Help getting non-financials in order

[JohnDoe]

I've been putting this off for too long and figured I could get some good answers here.

I am in my late 30’s and wife is a few yrs older. We have 1 child who is 8. I have planned out our road to early retirement which I am shooting for 50, while also saving for college.

My concerns are the following…

*We have no wills. Not sure what should go in one.

*I don’t know who should be guardian of our child, should we pass suddenly.

*I don’t know if I need any estate planning now. Current net worth is under 500k.

*I helped father in law with retirement finances and healthcare. Should I look into getting financial power of attorney and the wife medical POT incase his health declines? He is doing ok now but has coronary heart disease.

*What about POT for my parents who are over 62 but in good health.

I am probably forgetting some things too.

What (types of)lawyers should I contact with these issues? If you need additional info or have questions, just ask.

Thanks.
JD

[SecondCor521]

An estate planning attorney can help you write up a will and looking at your estate situation. That takes care of the first three bullet items.

For the last two, your parents and in-laws should consult with an estate planning attorney as well. They can write up living wills, durable healthcare power of attorney, and springing power of attorney documents.

2Cor521

[kaudrey]

Hi JD,

Yes, you should definitely make wills and establish who the guardian/s of your child will be. Without it, your child's welfare will be decided by a court, and someone you don't want might be appointed guardian. I would do this YESTERDAY. The will should spell out how you want your child taken care of as well as how you want your assets distributed. You and your wife can write separate wills or a joint will. Make sure you name back-up guardians, just in case.

As for the other documents, it is a good idea for everyone (you as well as your parents) to have POAs and health care directives. Someone should be able to make financial and health care decisions for you if you are unable to, and in the manner that you want.

An attorney can help you draw up standard documents for not a lot of money.

Karen

[perinova]

I am just about in the same situation you are. And I am guilty not to do anything about it so far!
This being said, there is a thread where we previously touched on this subject.
IMHO in most non complicated cases you can prepare the paperwork yourself using a kit. I would suggest borrowing at the library or buying (gulp) Nolo books on the subject. They have a CD with boiler plate documents.

Did anyone have a software recomendation for this?

[JohnDoe]

Thanks for all the replies. I guess I'll have to contact an estate attorney. Will they tell me what we need to bring to the meeting(s) and if I need to make any decisions before hand? Or do we just show up and start from the beginning?

[Mwsinron]

Wife and I contacted an attorney and he told us to do our own will. However we are in a different situation with no children. The fact that we were just leaving everything to each other made it fairly simple.

[Brat]

I don't have a software recommendation because I think that an experienced estate lawyer is what they need. True, you may not have a lot of financial assets, but the most valuable asset is the care of the child. Don't make a mistake there.

Health care directives and a health care power of attorney, again, are necessary whatever your resources.

Once you get that done tell your parents and talk about how important these documents are. Then encourage them to do the same. Lead by example.

There is no harm in educating yourself about the issues. This process often forces you to look at your life insurance, retirement savings, disability insurance, home title, lots of stuff you probably haven't thought about in a while.

[SecondCor521]

Quote:

Originally Posted by JohnDoe Thanks for all the replies. I guess I'll have to contact an estate attorney. Will they tell me what we need to bring to the meeting(s) and if I need to make any decisions before hand? Or do we just show up and start from the beginning?

The attorney may give you a list of things to bring in. If you ask ahead of time what to bring you'll almost certainly get a list. (If you don't I wouldn't use that attorney.) The attorney I'm using to redo my will after my divorce sent me a questionnaire.

You do want to go in prepared. That way it will (a) take less time, which is important if the atty is charging you by the hour, and (b) you'll be more likely to end up with what you want.

I'd go in with the following:

1. Names, addresses, and phone numbers of those people whom you want to serve as:
a. Custodian of your minor child (primary and secondary)
b. Executor/executrix of your estate (primary and secondary)
c. Trustee of any trust your estate may establish (primary and secondary)
2. A net worth statement showing current account balances.
3. What you want to happen if you're incapacitated, both from a medical point of view and a financial point of view

2Cor521

[JohnDoe]

I just spoke to Estate planning office...they said for Wills, Estate Planning, and Power of Attorney combined services, it would cost $295 per person plus notory fees. They offer an free inital consultation.

Does that sound about right?

SecondCor521,
That's a nice list of things to take. My problem is I don't know the answers to some of those questions. With life insur, assets would be over 1 million.

[SteveR]

Quote:

Originally Posted by JohnDoe I just spoke to Estate planning office...they said for Wills, Estate Planning, and Power of Attorney combined services, it would cost $295 per person plus notory fees. They offer an free inital consultation. Does that sound about right? SecondCor521, That's a nice list of things to take. My problem is I don't know the answers to some of those questions. With life insur, assets would be over 1 million.

You must answer these questions. The lawyer is not going to be able to do so. Check with family and friends. Look over your "stuff" and see who you want to have it all once you both are gone. Wills are not locked in stone. You can change them as often as you need to and you will need to as life event come and go.

Get you list of answers together before you see a lawyer for the will. It will save you all a lot of time and anxiety.

[SecondCor521]

Ditto what SteveR says.

If you don't decide, your atty won't decide for you.

if you don't decide and die, most likely your state government has rules for making the decisions for you. You may not like the decisions the state would make.

2Cor521

[JohnDoe]

Well I have my appt tomorrow.

Just a couple of questions...

What do most people do(in there will) with their house and belongings when they have a minor?

I was thinking to pay the mort off and add the property to a trust fund for my child. When she turns old enough she would assume the house.

Does that sound right?

Who lives in it till then? Who ever I state - like the guardian I assign? When do they leave?

