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Old 08-14-2017, 05:24 PM   #41
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Originally Posted by Cobra9777 View Post
Splitting a joint account into 2 individual accounts is not a real solution. That's a crude workaround.
I think it is clever and would work for us. We have a joint account with a single investment in it that we have made zero transactions in it for several years now and don't expect to make any transactions until one of us dies.*

So we could split that into two individual accounts with each of us the primary beneficiary and the kids as secondary beneficiaries. That would give them enough cash to get through many months before wills are probated.

Vanguard allows multiple instances of types of accounts, so multiple Roth IRAs for me, multiple IRAs for my wife. Thus, multiple taxable accounts will not be a problem.

*But even if we did have transactions, it would not be a big deal.
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Old 08-14-2017, 06:25 PM   #42
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Originally Posted by RunningBum View Post
TOD (which isn't an "account" but rather a provision on your account) bypasses probate, so your heirs would get their money more quickly. It would probably reduce probate costs too.


Thanks RunningBum but it is my understanding that designating beneficiaries on a regular account bypasses probate as well. We confirmed this when we prepared our wills.

So far I don't see any need or benefit for joint accounts so we have individual accounts with spouse as primary and adult children are contingent.
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Old 08-14-2017, 06:56 PM   #43
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Thanks RunningBum but it is my understanding that designating beneficiaries on a regular account bypasses probate as well. We confirmed this when we prepared our wills.

So far I don't see any need or benefit for joint accounts so we have individual accounts with spouse as primary and adult children are contingent.
The difference with joint accounts is that that money belongs to both of you, and the survivor has access to it immediately. Otherwise you have to deal with giving the bank or brokerage firm the death certificate and waiting for them to pay you.

Between after-tax and retirement accounts and savings accounts, our joint holdings were over $1.7 million, but the full value of DH's estate that actually required probate, consisting of a checking account and his car, came to $8,000.

(There was also one personal savings account of his that I was TOD beneficiary, and it took more than 12 weeks and three letters to AmEx Personal Savings to finally get paid out--all of that for $1,100)

Everything else was jointly held (or passed via beneficiary designation, such as his 401k).

And as other people have said, a survivor will have some leeway in paying bills. In fact, in terms of some credit cards he held solely and medical bills of his, my estate attorney has insisted that I pay none of them until six months after the notice to creditors was run in a local paper.
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Old 08-14-2017, 08:23 PM   #44
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Originally Posted by LOL! View Post
I think it is clever and would work for us. We have a joint account with a single investment in it that we have made zero transactions in it for several years now and don't expect to make any transactions until one of us dies.*

So we could split that into two individual accounts with each of us the primary beneficiary and the kids as secondary beneficiaries. That would give them enough cash to get through many months before wills are probated.

Vanguard allows multiple instances of types of accounts, so multiple Roth IRAs for me, multiple IRAs for my wife. Thus, multiple taxable accounts will not be a problem.

*But even if we did have transactions, it would not be a big deal.
Or you could move the account to Fidelity or Schwab and set it up properly with no clever crude workarounds. Joint accounts exist for a reason.
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Old 08-14-2017, 08:45 PM   #45
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This thread has got me thinking. I have my wife as beneficiary on all my accounts. If I die she would get it all no kids or others.

My question, What happens if I lose my marbles? Does a POA outside of Vanguard take care of that? Do I need to make her an agent with Vanguard?
Thanks all
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Old 08-15-2017, 02:20 AM   #46
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i wonder if vanguard will even turn the assets over to an executor of a will to be distributed under the will , without probate clearance first .

according to their website it says:

------------------------------------------------------
Joint accounts
Your Vanguard joint accounts don't need beneficiaries. Joint accounts simply pass to the surviving owner.
------------------------------------------------
but there are no provisions for common death . (me commenting )


--------------------------------------------------------------
from vanguard's site

Will
ADVANTAGES
Identify the parties entitled to your assets.
Specify how and when your assets will be distributed.
Allow for the most tax-efficient way to divide your assets.

DISADVANTAGES
Your assets may be subject to creditors.
Your assets will have to go through probate.
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Old 08-15-2017, 05:31 AM   #47
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I will say dealing with Vanguard as a Trustee was a good experience. I did make a mistake with my Dad's trust after passing. Acting as Trustee, liquidated the account shortly after Dad's passing. But I forgot to let Vanguard know of his passing first. That was a dumb mistake.

What's the problem? Step up basis.

Guess what, "They had a form for that." Got the basis re-assigned for IRS purposes and we were good to go, despite my stupid mistake.

