Estate Planning. Where to Start?

[MichaelB]

FIREd, you both are still young. You have a long life ahead and many things can change, including your relationships and life views. How likely is it that either of you might want to change your beneficiaries and distributions of assets?

You already have a will making program and prepared a draft will. Why not hire a trust attorney to prepare a will, then compare the two? Discuss the differences with the attorney, and see how difficult it will be to make changes to each.

 

[FIREd]

Thanks for all the replies.

You have given me a lot to think about like who to choose as an executor. In our homemade draft will, we had chosen a family member as executor. But after reading on this forum some of the difficulties faced by executors (including dealing with rapacious family members), I do not think we should bestow that "honor" on anyone we love. So I think we now would prefer to outsource the task to a professional. Then, we also have to decide what to do with the money. In our draft will, we had the money going to our donor-advised charitable fund (a successor advisor has already been named). But after reading recent posts on the subject, I am now thinking that bypassing the DAF and distributing the money immediately to the charities of our choice is a better option.

As far as the healthcare area is concerned, we already had the opportunity to think about our wishes when we were using the will making program. But this is another area where I want to make absolutely sure that the final documents truly represent my wishes.

Thankfully, a long-time ER.org member has given me a lead on a local, and reputable estate attorney.

 

[Meadbh]

Excellent! Sounds like you are on the right track, FIREd.

 

[FIREd]

FIREd, you both are still young. You have a long life ahead and many things can change, including your relationships and life views. How likely is it that either of you might want to change your beneficiaries and distributions of assets?

You already have a will making program and prepared a draft will. Why not hire a trust attorney to prepare a will, then compare the two? Discuss the differences with the attorney, and see how difficult it will be to make changes to each.

A lot can change for sure. A simple move out of state would force a rewrite of the wills. That's part of the reason why I balk at the cost of hiring an attorney. If we have to modify our estate documents every few years, it becomes a non-trivial cost. But, at this time, I feel like some hand holding is necessary because I have had no exposure at all to estate law in this state - or this country for that matter. Just like I used a CPA for a few years to learn about the tax code and how to do my own tax return, I feel like I should use an attorney to learn about the intricacies of estate planning so that perhaps I will feel more comfortable in the future using will making programs.

 

[rodi]

FIREd - glad to hear you have a good lead on an estate attorney.
Make sure you mention that the property owned by you, out of country, is excluded from the will. As others have mentioned, specifically mentioning a person in a will or trust, when you are excluding them, makes it more binding. My dad did this with my brother. (He still inherited from my mom's half of the bypass trust).

And I agree that choosing an executor and a HCPOA person is important. My sister had HCPOA for my brother, and despite disagreeing with his wishes she followed them explicitly. (He wanted EVERY measure taken, no matter that quality of life... so he ended up with 8 surgeries in his last 4 weeks of life, despite a very much terminal dx.) She was also executor for my parents - and even though she disagreed with the treatment of my brother, she honored it. You need someone with spine to be executor and HCPOA.

 

[Walt34]

Glad to hear that you're going to see an estate attorney. My view is that state laws vary widely enough that it is very risky to use software or online forms unless, perhaps, one's estate is very simple. But I do know that if you and your wife die without a will her sister will get some part of the estate because she is a direct relative. The state will decide who gets what and how much if you don't in a will.

We just went through the process of having a new will, powers of attorney, health care directives, and funeral wishes written up. The cost was $800 but ours isn't that complex and we live in a generally low cost area. Since this is an expense that we'll do perhaps maybe once more if things change I don't regard it as significant.

 

[imoldernu]

Time is money...and the time spent with an attorney can be expensive.
My thinking is that an inexpensive or free program for making your own will, should be the first step. It's where you learn definitions and options and all by itself, to complete can take several hours.
A starting point that will save much time of explaining, and may very well offer some options that a standard estate lawyer might skip.

Other parts of this, that need not be done in a lawyers office, are the DNR and other life decisions, and a full listing of assets to be included in a trust.

Our initial foray into this was an eye opener. Inclusions, exclusions and the decision as to whom to appoint as executor are some things that we spent a lot of time deciding... ending up far apart from our initial expectations after digging into the requirements.

We are quite familiar with situations where persons trusted in a lawyer, only to find out that they never really understood the implications of their decision.

