Estate Planning Seminar

[Sunset]

From experience of being executor of an estate, having all the accounts, annuities, property, etc set to TOD/POD is great, as long as 1 bank account that pays the bills regularly (checking account) is not set as TOD/POD.

This allows the executor to pay bills, cash checks, etc for the estate/deceased. Then distribute the remaining after the tax return is completed (and refund paid).

It was just luck for us, but has worked out well. Bulk of estate is distributed quick and easy, and the checking account handles the bills and will be distributed next year.

Had everything been a TOD/POD it would be awkward trying to get the beneficiaries to pay for various bills.

 

[RunningBum]

It is more a function of what assets you have. I our case, other than the house, everything is in an account. Each account is a TOD (transfer on death) to the beneficiaries and to successor beneficiaries.

That's what I've done. Cheaper than a trust, and in most accounts, I can quickly and easily change it online. My state even allows the house to have a TOD, though I had to go down to the county courthouse to file it, so it's not quite as easy to change, but I don't have plans for that. I did discuss this with an estate attorney, and she grudgingly admitted this was sufficient for me in my current situation. I'm not in PA, so I don't run into Dash man's issue.

I like the ability to change, because I have most going to my son, but not all. My IRAs go to him so there's only one person who has to deal with those rules, and I can "rebalance" the taxable account TOD to make sure it's in the range I want to give him and other.

The downside to that is that if I start to lose my mental facilities, it would be that easy for someone to con me into changing it to them. I don't have a ready solution to that.

 

[SecondCor521]

From experience of being executor of an estate, having all the accounts, annuities, property, etc set to TOD/POD is great, as long as 1 bank account that pays the bills regularly (checking account) is not set as TOD/POD.

This allows the executor to pay bills, cash checks, etc for the estate/deceased. Then distribute the remaining after the tax return is completed (and refund paid).

It was just luck for us, but has worked out well. Bulk of estate is distributed quick and easy, and the checking account handles the bills and will be distributed next year.

Had everything been a TOD/POD it would be awkward trying to get the beneficiaries to pay for various bills.

My hope is that the checking account with POD can be left open, pay bills and accept refunds for a while, then be distributed to beneficiaries later when it's quiescent.

I need to check with the bank to see if they can convert it over to an estate account or if they'll just be willing to leave it open for a while for various bills and credits.

 

[street]

This will be a start to learn for me to ask a few question. My land is something I want to hand down and it needs to be done right and as simple as it can be.

 

[jazz4cash]

This subject is important to me. We've been to several seminars and we DO think we need a living trust (or whatever it's called). We went to a lawyer who offered a "package" deal, but there were just too many questions and they didn't seem interested in helping us find the answers. They made it seem like "one size fits all" but it doesn't. Biggest issue for me is how to find someone to manage the trust as WE WANT after the second one dies. The law office said "Well just choose your most responsible child." That's when we knew we were in trouble. YMMV

I can’t say for sure because I decided I didn’t need a trust and my sibling who probably does need one won’t pay to set it up. They quoted about $3k. I did learn quite a bit though from the seminars and the book. It occurred to me that the successor trustee is likely to need help from the attorney that set up the trust….another expense for the estate. One of the seminar attorneys claimed to provide some group and individual support to trustees at no charge. It was said that the biggest issue is that grantors set up the trust but never get around to funding (e.g. real estate has to be returned in the name of the trust). One guy says their service includes returning one property. Additional properties are extra and out of state is extra also.

 

[ExFlyBoy5]

So has anyone found an Estate Planning attorney that doesn't just use software to spit out a huge document with tons of unrelated stuff to pad it and make it look impressive?

If so, how do you find these? The one my FIL/MIL used couldn't even explain the docs he himself delivered (he didn't write them, a computer did) some 25 years earlier. And the new ones had inconsistencies that I had to review with them twice before they changed them, the first time they just told me I was wrong.

I don't have much faith in recommendations from the general public, most don't know what to ask. Unless they are specific that the attorney gave then what they wanted w/o the fluff.

-ERD50

The "padding/fluff" you speak of is usually there because of previous issues or to cover all bases. I won't get into the specifics of estate attorneys, but there are good ones out there and using one is pretty important IMHO.

Malpractice claims are pretty high for estate planning attorneys...this is an indicator that it CAN be a very complicated area of the law. *IF* an attorney is unable to explain the documents that they are presenting, then this is malpractice and SHOULD be reported as such to the respective bar association (or other entity that oversees licensing).