The biggest hassle with the trust was the incredibly thick and detailed application paperwork. And then the basis rework paperwork. There seems to be a lot of manual work involved with trusts.
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Old 08-15-2017, 07:46 AM   #48
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We found it's worth every penny to get a Living Revocable Trust. Upon both of our deaths, everything automatically goes into the trust and the trustee has complete control over assets with no probate involved. Doesn't matter who dies first or if we both die. The beauty of this is...if we both die, the trustee has the option of keeping everything in the trust, if it's an up market and economy going well. He has the control to disperse how he wants. For instance, 1/2 at this point in time to those who need most. Keep 1/4 in the market or sell all depending on the tax ramifications. All this can be set up exactly as you want it with your attorney, including IRA's, 401K, Roth. Nothing goes to probate. All this takes time and effort, no doubt. Have to do this with all accounts, no matter where they are. That's why we consolidated to a few accounts at different places so we have more control and know exactly what's going on.
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Old 08-15-2017, 07:51 AM   #49
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Also, given OP's concerns, trusts can be written to say that even if spouses die, say, 30 days apart, their deaths should be treated as simultaneous for matters governed by the trust.

Also, if trusts can be written so that, if you don't have jointly owned assets, your spouse as trustee can get access to them should you become incapacitated.
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Old 08-15-2017, 07:55 AM   #50
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except for vanguard everything we have requires no trusts . everything has a beneficiary.

we already spent 1k each for 2 disclaimer trusts which we needed at one time to get around ny estate taxes . we really have no reason to create any other trusts and go through the costs and hassle of paper work .

disclaimer trusts are not for holding assets as they don't exist unless the surviving spouse wants to activate them . we hope we never have to as it splits the estate in to an irrevocable trust taking control and free access away .
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Old 08-15-2017, 07:58 AM   #51
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keep in mind with living trusts putting your house in a trust removes the house from being a protected asset if medicaid is needed. while it is likely medicaid can't take it because it does not go through probate the catch 22 is it become a counted asset as far as qualifying for medicaid now. it may have to be sold and the money spent down to qualify .

your house held in your name does not count unless it's value is very very high .

just playing around with trusts can create new issues for you and i certainly would never use just any attorney to do any of the paper work . i want only the most experienced estate attorney as we already hit 2 major issues because of poorly done documents which it appears were done by general practitioners .
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Old 08-15-2017, 08:18 AM   #52
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keep in mind with living trusts putting your house in a trust removes the house from being a protected asset if medicaid is needed. while it is likely medicaid can't take it because it does not go through probate the catch 22 is it become a counted asset as far as qualifying for medicaid now. it may have to be sold and the money spent down to qualify .

your house held in your name does not count unless it's value is very very high .

just playing around with trusts can create new issues for you and i certainly would never use just any attorney to do any of the paper work . i want only the most experienced estate attorney as we already hit 2 major issues because of poorly done documents which it appears were done by general practitioners .
Absolutely, there is a need for an irrevocable trust in certain situations. Our attorney saved the whole family a big hassle with my mom's estate. We were able to get her into his office, literally before she became completely overcome with dementia. She was still in sound mind, but we knew it was slipping. That attorney worked quickly, she had to answer specific questions to prove her sanity and sign paperwork. That was a huge relief, because we all would have been screwed with many other costs and hassles upon her death. She did leave reality soon after, sadly. She no longer recognized her family or friends.
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Old 08-15-2017, 08:24 AM   #53
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i didn't say there is no need . i said i hope we never have to turn ours on . last thing we want to do is restrict ourselves if we don't have to.

my above post is about revocable trusts
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Old 08-15-2017, 09:21 AM   #54
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i happen to notice the vanguard joint account my wife and i have says no beneficiaries listed .

i know we did have them so i called .

i was told joint accounts can not have beneficiaries listed until they are down to a single owner.

that is ridiculous, all our fidelity joint accounts have beneficiaries . what happens in the event of a common disaster like plan crash or car crash . that logic is nuts .

we know a couple killed a few months ago in a horrible car crash .

we don't need our estate paying for probate costs here in ny . if that is the case i will give fidelity 100% instead of just 85% of our money
We've been with Vanguard a long time (Flagship) and our accounts have registered beneficiaries shown online for IRAs, Roths, and Joint Accts. We originally registered Joint Accts with beneficiaries, but Vanguard had us change them to TOD back in 2014 (form FD8PT). Paperwork was mailed to us and we signed off on TOD (they show online as beneficiaries).

