estate planning notes

[socca]

For those of you with a New Year’s resolution to do a little estate planning, here is what my dad did right and wrong regarding his own estate (IMO):

What he did right:

• he hired a lawyer specializing in estate planning to draft his will & revocable trust, and kept the documents up-to-date

• he transferred all of his titled assets into his revocable trust - no probate proceeding was required to settle his estate

• he gave his kids signature authority for all of his checking accounts

• he made his kids co-owners of his safety deposit boxes

• he allowed me to monitor (but not do transactions within) his brokerage account while he was alive. He planned to add me as co-trustee of his revocable trust but it didn’t happen before he died. This wasn’t a big deal - I had no trouble taking over as successor trustee after he died.

• before he died he disposed of all assets that might have required an appraisal had they remained in his estate.

• he left behind instructions on how to log into his computer and phone

• he left behind a file on his computer containing info on how to log into all of his bank, credit card, brokerage, IRS, and other misc accounts. He had literally hundreds of these accounts.

• the files on his computer were “reasonably” well-organized.

• he and his girlfriend were talking about co-habiting the year or so before he died, but it never happened.

• he and his girlfriend were talking about marriage the year or so before he died. He insisted on a pre-nup; she refused. The result - no marriage.

What he did wrong:

• the word “declutter” wasn’t part of his vocabulary. If you are keeping restaurant receipts from the 1970s, perhaps it’s time to toss them. He wasn’t a hoarder, exactly, but all of his properties had ample storage space and he didn’t hesitate to use it.

• he started a business (a property rental) as a charitable project for his girlfriend. He complained about how much more complicated this made his own taxes, and I was left to clean up the mess. Should folks in their 80s be starting a new business?

Summary:

• I might complain about the 600+ hours I’ve spent settling my dad’s estate so far, but after creating this post I realize that things could have been much worse. I should count my blessings.

Additional Recommendation:

• if the lawyer you hire to help settle an estate pushes the idea that you should use the lawyer’s in-house accountant and/or title company, just say no. Lesson learned!

 

[pjm-7]

Yes, estate planning is on my to-do list. I need to update my will, review beneficiaries (mostly charities) and clean up some files. It's an ongoing process, just need to make sure things are cleaned up around the edges. One note: for my dad's estate and I keep it for mine, keep an up-to-date list of all of the companies you do business with (i.e. investments, banks, insurance, pension etc.) it makes the phone calling process at the end so much easier than looking up phone numbers.

 

[nwsteve]

For those of you with a New Year’s resolution to do a little estate planning, here is what my dad did right and wrong regarding his own estate (IMO):

What he did right:

• he hired a lawyer specializing in estate planning to draft his will & revocable trust, and kept the documents up-to-date

• he transferred all of his titled assets into his revocable trust - no probate proceeding was required to settle his estate

• he gave his kids signature authority for all of his checking accounts

• he made his kids co-owners of his safety deposit boxes

• he allowed me to monitor (but not do transactions within) his brokerage account while he was alive. He planned to add me as co-trustee of his revocable trust but it didn’t happen before he died. This wasn’t a big deal - I had no trouble taking over as successor trustee after he died.

• before he died he disposed of all assets that might have required an appraisal had they remained in his estate.

• he left behind instructions on how to log into his computer and phone

• he left behind a file on his computer containing info on how to log into all of his bank, credit card, brokerage, IRS, and other misc accounts. He had literally hundreds of these accounts.

• the files on his computer were “reasonably” well-organized.

• he and his girlfriend were talking about co-habiting the year or so before he died, but it never happened.

• he and his girlfriend were talking about marriage the year or so before he died. He insisted on a pre-nup; she refused. The result - no marriage.

What he did wrong:

• the word “declutter” wasn’t part of his vocabulary. If you are keeping restaurant receipts from the 1970s, perhaps it’s time to toss them. He wasn’t a hoarder, exactly, but all of his properties had ample storage space and he didn’t hesitate to use it.

• he started a business (a property rental) as a charitable project for his girlfriend. He complained about how much more complicated this made his own taxes, and I was left to clean up the mess. Should folks in their 80s be starting a new business?

