of $33k. that's just 1.65% of the estate value. While I agree that $33k is not chicken feed, relative to the estate it isn't all that much.

So absent special circumstances, I believe that for many estates that normal Probate (with a professionally drawn will) is the way to go.



If title to the property is held in Joint-Tenancy then the property will pass to the other joint tenant(s) outside of probate.

Your thoughts aren't totally off base but in my real world experience....

1) I had a client last year, in the fiduciary position, gamble over $500k away during administration. That was a court "supervised" probate. Yes, not a trust. GONZO! FIVE HUNDRED K! Nice job by the probate "police" there.

2) If you have a simple situation on a $2m case an attorney fee of $33k in probate or maybe $1k or $2k for simple trust admin. As an attorney I MUCH prefer the probate but for my clients I think the latter makes a tad more sense.

Each state is different but in California it's a no brainer. Just pick a good trustee so you don't need the trust police.

 

[2017ish]

Your thoughts aren't totally off base but in my real world experience....

1) I had a client last year, in the fiduciary position, gamble over $500k away during administration. That was a court "supervised" probate. Yes, not a trust. GONZO! FIVE HUNDRED K! Nice job by the probate "police" there.

2) If you have a simple situation on a $2m case an attorney fee of $33k in probate or maybe $1k or $2k for simple trust admin. As an attorney I MUCH prefer the probate but for my clients I think the latter makes a tad more sense.

Each state is different but in California it's a no brainer. Just pick a good trustee so you don't need the trust police.

We don't do much work in this area, but fell into a case that ended up involving probate/conservatorship. Long story short, the quality of people/lawyers who tend to be appointed by our local courts in that area is abysmal. We are now representing client in somewhat uphill lawsuit against the court-appointed trustee/administrator after a grossly bungled disposition of the main property in which the estate had an interest...

 

[easysurfer]

my small dilemma

Okay, so I'm going through the exercise of updating my will. In the will questionnaire, the section for what to leave to who asks for beneficiary info like address and phone number.

I prefer to go under the radar about letting family know I'm about to update my will. I'd like to leave some stuff to a few of my nieces but don't know their phone numbers. I can ask their dad (my brother) what their numbers are. But it would be odd if I asked and didn't say why, yet at the same time I kinda don't want him to know that I'm working on my will as that may start the "family vultures" (him being one of them?) to start circling .

Your thoughts?

I guess related, is if you have or will have a will, do you believe in telling the beneficiaries? Or do you believe best to keep under the radar as the knowledge can lead to speculations and rumors?

 

[Done]

the section for what to leave to who asks for beneficiary info like address and phone number.

Maybe you can find the info online. It's remarkable what can be googled. I wouldn't ask for the phone numbers unless you can come up with a reason to contact them. Perhaps the software allows you to leave the phone number blank.

do you believe in telling the beneficiaries?

We don't tell the beneficiaries anything because we may change our minds. We have revised our estate plan several times as circumstances and relationships change. Some people will be pleasantly surprised to receive a house!


Sent from my iPad using Early Retirement Forum

 

[cathy63]

I guess related, is if you have or will have a will, do you believe in telling the beneficiaries? Or do you believe best to keep under the radar as the knowledge can lead to speculations and rumors?

Well, our only child knows that she's the sole beneficiary of our estate. On the other hand, she also knows we're only in our early 50s and plan to live long enough to deplete it significantly.

 

[growing_older]

The addresses and phone numbers are not required. They are just trying to unambiguously identify the person you intend to leave the money to. Some versions of that questionnaire ask for SSNs. Again, not necessary. Unless you have multiple nieces with the same or very similar names, identifying with relationship and name is sufficient. No need to call beneficiaries and ask for numbers.

 

[easysurfer]

The addresses and phone numbers are not required. They are just trying to unambiguously identify the person you intend to leave the money to. Some versions of that questionnaire ask for SSNs. Again, not necessary. Unless you have multiple nieces with the same or very similar names, identifying with relationship and name is sufficient. No need to call beneficiaries and ask for numbers.

I'm going to go this route and leave the phone number area blank and just specify the name and addresses. Don't want to add more speculation than I have to.