As far as a trust fund goes, can say how and when I want monies distro'd to my child? For example...50k a year from age 20 to 30. I guess I'm not sure if I need a trust fund.

My main problem is that I don't know anyone(friends or family) who is money smart. So I would think my instructions would have to be precise.

I'm hoping the lawyer can wall me thru alot of this. I will be taking all the info everyone suggested.

[LOL!]

Selecting a guardian for a minor can be one of the most difficult decisions you make when it comes to a will. We are fortunate to have easy choices in that regard. The "money smart" guardians have control over the assets, so I imagine our kids would go live with them and sell our house. At least that would be the smart thing to do.

Your attorney can be helpful in deciding what to do with the assets given in trust to your minor. I didn't want to "control from the grave", so I did not specify how things have to be invested, etc. But I read that many folks do specify limits to investments.

[JohnDoe]

These are all difficult decisions. Not only that, it's pretty depressing thinking about all this stuff.

[SecondCor521]

Quote:

Originally Posted by JohnDoe Well I have my appt tomorrow. Just a couple of questions... What do most people do(in there will) with their house and belongings when they have a minor? I was thinking to pay the mort off and add the property to a trust fund for my child. When she turns old enough she would assume the house. Does that sound right? Who lives in it till then? Who ever I state - like the guardian I assign? When do they leave? As far as a trust fund goes, can say how and when I want monies distro'd to my child? For example...50k a year from age 20 to 30. I guess I'm not sure if I need a trust fund. My main problem is that I don't know anyone(friends or family) who is money smart. So I would think my instructions would have to be precise. I'm hoping the lawyer can wall me thru alot of this. I will be taking all the info everyone suggested.

I don't know what most people do with their houses. In my case, I have assigned guardianship of my kids to a close family friend, and expect that my kids would move to live with that person. My sister is the administrator of the trust that my will creates. I will be leaving instructions to her to sell my house and put the proceeds into trust for my children.

You can do whatever you like, it's your house and your will. Some things I would wonder about in your case:

1. Who is responsible for and pays for maintenance?
2. What about liability concerns?
a. What if the guardian trips and breaks a leg -- they could sue your trust, I would think.
b. What if the guardian decides not to take care of the house, or accidentally burns it down?

Yes, you can establish a trust. My will establishes one and says that each kid gets a third of their remaining portion at age 30, a third at age 35, and a third at age 40, or something like that. You can pick any ages and percentages you like. Most people want to balance giving money to the kid early enough so it makes a difference in their kids' lives but late enough so that the kid doesn't blow it all on something "immature".

2Cor521

[Charlotte]

JD - my DH and I have 2 children, and got our affairs in order upon the birth of the second child. Our wills name each other first as beneficiaries, then, should we both die together (in an accident, for example), it names our children. Since our children are minors, we instructed for our assets to be left in trust for them, with said trust managed by the named guardian (my husband's sister). We also did powers of attorney and living wills at the same time.

Once you have all these documents, you'll need to remind yourself to review them periodically, as well. Are the named executors or guardians still living? still capable? still willing? etc.

Good luck... I know it's not fun, but it's critical for your child.

Charlotte

[JohnDoe]

Quote:

Originally Posted by SecondCor521 You can do whatever you like, it's your house and your will. Some things I would wonder about in your case: 1. Who is responsible for and pays for maintenance? 2. What about liability concerns? a. What if the guardian trips and breaks a leg -- they could sue your trust, I would think. b. What if the guardian decides not to take care of the house, or accidentally burns it down? 2Cor521

I had my meeting today. Some things the attorney suggested were...

*Doing a disclaimer will instead of a regular will

*Having the guardian(and her kids) live in my house and maintain it until my child finishes college

*Drawing down the trust account in stages(like many suggested here)

*Having gifting agents for Financial POA

*Setting percentages of estate with maximums for any gifts we want to give before assets are trusted to child

*Looking into long term care for ourselves

It was a lot to take in. I wish I had the meeting recorded for future reference. I took as many notes as I could. I have to review everything and start piecing it together. Good thing is I pay nothing until all the documents are completely finished.

2Cor521, those are some good questions. I'll get some answers.

JD

[JohnDoe]

Finally signed off on all the estate planning documents. It only took 4 months. lol I'm glad it's over. Thanks for all the help.

One last question. SecondCor521, perhaps you know the answer.

My attorney suggest I change my 2nd bene on all my account to the following: "My daughter, HER NAME, in trust pursuant to the terms of my trust established under my Last Will and Testament dated DATE"

How can I do this when:
1. most forms have a small name field(do I attach my own paper and write this in?)
2. forms ask for ssn and bene type - the trust isn't established yet and won't be until needed

Thanks.
JD

[FinanceDude]

Quote:

Originally Posted by SecondCor521 I don't know what most people do with their houses. In my case, I have assigned guardianship of my kids to a close family friend, and expect that my kids would move to live with that person. My sister is the administrator of the trust that my will creates. I will be leaving instructions to her to sell my house and put the proceeds into trust for my children.

What about your children's biological mother? She has a right to the kids............

[SecondCor521]

John Doe, I would contact each of the institutions and ask them how to do it.

FinanceDude, you're absolutely correct. According to my attorney, here's how it goes for minor children:

1. As long as both parents are alive, we follow the custody schedule in our divorce agreement.
2. When the first parent dies, the other parent gets full custody automatically.
3. When the second parent dies, guardianship goes to whomever the second parent has named in their will.

Hopefully we don't get to step 3 in the next thirteen years, but if we do that's what the will is there for.

Hope that clarifies.

2Cor521