I have a very good friend that has been doing estate planning for well over 25 years and could spend DAYS telling stories of estate planning gone wrong.

 

[RunningBum]

My hope is that the checking account with POD can be left open, pay bills and accept refunds for a while, then be distributed to beneficiaries later when it's quiescent.

I need to check with the bank to see if they can convert it over to an estate account or if they'll just be willing to leave it open for a while for various bills and credits.

Maybe don't have that account set up as POD/TOD?

 

[ExFlyBoy5]

My hope is that the checking account with POD can be left open, pay bills and accept refunds for a while, then be distributed to beneficiaries later when it's quiescent.

I need to check with the bank to see if they can convert it over to an estate account or if they'll just be willing to leave it open for a while for various bills and credits.

NOT LEGAL ADVICE: The bank will most likely NOT do this. If they did, odds are they would be breaking the law. Opening the estate account can be done pretty quick (usually with a death certificate) and the bank can then direct any debits to draw from THAT account. NOT LEGAL ADVICE

 

[CardsFan]

NOT LEGAL ADVICE: The bank will most likely NOT do this. If they did, odds are they would be breaking the law. Opening the estate account can be done pretty quick (usually with a death certificate) and the bank can then direct any debits to draw from THAT account. NOT LEGAL ADVICE

Not LEGAL advice, but good advice.

When DM passed it was pretty simple to open a new account. She had another account, but I am pretty sure we opened a new one for the estate.

 

[Happyras]

So has anyone found an Estate Planning attorney that doesn't just use software to spit out a huge document with tons of unrelated stuff to pad it and make it look impressive?

If so, how do you find these? The one my FIL/MIL used couldn't even explain the docs he himself delivered (he didn't write them, a computer did) some 25 years earlier. And the new ones had inconsistencies that I had to review with them twice before they changed them, the first time they just told me I was wrong.

I don't have much faith in recommendations from the general public, most don't know what to ask. Unless they are specific that the attorney gave then what they wanted w/o the fluff.

-ERD50

Well.....I got a free copy for 30 days of 4Trust and created all of our Estate Planning docs. Yup, legalese requires a lot of boiler plate and fluff, but the software specifically uses your State Tax laws and codes to cite the specific required statements. The software drives questions to get the correct type and nature of the trust and subsequent provisions. The old Clayton provision is a typical one for those with more than the state exemption and it is important that the surviving spouse has freedom to use assets as outlined in the specific subsequent trust structures. This requires a few pages of terms. Whether or not you enable an IRA beneficiary trust is one of your decisions, something to consider with current tax laws. We are considering the benefits of an Intentionally Defective Grantor Trust now, which could help with the horrible state death taxes here in WA.

My friends who are lawyers typically use the firms software AND folks who can understand it to create their trusts/wills. It can be very specific when you reside in states like WA and OR.

To the point, it may take a bit of paper to create something to preserve wealth. A simple trust will lead possibly to missed estate tax avoidance.

 

[Happyras]

Nice example of Clayton provision;
https://www.rcalaw.com/webfiles/Clayton Election.pdf

 

[athena53]

The "padding/fluff" you speak of is usually there because of previous issues or to cover all bases. I won't get into the specifics of estate attorneys, but there are good ones out there and using one is pretty important IMHO.
<snip>

I have a very good friend that has been doing estate planning for well over 25 years and could spend DAYS telling stories of estate planning gone wrong.

I created a Revocable Trust when I was married to DH and did new documents after he died. I'm still not sure a trust is worth the trouble but I have one. By the time I created the new one the previous attorney had retired but I was impressed with the questions both asked, clearly based on horror stories they'd encountered. (First attorney told me a couple with no personally identifiable details.)

 

[ERD50]

The "padding/fluff" you speak of is usually there because of previous issues or to cover all bases. I won't get into the specifics of estate attorneys, but there are good ones out there and using one is pretty important IMHO.

Malpractice claims are pretty high for estate planning attorneys...this is an indicator that it CAN be a very complicated area of the law. *IF* an attorney is unable to explain the documents that they are presenting, then this is malpractice and SHOULD be reported as such to the respective bar association (or other entity that oversees licensing).

I have a very good friend that has been doing estate planning for well over 25 years and could spend DAYS telling stories of estate planning gone wrong.

I understand there can be a lot of ifs/ands/or/buts, and those need to be covered.