Summary:

• I might complain about the 600+ hours I’ve spent settling my dad’s estate so far, but after creating this post I realize that things could have been much worse. I should count my blessings.

Additional Recommendation:

• if the lawyer you hire to help settle an estate pushes the idea that you should use the lawyer’s in-house accountant and/or title company, just say no. Lesson learned!

_
++1000
After completing my 97 yo FIl's estate this month I would give your Dad high marks. In our case, FIL was still operating a sole proprietorship HVAC/sheet metal biz but not very well. Lots of hours sorting out and correcting prior period fed returns. His business "filing' system was beyond compare and not in a good way. Better than a shoe box since he had some file folders but many of them did not contain all the relevant data they were labelled to have. For any given month, we could find the records stuck in any of three different tax year folders. Closing his business with the various State agencies was an endurance contest with one agency always claiming they did not get the notifications of closure and wanting fees. (BTW, the State represented they provide a single point contact for such matters but apparently not agencies used.
I think you fared very well if all you had was old receipts that did not matter.
Congrats.

 

[RunningBum]

For those of you with a New Year’s resolution to do a little estate planning, here is what my dad did right and wrong regarding his own estate (IMO):

What he did right:


...

• before he died he disposed of all assets that might have required an appraisal had they remained in his estate.

This sounds like assets that would have a stepped up basis, meaning the gains he had would never be taxed. Isn't that worth the relatively minor task of you getting an appraisal? Or is this some other kind of asset?

 

[gauss]

Additional Recommendation:

• if the lawyer you hire to help settle an estate pushes the idea that you should use the lawyer’s in-house accountant and/or title company, just say no. Lesson learned!

Perhaps even reconsider if you actually need a lawyer if you have a high degree of confidence that the estate will be uncontested and everything is straightforward.

Thanks for the writeup!

-gauss

 

[FLSUnFIRE]

Thank you. As I've mentioned in other posts, my big project this coming year is to help get my parents stuff in order -selfishly as I'll be the primary sibling dealing with the estate. This will be helpful both to share with them and to heed.

 

[Stormy Kromer]

Thank you. Very helpful information.

 

[Midpack]

Good advice OP.

My sister and I are very grateful for all our Dad did to have his affairs in order when he died in 2018 (Mom died in 2005). Our situation was similar but not quite the same.

For those of you with a New Year’s resolution to do a little estate planning, here is what my dad did right and wrong regarding his own estate (IMO):

What he did right:
• about 20 years before they passed away, he hired a lawyer specializing in estate planning to draft his will & revocable trust, and kept the documents up-to-date
• he made my sister and I co-executors, and we split up all responsibilities, consulting each other on big moves. Fortunately my sister and I got along perfectly, no disputes at all. Even though I tried to give my sister more than half the proceeds, she insisted on splitting everything 50:50 per trust instructions.
• he put the house in my sisters name while he was still alive (she lived in his house with him for the last few years after Mom died), and told me why at the time (made sense)
• he transferred all of his titled assets into his revocable trust - no probate proceeding was required to settle his estate
• he gave his kids signature authority for all of his checking accounts
• he made his kids co-owners of his safety deposit boxes
• he left behind instructions on how to log into his computer and phone
• he left behind a file (and notebook hard copy) on his computer containing info on how to log into all of his bank, credit card, brokerage, IRS, and other misc accounts. He had literally hundreds of these accounts.
• the files on his computer were “reasonably” well-organized.
[-]• he and his girlfriend were talking about co-habiting the year or so before he died, but it never happened.
• he and his girlfriend were talking about marriage the year or so before he died. He insisted on a pre-nup; she refused. The result - no marriage.
[/-]
Neutral:
• he did not allow me to monitor (but not do transactions within) his brokerage account while he was alive. But Dad had liquidated all his mutual funds years before he died, and left everything in T-Bills and a little cash.

