Trusts, wills, and inheritance

[CardsFan]

Now most of our estate will transfer to our heirs via beneficiary designations for financial accounts and/or enhanced life estate deeds for our properties and I presume that it would be harder for someone to make a claim for those than to contest a will. There is next to nothing that will pass via our will so they can give it a go if they wish to but it will cost them money to contest.

This what we have done, as well. We only have one DS, and he will get everything (though we intend to do some significant charitable giving when get to RMD's). We still have a will to cover possessions and anything we might have missed, but over 90% (probably over 95%) of our net worth will transfer directly upon the last one's demise. Our will is over 20 years old, but I don't see a need to update it. He did recently get married, but we will leave to him to decide how that is handled.

For the record, DS is over 40, and very conservative with his/their money, so we are past the point of worrying about giving a younger child a boatload at one time.

 

[Badger]

Without going through a long set of stories about each of the brothers I will just say I don't even want them to have $1 for what they have done. I think I will just make it clear in both the trust and will as specifically as possible by their names that they receive nothing. I will also make it clear by making my wife's children beneficiaries in as many investments as we can.
That is about all I think I can do. Thanks for the posts.

Cheers!

 

[pdxgal]

I've heard of several cases where the disliked relative was specifically named in the will for a bequest of something like one dollar. That was to preclude any claim that they were "inadvertently forgotten" in the will.

Oooh, that is brilliant! Too bad my cousin who died in 2020 didn't do that. Another cousin she left out of her will (probably on purpose, as he's a bit of a PITA) came forward to contest the will. Added about 6 months to the probate process. Last I heard he was not granted anything as a result of his protest. A simple phrase like you noted would've avoided all the hassle.

 

[Montclairbobbyb]

Don't Forget...

Any assets you own where you can name beneficiaries, DO SO. That is the most expeditious way to pass assets to others upon your death.

I learned this the hard way; my Mom was named as sole heir to my Dad's assets, but he apparently forgot to name her as beneficiary for several investment assets, and after he passed last year, I (as executor) have had to trudge through unbelievably cumbersomel steps over many months just to get these assets to my Mom.

 

[RHONDAVE]

My wife and I have trusts and wills that need to be updated and want to make sure there are no problems with the estate going to who we designate and eliminate any contesting when we are gone. We both have brothers who were trustees when our respective parents passed away and did numerous things to grab as much as they could in the process. It took lawyers at our own expense to stop some of it.
Neither of them are named in our trusts and wills and would like to insure they won't be able to contest them by claiming they are family and were just inadvertently left out. It is possible they would try.
As a belt and suspenders person would it be reasonable to identify them to NOT receive anything from the estate and also anyone contesting the trust or will is to be automatically excluded from the trust or will?

Cheers![/QUOTE

OMGOODNESS
This hits all the bullet points of our 200 year old family farm "scandal' distribution that I have been considering getting feedback from this forum.
Would love to read all of this first and invite you to PM ME.

 

[bigriver]

My lawyer advised me to include a sibling instead of leaving her out of my will completely. He advised to not leave a petty amount. I think I left 20k. I’m now looking at revokable trusts to prevent probate.

 

[yclipse]

> I suggest that you also find a junkyard dog attorney and name him or her as executor.

You do not want to do this. A lawyer will charge hundreds of dollars per hour. A non-lawyer executor will charge tens of dollars per hour.

 

[OldShooter]

> I suggest that you also find a junkyard dog attorney and name him or her as executor.

You do not want to do this. A lawyer will charge hundreds of dollars per hour. A non-lawyer executor will charge tens of dollars per hour.

Penny wise, pound foolish. The OP wants to head off a situation where his brothers contest the will. A junkyard dog will potentially give them second thoughts about the cost and likely payoff from contesting. A "tens of dollars" executor is a glorified clerk and will not intimidate anyone. Not sure someone like that can be found anyway. "Tens of dollars" won't even get you an appliance repair.