I'm talking about pages that go into esoteric details on what the successor trustees can do. It spells out that they can use options, and a whole list of complex financial instruments. The successor trustees don't know anything about options, margin or these other instruments. It should all fit under the "reasonable man" principle, just invest the money conservatively and keep it diversified. There was even a couple pages about being allowed to set up some sort of Conservation District Investment or something? Like normal people are going to do that? They just want to settle the estate, or provide for the trustee if they become unable.

It becomes like the product warnings now that are 3 pages long - filled with things like "don't use this toaster in the bathtub". So much fluff that the meat gets lost.

-ERD50

 

[Koolau]

In my travels through this subject, I did decide one thing. I want a significant sized law firm to be involved. We went to one seminar where the lawyer making the presentation seemed quite knowledgeable but he was the only actual lawyer in the firm (a few paralegals and a clerk, perhaps.) I realize a "big" firm may not give as personal service, but with only one lawyer, it's possible your situation would just end up in a file cabinet in a storage locker. YMMV

 

[SecondCor521]

Maybe don't have that account set up as POD/TOD?

Could do that, but then it becomes a probate item. I'm hoping for small estate summary process, and there are asset limits to that.

NOT LEGAL ADVICE: The bank will most likely NOT do this. If they did, odds are they would be breaking the law. Opening the estate account can be done pretty quick (usually with a death certificate) and the bank can then direct any debits to draw from THAT account. NOT LEGAL ADVICE

Was hoping to keep it simple, and had read somewhere before that banks could just roll the account over and make it an estate account.

Interestingly, the same bank left a joint account open for over a year after one of the joint owners died, so maybe things are more flexible/practical around here.

Not challenging, just curious - what sorts of laws would be broken? Assuming the debits and credits were all ordinary and legitimate (like Social Security, cable bills, etc. of the decedent).

 

[Sunset]

Could do that, but then it becomes a probate item. I'm hoping for small estate summary process, and there are asset limits to that.

What is the limit of assets to fall under the small estate in your State ?
Here in IL it's 100K, so it's pretty easy to have a sizable checking account under the limit, and no POD/TOD means it goes to the estate for the executor to deal with (pay bills, debts, etc).

Was hoping to keep it simple, and had read somewhere before that banks could just roll the account over and make it an estate account.

Interestingly, the same bank left a joint account open for over a year after one of the joint owners died, so maybe things are more flexible/practical around here.

Not challenging, just curious - what sorts of laws would be broken? Assuming the debits and credits were all ordinary and legitimate (like Social Security, cable bills, etc. of the decedent).

Issue is any POD asset can be claimed by any of the heirs , just show up at the bank with a death certificate and ID.
Executor doesn't even have to be told.

A joint account, of course would stay open assuming 1 of the people on the account is alive, quite a different situation.

 

[SecondCor521]

What is the limit of assets to fall under the small estate in your State ?
Here in IL it's 100K, so it's pretty easy to have a sizable checking account under the limit, and no POD/TOD means it goes to the estate for the executor to deal with (pay bills, debts, etc).

Also $100K here, so it probably wouldn't be an issue.

In this case, cash flow for the executor and other heirs won't be an issue. There will be few, if any debts, except medical which I am figuring can wait a month or two to get paid.

Honestly at this point the account already has POD on it, and I'm just being lazy enough to not remove it.

Issue is any POD asset can be claimed by any of the heirs , just show up at the bank with a death certificate and ID.
Executor doesn't even have to be told.

A joint account, of course would stay open assuming 1 of the people on the account is alive, quite a different situation.

Yeah, I understand your point. In this case, there are only three people on the POD and all would be cooperative. No joint owner.

 

[OldShooter]

... I'm talking about pages that go into esoteric details on what the successor trustees can do. It spells out that they can use options, and a whole list of complex financial instruments. The successor trustees don't know anything about options, margin or these other instruments. It should all fit under the "reasonable man" principle, just invest the money conservatively and keep it diversified. There was even a couple pages about being allowed to set up some sort of Conservation District Investment or something? Like normal people are going to do that? They just want to settle the estate, or provide for the trustee if they become unable. ...

Well, at worst that boilerplate is harmless and near zero cost. At best is it something that the grantor(s) specifically wanted. If you do a trust, you can include or omit this type of thing as you like. The prudent man rule that applies to fiduciaries and some kind of HEMS (https://unsworthlaplante.com/blog/general/hems-standards-estate-planning/) clause probably get most of the hard work done. More specitivity than that might help a family member trustee stay on good terms with the other beneficiaries, but it has its own risks.