Actually for two nieces that's already too late as I went ahead and sent a message and asked for their info. I did get a touching message back thanking me for thinking of them and saying that I'm the best uncle they have. Gulp. The good news is I didn't promise anything like a huge amount or percentage of my estate but just a couple of items I had when there was a time they stayed with me as kids during their mother's divorce.

update: I decided to just go ahead and ask my brother for their phone numbers but did so in a non-committed email. I pretty much said, can I have my nieces' numbers in case I decide to leave them a little something in my will update, giving myself some wiggle room.

 

[meierlde]

The addresses and phone numbers are not required. They are just trying to unambiguously identify the person you intend to leave the money to. Some versions of that questionnaire ask for SSNs. Again, not necessary. Unless you have multiple nieces with the same or very similar names, identifying with relationship and name is sufficient. No need to call beneficiaries and ask for numbers.

Actually if you specify x and y children of Z your sibling, that does uniquely identify them, all be it the executor might have to ask for a birth certificate. The issue with addresses and phone numbers is that they do tend to change and unless you update the will the information could go stale.

 

[aza455]

Do you really need a will?

There is a lot of talk about the need to leave a will. However, in many circumstances with a little planning, you don't need a will. For instance, if your assets are in the below-listed accounts, don't bother to have a will:

- property you’ve transferred to a living trust
- life insurance proceeds
- funds in an IRA, 401(k), or other retirement account
- securities held in a transfer-on-death account
- payable-on-death bank accounts, or
- property you own with someone else in joint tenancy or tenancy by the entirety.

All of these assets will pass to the surviving co-owner or to the beneficiary you named, whether or not you have a will...

Just my 2 cents.

 

[meierlde]

There is a lot of talk about the need to leave a will. However, in many circumstances with a little planning, you don't need a will. For instance, if your assets are in the below-listed accounts, don't bother to have a will:

- property you’ve transferred to a living trust
- life insurance proceeds
- funds in an IRA, 401(k), or other retirement account
- securities held in a transfer-on-death account
- payable-on-death bank accounts, or
- property you own with someone else in joint tenancy or tenancy by the entirety.

All of these assets will pass to the surviving co-owner or to the beneficiary you named, whether or not you have a will...

Just my 2 cents.

It seems from what I have heard attorneys tend to produce a pour over will even with a living trust just in case something is omitted. One thing that could be omitted otherwise is jewelry and household goods and furniture. Since these things don't have titles it is not possible to put them into a trust. A pour over will just puts the residue of your estate into a trust. Pour Over Will Definition, Examples, Processes. It is sort of a just in case something is is not put into the trust, this takes care of it. It need not be a very complex will as the link provides an example.

 

[Clone]

Done properly, having correct beneficiaries to accounts, payable on death bank accounts, trusts to hold property, plus a good will all makes for a reasonable estate settlement. Most of the time, in my observations, the problems come from several sources:

1. Changes in relationships without changes in documents. Assets get handed to ex-spouses, bankrupt kids, etc.

2. Leaving real estate to multiple parties. The classic example of a piece of farm property being left to 2 siblings, who then were married, had kids, divorced, remarried, died, etc. You end up trying to split one piece of property into unequal shares to 15 different parties, each with different issues.

3. Directing from beyond the grave. Trying to control or manipulate a persons behavior such that they have to earn their inheritance. A great way for the lawyers to step in and split up the estate amongst themselves.

4. No will at all. A great way to split up families and others. A money making opportunity for the court appointed folks.

 

[Brat]

I am glad you mention this as I forgot. You make a good point. DNR's are generally for elderly or VERY sick people. It's literally just that... they DO NOT RESUSCITATE you. Most younger people want to be resuscitated and then can always be removed from life support if things are bad. The form, at least in California, is now called a POLST. I believe the website is polst.org and it's something you would do with your doctor.

I had a discussion with my physician last week. She said to put your POLST on top of the refrigerator as that is where emergency responders will look if you are at home. I am not yet to the point that a physician will write a POLST but when I get one not only will it go on my frig I will put a copy in my purse. Since I am a Kaiser patient she said my POLST will be in my medical records.