What he did wrong:
• the word “declutter” wasn’t part of his vocabulary. If you are keeping restaurant receipts from the 1970s, perhaps it’s time to toss them. He wasn’t a hoarder, exactly, but all of his properties had ample storage space and he didn’t hesitate to use it.
• before he died he disposed of all assets that might have required an appraisal had they remained in his estate.
[Sister and I begged our parents to sell off all their stuff for years, but they refused to do so (with a chuckle) - we knew they were leaving that for us to handle.]
[-]• he started a business (a property rental) as a charitable project for his girlfriend. He complained about how much more complicated this made his own taxes, and I was left to clean up the mess. Should folks in their 80s be starting a new business?
[/-]
Summary:
• There were some twists and turns, but settling our parents estate wasn't that bad all in all. No idea how many hours we spend but it was less than 600.

 

[WhenIsItTime]

For those of you with a New Year’s resolution to do a little estate planning, here is what my dad did right and wrong regarding his own estate (IMO):

What he did right:

• he hired a lawyer specializing in estate planning to draft his will & revocable trust, and kept the documents up-to-date

• he transferred all of his titled assets into his revocable trust - no probate proceeding was required to settle his estate

• he gave his kids signature authority for all of his checking accounts

• he made his kids co-owners of his safety deposit boxes

• he allowed me to monitor (but not do transactions within) his brokerage account while he was alive. He planned to add me as co-trustee of his revocable trust but it didn’t happen before he died. This wasn’t a big deal - I had no trouble taking over as successor trustee after he died.

• before he died he disposed of all assets that might have required an appraisal had they remained in his estate.

• he left behind instructions on how to log into his computer and phone

• he left behind a file on his computer containing info on how to log into all of his bank, credit card, brokerage, IRS, and other misc accounts. He had literally hundreds of these accounts.

• the files on his computer were “reasonably” well-organized.

• he and his girlfriend were talking about co-habiting the year or so before he died, but it never happened.

• he and his girlfriend were talking about marriage the year or so before he died. He insisted on a pre-nup; she refused. The result - no marriage.

What he did wrong:

• the word “declutter” wasn’t part of his vocabulary. If you are keeping restaurant receipts from the 1970s, perhaps it’s time to toss them. He wasn’t a hoarder, exactly, but all of his properties had ample storage space and he didn’t hesitate to use it.

• he started a business (a property rental) as a charitable project for his girlfriend. He complained about how much more complicated this made his own taxes, and I was left to clean up the mess. Should folks in their 80s be starting a new business?

Summary:

• I might complain about the 600+ hours I’ve spent settling my dad’s estate so far, but after creating this post I realize that things could have been much worse. I should count my blessings.

Additional Recommendation:

• if the lawyer you hire to help settle an estate pushes the idea that you should use the lawyer’s in-house accountant and/or title company, just say no. Lesson learned!

Good reminder post. With all the online stuff these days, have some good notes can save a ton of trouble.

My wife and I have been good at keeping the legal documents up to date. I did the items in bold for my wife before having open heart surgery earlier this year. Was busy work leading up to surgery and gave me some peace of mind.

 

[street]

Thank you. Very helpful information.

X2
Yes, thanks for the information and the nudge to get started.

 

[The Cosmic Avenger]

• he left behind a file on his computer containing info on how to log into all of his bank, credit card, brokerage, IRS, and other misc accounts. He had literally hundreds of these accounts.

Perhaps even reconsider if you actually need a lawyer if you have a high degree of confidence that the estate will be uncontested and everything is straightforward.

Yeah, the best thing my father ever did was to keep everything in a handful of accounts, and make them all TOD/POD so we didn't even have anything to probate. My mother, on the other hand, had the fear of having assets all in one place, so I had a spreadsheet where I added accounts as I discovered them. My father has inspired me to find ways to make my estate as simple as possible for our adult child.

• the word “declutter” wasn’t part of his vocabulary. If you are keeping restaurant receipts from the 1970s, perhaps it’s time to toss them. He wasn’t a hoarder, exactly, but all of his properties had ample storage space and he didn’t hesitate to use it.

Unfortunately, my father's apartment was the antithesis of his fiscal discipline. He not only had decades-old cable bills, he had them lining every wall of his small two-bedroom apartment. And he had broken furniture piled up in one corner that he was sure could be repaired and sold for a fortune -- and, of course, he was wrong about that, it was nice, sturdy furniture from his parents' era, but nothing anyone would pay good money for any longer. The only good part about the clutter was that he left me enough money to pay a few guys to load everything into a truck and haul it to the dump. I took home his almost-new car and half a trunk full of papers and mementos, and that was about it.