 

[gauss]

OP, One thing that you might want to do in order to prepare for the seminar is to review your states laws on intestacy. That is to say, who will inherit your assets that you own in your own name if you do not have a will. Sometimes it goes 1) spouse 2)children 3)parents 4)siblings etc... In general it can vary state by state.

Knowing this, you will know what happens if you die with absolutely no estate plan. It might help put things into context on how badly you need an estate plan.

-gauss

 

[ERD50]

Well, at worst that boilerplate is harmless and near zero cost. At best is it something that the grantor(s) specifically wanted. If you do a trust, you can include or omit this type of thing as you like. The prudent man rule that applies to fiduciaries and some kind of HEMS (https://unsworthlaplante.com/blog/general/hems-standards-estate-planning/) clause probably get most of the hard work done. More specitivity than that might help a family member trustee stay on good terms with the other beneficiaries, but it has its own risks.

I kinda disagree that the fluff boilerplate is harmless.

When it comes time for the successor trustee/s (often family, often not in the legal or financial professions) to deal with this, they already have their hands full and are grieving, maybe not thinking 100% straight. All this extra stuff just adds to the overwhelming feeling. They get this big book laid on them, and think OMG, where do I start? The fluff isn't helping them, and they need help at this time. Not some dazzle that the estate lawyer added to impress the clients with oh how smart he must be.

Yes, people can include or omit this type of thing as they like - but most of them have no idea what is needed or not - that's why they went to a professional.

-ERD50

 

[SecondAttempt]

About 15 years ago my (now ex) wife and I had a complete estate plan drawn up and it was about $1000 I think. It was done by an attorney who specialized is estates. He met with us, listened to our specific situation and concerns, drew up the documents, and handled all of the retitling and other administrative details of funding the trust. Our documents included 2 wills, a living trust, a couple of different powers-of-attorney for each of us. They were obviously based on templates/boilerplate but had to be customized for our specific situation. Our situation was pretty simple, no kids for example. I was very happy with the attorney and the work product.

Even though I had read a lot on trusts and estates and had even taken paralegal courses on trusts, estates, and probate, I learned a lot going through the process and asked the attorney lots of questions when there was something I did not understand.

Now that I am divorced I will be having a new estate plan done but have been putting it off. (I wish I could blame covid but I can't.) I have already selected an attorney and will be setting up the appointment this week.

I agree with what has been said here. The seminar is probably a marketing thing for the presenter's legal services. I'm also sure there will be a pitch to include the foundation in your will. But that's ok. Attend, learn, ask lots of questions, then make you own decisions. Don't let yourself be bullied. It sounds like you already are considering including the foundation anyway.

An estate plan is too important to get wrong. So even though my own was fairly cheap, it was not price that influenced us. The attorney was recommended by people we trusted. I have been wrestling with the big firm vs small firm decision. I see benefits and pitfalls with both.

I also find myself at a quandry over whether to name my partner as my executor. She will definitely be my beneficiary but I worry that she will not deal well with the stress of making all kinds of decisions when also grieving. She also has little interest in finances. My thinking is to make her executor but also appoint a lawyer to advise her.

I personally do not want to use a bank as a trustee because I don't have a high degree of trust in banks mostly regarding fees. But I recognize that may be my best option.

Quite frankly, when I went through the process 15 years ago it seemed somewhat abstract. I did not expect to be dead any time soon. I still don't. I am pretty healthy for the most part. But if I live another 25 years I will have lived longer than almost all family members. I've also had way too many friends and colleagues die in their 60s or even 50s to get too unrealistic about my own longevity.

I hope you post a follow up regarding your thoughts on the seminar!

 

[Koolau]

About 15 years ago my (now ex) wife and I had a complete estate plan drawn up and it was about $1000 I think. It was done by an attorney who specialized is estates. He met with us, listened to our specific situation and concerns, drew up the documents, and handled all of the retitling and other administrative details of funding the trust. Our documents included 2 wills, a living trust, a couple of different powers-of-attorney for each of us. They were obviously based on templates/boilerplate but had to be customized for our specific situation. Our situation was pretty simple, no kids for example. I was very happy with the attorney and the work product.

Even though I had read a lot on trusts and estates and had even taken paralegal courses on trusts, estates, and probate, I learned a lot going through the process and asked the attorney lots of questions when there was something I did not understand.

Now that I am divorced I will be having a new estate plan done but have been putting it off. (I wish I could blame covid but I can't.) I have already selected an attorney and will be setting up the appointment this week.