 

[JBTX]

This whole "leave them a dollar" thing is a myth. There are numerous articles online explaining why it's a bad idea. Here's just one: https://www.snyderlawpc.com/should-i-leave-1-in-my-will-to-disinherit-an-heir/



Also, "no contest" clauses are not always enforceable anyway. Here's a state-by-state summary: https://www.actec.org/assets/1/6/State_Laws_No_Contest_Clauses_-_Chart.pdf

I’m not a lawyer but I’ve also read the $1 thing is not necessary and may even cause problems as you have quoted. Seems like to just explicitly state that you are intentionally disinheriting a party is sufficient.

 

[Imackenzie]

My wife and I have trusts and wills that need to be updated and want to make sure there are no problems with the estate going to who we designate and eliminate any contesting when we are gone. We both have brothers who were trustees when our respective parents passed away and did numerous things to grab as much as they could in the process. It took lawyers at our own expense to stop some of it.
Neither of them are named in our trusts and wills and would like to insure they won't be able to contest them by claiming they are family and were just inadvertently left out. It is possible they would try.
As a belt and suspenders person would it be reasonable to identify them to NOT receive anything from the estate and also anyone contesting the trust or will is to be automatically excluded from the trust or will?

Cheers!

Unless you have a serious, serious amount of money, Trusts (with the exception for insurance policies) are waste of time, energy and money. Having been executor for two family members, they just slowed everything down, required way more lawyer time and accomplished nothing more than a well-written will would have...just my life experience. The lawyers tend to be just as old as the person who just died and not always...competent. Financial planners and insurance agents love them, nobody else does.

 

[Badger]

Unless you have a serious, serious amount of money, Trusts (with the exception for insurance policies) are waste of time, energy and money. Having been executor for two family members, they just slowed everything down, required way more lawyer time and accomplished nothing more than a well-written will would have...just my life experience. The lawyers tend to be just as old as the person who just died and not always...competent. Financial planners and insurance agents love them, nobody else does.

I don't think a revocable trust to avoid probate would be a waste of time, energy and money. If it is an Asset Protection Trust they may also safeguard from creditors and suits.

Cheers!

 

[RetMD21]

Now most of our estate will transfer to our heirs via beneficiary designations for financial accounts and/or enhanced life estate deeds for our properties and I presume that it would be harder for someone to make a claim for those than to contest a will.

If the beneficiaries are discrete, others shouldn't even know about those distributions, right?

 

[pb4uski]

I wouldn't think that they would.

 

[JBTX]

Unless you have a serious, serious amount of money, Trusts (with the exception for insurance policies) are waste of time, energy and money. Having been executor for two family members, they just slowed everything down, required way more lawyer time and accomplished nothing more than a well-written will would have...just my life experience. The lawyers tend to be just as old as the person who just died and not always...competent. Financial planners and insurance agents love them, nobody else does.

This is a very generalized argument that I think is mostly inaccurate. It is arguably true that revocable living trusts may be over used, as in many states probate isn’t terribly complicated or expensive (so I hear ) but there are instances where they can be useful for probate avoidance or transfer of asset control when one party becomes incapacitated. As for irrevocable trusts there are instances where it’s unlikely future beneficiaries can be reasonably expected to manage a large sum of money, and could benefit from trust protections from third parties (creditors, spouses, etc). In some states estate taxes at the state level can come in at fairly modest thresholds, and in 2026 federal estate tax reverts to a lower level, if law not renewed. While TOD beneficiary designations can be convenient, there are scenarios where benficiaries pass in an expected order, and beneficiary designations aren’t always as flexible as one would want.

 

[Sunset]

My DM, named my "brother" and specific reason for his exclusion in the Will. He got nothing.

OP - The more investments accounts you assign a POD/TOD beneficiary, the less that is in the estate to be contested and less potential for the money to go to the wrong people.

We have all our bank accounts and brokerage accounts with named beneficiary POD/TOD, so that part of our estate won't be affected by the Will.

 

[OldShooter]

This is a very generalized argument that I think is mostly inaccurate. It is arguably true that revocable living trusts may be over used, as in many states probate isn’t terribly complicated or expensive (so I hear ) but there are instances where they can be useful for probate avoidance or transfer of asset control when one party becomes incapacitated. As for irrevocable trusts there are instances where it’s unlikely future beneficiaries can be reasonably expected to manage a large sum of money, and could benefit from trust protections from third parties (creditors, spouses, etc). In some states estate taxes at the state level can come in at fairly modest thresholds, and in 2026 federal estate tax reverts to a lower level, if law not renewed. While TOD beneficiary designations can be convenient, there are scenarios where benficiaries pass in an expected order, and beneficiary designations aren’t always as flexible as one would want.

