Estate Planning Seminar

[PatrickA5]

At this point in our lives, we just have Wills - but, even those won't be necessary unless something changes. Everything is POD/TOD (including the house). We'll probably revisit at a later date.

We had everything set up similarly when DF passed away. Everything POD (including house) except for small joint account (with me as a joint owner) that I used for a few months to pay the final bills. Worked out fine. This might not work out so well in many families, so YMMV.

 

[CardsFan]

At this point in our lives, we just have Wills - but, even those won't be necessary unless something changes. Everything is POD/TOD (including the house). We'll probably revisit at a later date.

Same here. With only one heir (DS) it should be simple. The only things that will fall under the will are household possessions (even the cars can be TOD in MO.)

That said, I do have some old e bonds that I need to dispose of. I have heard they can be a pain to get changed, and the value is less than $12,000.

 

[PatrickA5]

Same here. With only one heir (DS) it should be simple. The only things that will fall under the will are household possessions (even the cars can be TOD in MO.)

That said, I do have some old e bonds that I need to dispose of. I have heard they can be a pain to get changed, and the value is less than $12,000.

As far as the household goods, if there is just one heir then I don't think there is any reason to probate a will just so the heir can keep/discard the stuff. At least that's what my lawyer said when I brought it up after my DF's death. My brother and I just got together and split the decent stuff and trashed the rest.

My DF had about 50 old EEbonds. I sent them to the Treasury and had my name put on them as co-owner. It took a couple of months before I got them back. Ended up not being necessary as they all matured (and redeemed) before he passed.

 

[meleana]

You should be consulting with an estate planning atty , who perhaps also works with a CPA, who can walk you through options.

 

[2177V]

Poor man’s living trust in California: (1) change the title of a house to a “lady bird deed” which designate a beneficiary. The title transfer is outside of California probate court. (2) set up your bank accounts to numerous POD or payable on death accounts for each heir. POD accounts designate a beneficiary which are also outside of probate. (3) add a beneficiary to pink slip of a car as a TOD or transfer upon Death. You can look up lady bird deed and DMV TOD pink slip ownership on the internet. (4) any assets not listed above that is less than $25,000 can be settled without California Probate Court. Note that I state “California”. Each state has their own probate laws. I recommend reading the Probate regulations in your state. If you do not understand these state regulations then you have to hire an attorney. The name of the game is to avoid a dispute among your heirs and to avoid Probate Court which can eat into the estate assets because attorneys are like sharks.

 

[vdesalvo]

After reading this thread about all the different between states. Sounds like the best options is to move to a state that more estate friendly and estate tax free.

 

[Dash man]

After reading this thread about all the different between states. Sounds like the best options is to move to a state that more estate friendly and estate tax free.

PA has a nasty inheritance tax, but is income tax friendly to retirees. Pay now or pay later. I’ll let my kids worry about the inheritance tax.

 

[OldShooter]

Poor man’s living trust in California: (1) change the title of a house to a “lady bird deed” which designate a beneficiary. The title transfer is outside of California probate court. (2) set up your bank accounts to numerous POD or payable on death accounts for each heir. POD accounts designate a beneficiary which are also outside of probate. (3) add a beneficiary to pink slip of a car as a TOD or transfer upon Death. You can look up lady bird deed and DMV TOD pink slip ownership on the internet. (4) any assets not listed above that is less than $25,000 can be settled without California Probate Court. ...

An approach like this requires more maintenance than a will. Any changes with the beneficiaries, marriages, divorces, death, children attaining adulthood, etc must be dealt with wherever they are named and must be dealt with in a timely fashion. Most of these events can be anticipated and dealt with by the more complicated language in a will. Not all, of course.

 

[Koolau]

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

While that sounds obvious, practically, it's maybe not that simple. Think of things you really enjoy - maybe cars. Do you get rid of them now so that they won't be an issue when you die? I think not. What about your collection of firearms? Do you get rid of them now or let them be handled in your estate? These and other relatively valuable possessions will eventually pass to other people to deal with. In our case, we have "possessions" with significant value in more than one state.

Also, we'd like our "possessions's" value to be added to our estate - not be passed down. The bulk of our estate will go to charities. I'd like to deal with a law firm that understands our thinking - not offer us a cookie-cutter trust. YMMV

 

[RunningBum]

After reading this thread about all the different between states. Sounds like the best options is to move to a state that more estate friendly and estate tax free.

That's a classic case of letting the tax tail wag the dog. I'm going to live where I want to live, including all factors. Most of the factors are quality of life things. State income tax is a factor because it affects how much spendable money I have. Estate tax doesn't affect me at all, just my heirs. While I'd like to optimize my estate to leave them the most, I'm not going to uproot myself just to help them out.

At best it could be a tie breaker for where to live if all other factors are even.

 

[OldShooter]

While that sounds obvious, practically, it's maybe not that simple. Think of things you really enjoy - maybe cars. Do you get rid of them now so that they won't be an issue when you die? I think not. What about your collection of firearms? Do you get rid of them now or let them be handled in your estate? These and other relatively valuable possessions will eventually pass to other people to deal with. In our case, we have "possessions" with significant value in more than one state. ...