IIRC - this option was available to us as the Joint accounts were originally set up with beneficiaries. I believe I caught the change when our Joint Accts were shown w/o any beneficiaries in 2014. On form FD8PT there is an option "A" for Joint Accts held solely in my name, and an option "B" All of our joint tenant accounts already enrolled in the plan (change my existing plan). I mention this as some here might have Joint Accts originally registered as we did, and this option might be offered to them.

FYI - (27) states allow you to add a TOD on your property. It might be an alternative to some of the more expensive options mentioned in this thread. This link lists which states (sorry - not New York)

States that Allow Transfer-On-Death Deeds for Real Estate | Nolo.com
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Old 08-16-2017, 10:11 AM   #55
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We found it's worth every penny to get a Living Revocable Trust. Upon both of our deaths, everything automatically goes into the trust...
So the trust isn't funded until you die?

How do you avoid probate with the "pour-over" will that distributes assets into the trust?

We used a Revocable Living Trust, setting it up with myself as co-trustee (not successor) when mom was diagnosed with a long, but terminal illness, then used a financial POA to retitle her assets into the name of the trust.
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Old 08-17-2017, 07:49 AM   #56
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I'm sure Schwab has contingent beneficiaries, and 99% sure Fidelity does. If you can't take care of this at Vanguard, go to one of them. That's really amazing--are you sure, or is it just the online part?

Note - when transferring, make sure you say you want all the securities transferred (not sold/liquidated) so there are no tax issues or added expenses. Good luck!
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Old 08-18-2017, 07:29 AM   #57
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Here is Vanguard's response to my question about why they do not allow joint account beneficiaries:

"Thank you for your email regarding Transfer on Death (TOD).

Vanguard has decided that, in most cases, a TOD plan offers minimal
benefits on joint accounts. Beneficiaries on joint accounts are used to
cover the rare possibility that all the joint account owners will die
simultaneously. Such provisions are beyond the scope of Vanguard's TOD
plan.

I have reviewed this with our management, specifically surrounding the
possibility of simultaneous death of joint owners. While the TOD plan could
allow for the transfer of ownership rights in the unlikely event of
simultaneous death, it may not do so in a tax-efficient manner and may
limit the heirs' options.

Other estate-planning tools, like wills or trusts, allow investors to
utilize strategies that the TOD plan does not have room for, and they could
increase the amounts that heirs actually receive. Additionally, relying on
TOD plans increases the possibility of heirs being responsible for final
expenses, debts and taxes without adequate resources left in the estate to
cover such costs.

As you may know, a Vanguard TOD plan overrides the terms of a client's
trust, will, or other estate planning documents. However, community
property laws outline rules for ownership rights, and these laws remain
intact. This makes it more likely for assets to be transferred to an
inappropriate party and for disputes among beneficiaries. Since our TOD
plan is a Pennsylvania contract, it is interpreted under Pennsylvania law.
The laws of your state of residence may include more favorable provisions.

If you want to ensure that your assets will transfer to listed
beneficiaries for a joint account, we encourage you to contact an estate
planning professional. The estate planning professional will be able to
advise you on what steps you can take to ensure that the assets in your
joint account are transferred to the appropriate beneficiaries.

Please let us know if you have any further questions or concerns."

DW and I have trusts and can easily insure that enough funds are readily available for the kids to clear up expenses so it isn't much of an issue to me.
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Old 08-18-2017, 07:37 AM   #58
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I got the same boilerplate response.... then had a short conversation with my Flagship rep (who is pretty good) and he stuck with the party line... obviously he is bound by Vanguard's idiotic policy.

So if I decide that I want to remedy this potential problem then I'll either just split the joint account balance into individual accounts that can have primary and secondary beneficiary designations or move the joint account to another provider who can provide TOD on joint accounts.

The latter might have tax implications since the joint account is all Total Stock and Total International Stock Admiral shares, but I "think" I could convert the Admiral shares to ETFs at Vanguard and then transfer the ETFs in-kind to a different provider but I haven't researched whether that is really doable.

Luckily, the joint account is the one that we are living off of and is only 12% of our total nut so the "problem" will diminish over time.

What this new information does do is nix the idea that I had to simplify our taxable accounts by consolidating the assets in our individual accounts into the joint account.
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Old 08-18-2017, 07:39 AM   #59
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while i agree with their response , all the other alternatives open the door for more problems with the introduction of every other document used beyond just beneficiary .

like i said we already hit 2 issues with estate documents in our life time that cost us as the heirs, money and grief because wording in the documents was not up to par or there were omissions .

nothing is a problem -until it is a problem has never been more truer than with wills , trusts and poa's .
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Old 08-18-2017, 07:40 AM   #60
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Just get a trust. Far superior to payable on death designations.
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