I agree with what has been said here. The seminar is probably a marketing thing for the presenter's legal services. I'm also sure there will be a pitch to include the foundation in your will. But that's ok. Attend, learn, ask lots of questions, then make you own decisions. Don't let yourself be bullied. It sounds like you already are considering including the foundation anyway.

An estate plan is too important to get wrong. So even though my own was fairly cheap, it was not price that influenced us. The attorney was recommended by people we trusted. I have been wrestling with the big firm vs small firm decision. I see benefits and pitfalls with both.

I also find myself at a quandry over whether to name my partner as my executor. She will definitely be my beneficiary but I worry that she will not deal well with the stress of making all kinds of decisions when also grieving. She also has little interest in finances. My thinking is to make her executor but also appoint a lawyer to advise her.

I personally do not want to use a bank as a trustee because I don't have a high degree of trust in banks mostly regarding fees. But I recognize that may be my best option.

Quite frankly, when I went through the process 15 years ago it seemed somewhat abstract. I did not expect to be dead any time soon. I still don't. I am pretty healthy for the most part. But if I live another 25 years I will have lived longer than almost all family members. I've also had way too many friends and colleagues die in their 60s or even 50s to get too unrealistic about my own longevity.

I hope you post a follow up regarding your thoughts on the seminar!

Wow, I think the law firm we were considering (after attending their seminar) was more like $4k! That didn't bother me so much as their inability to deal with my special concerns (some "stuff" in another state for instance and especially how to choose someone who would carry out our wishes after the second person passed.) YMMV

 

[OldShooter]

... When it comes time for the successor trustee/s (often family, often not in the legal or financial professions) to deal with this, they already have their hands full and are grieving, maybe not thinking 100% straight. All this extra stuff just adds to the overwhelming feeling. They get this big book laid on them, and think OMG, where do I start? The fluff isn't helping them, and they need help at this time. Not some dazzle that the estate lawyer added to impress the clients with oh how smart he must be. ...

Not an unreasonable concern. Your premise, though, is that an amateur executor is facing these tasks without professional advice, lawyer or CPA. That's probably not a good idea, regardless of the fluff-or-meat question.

In our case, our attorney is our executor. She is quite a bit younger than we are and, in the event of her inability, there is a second attorney in the firm who is also familiar with us. Third backup is the firm itself. In the event of our deaths, our son and our trust protector both have instructions to contact the attorney immediately. In the event that DW dies and I am left, my first call will be to the attorney as well.

 

[Koolau]

Not an unreasonable concern. Your premise, though, is that an amateur executor is facing these tasks without professional advice, lawyer or CPA. That's probably not a good idea, regardless of the fluff-or-meat question.

In our case, our attorney is our executor. She is quite a bit younger than we are and, in the event of her inability, there is a second attorney in the firm who is also familiar with us. Third backup is the firm itself. In the event of our deaths, our son and our trust protector both have instructions to contact the attorney immediately. In the event that DW dies and I am left, my first call will be to the attorney as well.

The reason I don't want a bank involved is I see how a company mistreated the kids and their grandparents - taking 4% per year to manage the trust until they were of age. I don't want a trust company OR a lawyer doing that. Reasonable fees would be okay, but NOT a blanket % for the privilege of working for me. We don't have a trust, but plan for it to be simple as: This % to that charity and this amount to each kid. Getting rid of "stuff" to get to the final "pot" of money may be an issue. I'm struggling at this point. YMMV

 

[OldShooter]

The reason I don't want a bank involved is I see how a company mistreated the kids and their grandparents - taking 4% per year to manage the trust until they were of age. I don't want a trust company OR a lawyer doing that. Reasonable fees would be okay, but NOT a blanket % for the privilege of working for me.

One anecdote is probably not a good basis for sweeping conclusions. IIRC DW's megbank charged something like 1.5%. IIRC Schwab Trust's fee proposal to us was something like 70bps. YMMV in both cases but the lesson from the anecdote is to shop the business just like you'd shop for anything else.

We don't have a trust, but plan for it to be simple as: This % to that charity and this amount to each kid. Getting rid of "stuff" to get to the final "pot" of money may be an issue.

That sounds like an estate, not a trust. In our case our plan creates several trusts. Ones funded with IRAs will terminate after 10 years or when the money goes to zero. The one special needs trust is funded with Roth money and it will continue ideally for the life of the beneficiary. But from what you say you have none of that complexity.

Maybe if there are illiquid assets you should sell them to the maximum extent possible and bequeath simpler assets.