Not trying to provoke an argument here. The real world is probably a compromise. For example, I just sold about $10,000 worth of high-end target pistols. Lovely devices to own, but very specialized and not something our executor would have been able to get full value when selling. A couple of pistols and a couple of long guns still in the safe are more pedestrian devices and she should be able to get reasonable value from them. The last target pistol, a .22, I just don't want to part with so I will do what I can to point her in the right direction to get the $2K+ value for it.

I think the poster child for this issue is investment real estate. Leaving owner-managed property in an estate, especially with an amateur executor may be problematic. If the basis step-up is important, maybe a 1031 exchange for a piece of a professionally managed deal would lighten the load.

 

[RunningBum]

I agree that one should consider disposing of some of those collectables. Of course if you are still enjoying them you should keep them, but maybe paring down a collection and will make keeping and maintaining the most favored items easier and more enjoyable.

As an example, my BIL has a large collection of sports, music and book memorabilia. He said he hoped that I and my brother will help my sister sell them when he goes. He is more than 20 years older, btw. I just kind of nodded but as I think about it, I don't sell on ebay and I don't know how to find a buyer for much of that stuff. Nor do I know how to figure out the value of some of the obscure stuff. I never said anything more, but my sister brought it up to me last month. She wants to move, so she wants him to start selling off at least some of that stuff. I gave my full support!

I've been organizing my sports card collection over the last few years. Mostly it's to display my favorite cards better, but I've also done it and documented it in a way to make it easier for my son to know what has value and what really doesn't. I gave a couple options on who to sell to and what to look for if those are no longer in business when the time comes. It's not a big deal anyway, the whole collection is probably less than $10K, but it's something. I have actually tossed some duplicates from more recent sets that have no value. That was hard for me to do, but liberating.

 

[calmloki]

After reading this thread about all the different between states. Sounds like the best options is to move to a state that more estate friendly and estate tax free.

Which is what we are doing. In our case we are snowbirds, going between Oregon and SoCal, so a change of primary residence is pretty minor - we spend close to 6 months in each location and changing Primary is a matter of a couple weeks extra stay, changing voter registration, driver's licenses and using different home addresses for our banks. Same health insurer both places.

I mostly agree with RunningBum - don't let the tax tail wag the life dog. In our case a fairly minimal change can result in a large benefit to our heirs.
Which ties neatly with Oldshooter's comment on rental real estate - we've been divesting of our Oregon rentals for several reasons - don't want to saddle heirs with being rental managers and doing a good job so they don't make tenant lives problematic, and getting more of our taxable estate out of Oregon to avoid extra estate taxes there. We are giving up substantial income doing that, as well as stepped up basis, but cash is so much easier to divvy up and inherit.

 

[Koolau]

I'll admit to at least some level of personal inertia. I hate the thought of "dealing with divesting" our stuff. Still, I'm not ready to part with everything JUST to make that final transition a bit smoother for the "executor" or whatever it's called if we choose to set up a trust. (By the way, how DOES an executor sell an antique Tiffany Style lamp that DW will NOT sell - especially when it is in the old "homestead" 5000 miles away?) "Simple" issues like that are what I'm looking at. I suppose I could simply say "When I'm dead - who cares?"

I agree with living where you want for the reasons you want and let the taxes fall where they may. Our taxes happen to be MUCH lower than we guessed upon moving to the state we adopted as home. Always better to be lucky than good but YMMV.

 

[OldShooter]

... (By the way, how DOES an executor sell an antique Tiffany Style lamp that DW will NOT sell - especially when it is in the old "homestead" 5000 miles away?) ...

There are firm that do that kind of thing both for whole estates and for special items/antiques. Professional trust administrators and professional executors routinely use them. DW is not here right now, so I can't ask about a lamp 5,000 miles away but if that is still in the US she would probably contact trust people within her megabank who were local to the item.

The issue is not getting things sold. That is easy. The issue is to get fair value. Can you convince your DW to have the lamp shipped to you and held in your home? Maybe even identify or pre-sell to an antique dealer who should be contacted? That will make it easier for the executor.

 

[mickeyd]

Enjoy the seminar and free meal (if offered) BUT...don't drink the kool-aid!!

 

[Koolau]

There are firm that do that kind of thing both for whole estates and for special items/antiques. Professional trust administrators and professional executors routinely use them. DW is not here right now, so I can't ask about a lamp 5,000 miles away but if that is still in the US she would probably contact trust people within her megabank who were local to the item.

The issue is not getting things sold. That is easy. The issue is to get fair value. Can you convince your DW to have the lamp shipped to you and held in your home? Maybe even identify or pre-sell to an antique dealer who should be contacted? That will make it easier for the executor.

You are, of course, correct about the best way to "deal" with such an item. IOW deal with it before death. But DW still loves the thing and it is located in the old homestead which we visit in summer. One guy was looking through some other stuff - not the lamp. Vases, chairs, nicknacks, (semi-antique and certainly collectible). The guy noticed the lamp and offered DW 50 bucks for it! ChaCHING! No sale!