So... while I agree that a lawyer must be used to draft a valid will or trust, it will be very helpful to go through the planning, bit by bit, to truly understand the specifics. In the long run, it may not save any money, but will give peace of mind.

By means of explanation, I cite a case where the will was drawn up by a well regarded attorney, based on trust. Because of some simple misunderstandings, the will was held up for two+ years... during a time when interest rates were very high... 10%+ , the funds were frozen in a bank, at a legal interest rate or 2%.

 

[freebird5825]

I have several "evil" siblings. True colors showed when my Mom passed over a decade ago. I was Alternate Executor and had to fire a shot over the bow to make things go exactly according to the Will. Enough said.

I am also childless, and have a very "evil" sister who can be counted on to challenge any Will. A few of the other siblings might do same. I don't want my beneficiaries, especially Mr B, to have to deal with any of that.

So I went with a Revocable Trust, prepared by an estate attorney, based on my inputs. No matter what, my Trust and Pour-Over Will, HCP, Living Will, Disposition of Remains, etc, will withstand any frivolous challenge or interference.

My estate attorney is my Executor and has PoA which kicks in ONLY in the case of my incapacity. It was the best choice for my own personal situation. Professionals cannot get away with the type of nonsense that family or friends may or may not attempt. The oversight and regulatory situation for estates in NY is pretty tight. The potential loss of license and bad PR just are not worth it for an attorney to try to "cheat" an estate.

 

[Sarah in SC]

Free, the revocable trust is a great idea, especially in your circumstances. So much hassle can be avoided by doing these simple trusts.
For example, I'm helping a nice elderly lady right now, whose husband passed after a long illness. His brokerage was in his name only, with no TOD provision, and Schwab requires that an estate account be opened in order for her to put the assets in her name. This, despite that they live in Washington, and had a document drawn up that indicated that the assets were community property. The para at their lawyer's office was miffed, but that's the rules.
How much easier it would have been to put it in an RLT or done the TOD.

 

[skipro33]

As someone said, time is money, especially with an attorney. However, their fees upfront are very reasonable. Expect to pay around $1,000 for the will the power of atty for financial, power of atty for medical and setting up a trust and moving your assets to the trust.

The REAL money for them is when you die. You see, on every page of your documents will be a water mark with the law firm's name and contact. So you get a will you need to deal with beloved father died. Who better to call than the person who interviewed Dad and wrote the thing? He'll charge a fee to take care of all the details for the bereaved survivors.

Be sure to get abstracts of the documents so you can leave copies with your kids.

Regarding contestation of the will. Mine has it well worded and without ambiguity, that anyone who contests the will is automatically cut from the will and that the express purpose is to leave them nothing. Very few people will contest a will of that nature. Most would rather get what they are getting rather than risk loosing everything. And those how already are not getting anything, the language guarantees they never will either. Because if ANYBODY contests the will, that person gets nothing.

You gotta love a will. you can put what ever your heart's desire into one. Just be sure it says what you mean it to say, hence the interview with an estate attny.

 

[JoeWras]

In our draft will, we had the money going to our donor-advised charitable fund (a successor advisor has already been named). But after reading recent posts on the subject, I am now thinking that bypassing the DAF and distributing the money immediately to the charities of our choice is a better option.

Perhaps.

But does your DAF allow a detailed distribution plan? We use Vanguard Charitable and have it written up pretty clearly. We do not have any successor advisers. Don't want them meddling.

The succession plan is a sort of medium term endowment, doling out the gifts to the charities over time, probably a decade or so, until exhaused. Some of our charities are small and it would be a bad thing for them to get something big at one chunk.

Just a thought. You can go many ways. The nice thing about the DAF is the succession plan can be changed frequently without going through a change in the will. Our lawyer was also very fussy about making sure Vanguard Charitable was named properly and precisely in the will. After that, it is up to our trust in Vanguard Charitable to follow our wishes.

 

[bld999]

I got a bad chill when I read about the woodwork emerging sister. Yikes. You at least need a will!
........
It costs money. So what. We're dead. Professionals will gladly tell the evil sister to pound salt.

LOL, and a sober take on resolution.

My old mother just emerged from duties as personal rep. for her deceased second husband. His family crawled in from somewhere and comported themselves in a way that was unimaginable, greatly exceeding the legends of behavior that proceeded them.

Thank the heavens for seasoned specialist estate attorneys. Without his counsel, the whole family would have exterminated themselves with bile and emotion.