+100 No telling why @Imackenzie had unfavorable experiences but that does not lead one to conclude that trusts are a "waste of time." In many circumstances they are not and, in fact, are valuable estate planning tools.

Re lawyers being just as old as the decedent, this is easily remedied. Our estate attorney is easily 20 years younger than we are and our trust protector is at least 10 years younger.

 

[ncbill]

+100 No telling why @Imackenzie had unfavorable experiences but that does not lead one to conclude that trusts are a "waste of time." In many circumstances they are not and, in fact, are valuable estate planning tools.

Re lawyers being just as old as the decedent, this is easily remedied. Our estate attorney is easily 20 years younger than we are and our trust protector is at least 10 years younger.

Maybe he had a problem for complex, irrevocable trusts.

I've found using revocable living trusts to be far easier than probate.

 

[rodi]

My dad disinherited my brother specifically in his trust after they had a major falling out and my brother said some things that couldn't be unsaid. My dad predeceased my brother by 2 months.

My dad's trust was originally an a/b trust - and my mom had died 5 years earlier. So my brother did inherit from my mom's irrevocable side of the trust. But he received nothing from my dad's side.

He was specifically named in the trust as receiving nothing. No small payment, just a specific mention as being intentionally disinherited.

 

[imnontrad]

Listen to the podcast "Big Picture retirement" and the advise by estate planning lawyer John Ross. He gives some tips on things to include in a will to make it more flexible.
Like -
What happens if one of your heirs becomes disabled between the time you write the will and they inherit?
Or what if an heir has a gambling, drug, etc addiction?
Or what if you dies and your spouse becomes disabled?
What if your Executor declines or dies before you do?
If donating to charities, what funds should be used for that to be able to avoid taxes?

Also, if you have trusts, Transfer upon Death, etc. for your assets, make sure to leave enough to cover your final expenses and executer costs.

 

[Al in Ohio]

I've heard of several cases where the disliked relative was specifically named in the will for a bequest of something like one dollar. That was to preclude any claim that they were "inadvertently forgotten" in the will.

Yes exactly that.

 

[JBTX]

+100 No telling why @Imackenzie had unfavorable experiences but that does not lead one to conclude that trusts are a "waste of time." In many circumstances they are not and, in fact, are valuable estate planning tools.

Re lawyers being just as old as the decedent, this is easily remedied. Our estate attorney is easily 20 years younger than we are and our trust protector is at least 10 years younger.

Just like many professions there is a wide variety of skill sets of estate planning attorneys. 20 years ago we found one through a friend, who he found via a neighborhood presentation. He is also a tax attorney, and also tried his hand as a CFP which he eventually gave up. I didn’t know a lot, and what he created was good enough. As I learned more later and life and our situation evolved with special needs kids, and I learned more - mainly from Bogleheads, on the difference between conduit and accumulation trusts, then the secure act came along, it became obvious we needed an upgrade. Our attorney was not terribly versed in accumulation trusts, and was honest about it. There are various questions you can ask to get a feel for the expertise of the estate planner, and one of them is to ask their experience in writing accumulation trusts and how many they have done. That will weed out a lot. Eventually we found someone who fit our needs, and ironically the revised trusts accomplish what we want and are significantly simpler in terms of number of pages, as the prior attorney had lots of boiler plate stuff that was really unnecessary.

Our situation is unique but I absolutely would not leave 7 figures to either of our young adult children, probably for the rest of their lives. We opted in the revised trust to use a corporate trustee because the issues were probably too burdensome to expect a competent relative to have to manage. For one child the future trust is set up to be a supplemental needs trust in case government benefits are involved - actually it is set up that way for both.

 

[indiajust]

Sounds like your situation calls for more spending now... on yourself and charity transfers via BTD, as well as annual gifting fast and furious.

No need to plan for estate plan if the pot is empty!