She's spent no more time researching it though I think it may be relatively unusual and somewhat valuable. I guess the trick might be to set up the estate documents such that the executor would know to have an appropriate person evaluate and price such items upon death.

Actually, I only mentioned the one piece as there are other items of "value" which are not antique but could easily be mis-priced. It's the curse of a collector to wonder how one's carefully gathered, nourished and cared-for items will be disposed of. Once again, perhaps it's better not to speculate. MIL would have had a fit had she been aware of how HER things were disposed of upon her death (we had nothing to do with it - BIL handled all of it.)

 

[SecondAttempt]

Your premise, though, is that an amateur executor is facing these tasks without professional advice, lawyer or CPA. ... In the event that DW dies and I am left, my first call will be to the attorney as well.

I am very self sufficient and often don't seek advice when I should. I prefer to learn and make my own decisions in most situations where others would not blaze their own trail. But there are a few areas where my first call would be to a lawyer including death of a spouse or partner.

And I have a letter prepared to my partner telling her exactly who she needs to call (lawyer) and what to do if I die. It covers everything from what to tell the lawyer to who to contact at my employer (along with their personal cell number) to passwords for my home network and home automation stuff (her brother is an IT guy so he can take care of that stuff). No need to add stress of the network going down and the power getting cut off because my corpse didn't pay the bill or restart the router like it seems to need every few days.

 

[gauss]

She's spent no more time researching it though I think it may be relatively unusual and somewhat valuable. I guess the trick might be to set up the estate documents such that the executor would know to have an appropriate person evaluate and price such items upon death.

Maybe...

However, when my DD died, I thought some of his items would be valuable. US Mint Proof Coin sets going back to the 1960s -- tools, antique furniture etc.

When I looked into selling these items I realized the value was not there. Lots of people inheriting things like this that they don't want these days.

Since I was the executor and beneficiary of his estate I ended up just donating nearly all the items to charity for them to sort out. I was able to take a significant tax deduction, in that I used the TaxAct software's donation assistant to "value" the items.

Granted I didn't need the money that I could have obtained by trying to sell all the stuff. My time was more valuable and the estate also had financial assets and real estate.

This worked for me -- not sure what DD would have thought but that was not the point.

-gauss

 

[2177V]

An approach like this requires more maintenance than a will. Any changes with the beneficiaries, marriages, divorces, death, children attaining adulthood, etc must be dealt with wherever they are named and must be dealt with in a timely fashion. Most of these events can be anticipated and dealt with by the more complicated language in a will. Not all, of course.

The problem with a will: Any will can be contested in Probate court. If all the relatives agree with the will, then everything is fine. However, if there is a dispute, then it has to go to Probate court.

However, a Lady Bird deed, POD accounts and TOD on automobiles generally CANNOT be contested in Probate Court simply because the transfer rules are written down in the California Probate codes that were passed by the state legislators and written into law. The attorneys and court has to follow these rules. Our family did talked to an estate attorney before we divided our Mom's estate according to the Lady Bird deed, POD accounts and TODs and the estate attorney agreed that it does not have to go thru probate.

Granted there is maintenance on revising the Lady Bird Deed, POD and TOD if there are life changes but those changes are fairly easy to do. Our Mom was very wise in consulting an estate attorney before she changed her deed to a Lady Bird deed and her accounts into POD accounts. The end result: The transfer of assets were simple and seamless.

If you only have a will, then there is a risk that the will being contested by various relatives in probate court which means the attorneys on both sides will then eat into that estate and cost the family a bunch of money to settle.

My advice: Talk to an Estate attorney. DIY estate planning is risky. Paying 1 hour of an estate attorney's fee can avoid a lot of problems.

 

[Souschef]

I had set up an A/B trust, and after my wife passed away, it was changed to a QTIP. It was a real PITA to file 1041 and 541 forms every year. As I spent the trust down, there was a provision to dissolve it if the assets fell below a certain amount. I did that in a heartbeat and filed final 1041 and 541 forms.


I since remarried, and set up everything in POD and TOD accounts. But that was not enough. We went to an estate attorney and set up an estate plan with POA's for finances and for health care as well as pour over wills. All this is in a binder.

In the front of the binder is a summary of all our account numbers, with company names, addresses and phone numbers. There is also a list of all our passwords for various websites.

 

[OldShooter]

The problem with a will: Any will can be contested in Probate court.

Google gave me this (https://www.hml-law.net/2021/04/contesting-a-will/#)

"The chances of contesting a will and winning are slim. Research shows that only 0.5% to 3% of wills in the United States undergo contests, with most will contests ending up unsuccessful."
​

and

"In some cases, a testator may include a no-contest clause in their final will. This is an optional clause some will writers may consist of to discourage contests to their will. In such cases, you may be disinherited should your contest end in failure, leaving you with nothing from the will."
​

Not something I will lose sleep over. But this is the important statement:

My advice: Talk to an Estate attorney. DIY estate planning is risky. Paying 1 hour of an estate attorney's fee can avoid a lot of problems.