So if you really want to help your heirs, don't leave them a bunch of stuff they don't want or need.

 

[PatrickA5]

Yeah, the best thing my father ever did was to keep everything in a handful of accounts, and make them all TOD/POD so we didn't even have anything to probate. My mother, on the other hand, had the fear of having assets all in one place, so I had a spreadsheet where I added accounts as I discovered them. My father has inspired me to find ways to make my estate as simple as possible for our adult child.


Unfortunately, my father's apartment was the antithesis of his fiscal discipline. He not only had decades-old cable bills, he had them lining every wall of his small two-bedroom apartment. And he had broken furniture piled up in one corner that he was sure could be repaired and sold for a fortune -- and, of course, he was wrong about that, it was nice, sturdy furniture from his parents' era, but nothing anyone would pay good money for any longer. The only good part about the clutter was that he left me enough money to pay a few guys to load everything into a truck and haul it to the dump. I took home his almost-new car and half a trunk full of papers and mementos, and that was about it.

So if you really want to help your heirs, don't leave them a bunch of stuff they don't want or need.

I hear ya! Took me days to find my dads car title. It was filed in the middle of his file folder of 1966 insurance papers. Every drawer in the house had old paperwork.

 

[gauss]

I hear ya! Took me days to find my dads car title. It was filed in the middle of his file folder of 1966 insurance papers. Every drawer in the house had old paperwork.

I wanted to donate an older car that I owned in late 2017 in order to get the tax deduction before the "increased" Standard Deduction went in to effect in 2018.

Finding the title was no easy task given that the clock was ticking to complete the donation in time.

I eventually went to the DMV/SOS in my state to request a duplicate title. It might have cost me a few $ but was definitely worth it. The donation and tax deduction went off as planned.

-gauss

 

[The Cosmic Avenger]

I hear ya! Took me days to find my dads car title. It was filed in the middle of his file folder of 1966 insurance papers. Every drawer in the house had old paperwork.

LOL....I gave up and went to the DMV (in his state, not mine) to get a new title issued for my dad's car in my name, listing the old one as lost....and then found the old one a couple of days later! I could have had it transferred to my name via the mail with the old title.

(And when I said I had the contents of the apartment hauled off to the dump, that was after a week or two of digging through the mess to find important papers and keepsakes, and giving away whatever household goods I could to friends and relatives in the area.)

 

[ncbill]

Rental houses are a PITA.

None of the beneficiaries want dad's old rental house.

He allowed a long-term employee to live there essentially rent-free for decades and now they treated it like it's theirs.

I think I've convinced a sibling to take it.

I will help them deal with getting the resident out and the clean up and prep to ready it for sale but I didn't want any liability associated with owning & selling it.

 

[Winemaker]

This past year, I shredded every returned check, receipt, stub, tax return, bank statement, etc., birthday, anniversary, holiday card from when my folks got married back in 1955. Mom wasn't a hoarder, she just wanted to make sure no one could ever say that Mom and Dad, owed them money.

 

[socca]

This sounds like assets that would have a stepped up basis, meaning the gains he had would never be taxed. Isn't that worth the relatively minor task of you getting an appraisal? Or is this some other kind of asset?

What I meant to say is that no assets were left in his estate that were difficult to value for his estate tax return. I don't want to get into an argument with the IRS over the valuation of a particular item.

Side note: the accounting firm that prepared my dad's estate tax return offered me the opportunity to "save" 6-figures in estate tax due by taking an aggressive stance on a particular item. I said "no thanks". The U.S. tax code is so dang complex that sometimes it's unclear how to proceed.

 

[qwerty3656]

So do you think funding the Trust really saved you any time (over probate)?

 

[W2R]

Thanks for the tips, everyone.

In November I went to a lawyer and had a very simple will made, for the first time ever after DECADES of procrastination. It's hard to face one's own mortality! And I *hate* dealing with legal stuff because I don't think I fully understand the verbiage. But with bravery and valiance unseen by mankind since Joan of Arc, I finally had my first will made (at age 74) so at least that's a start.

Here in Louisiana we have a legal system loosely based on Napoleonic code so everything is different than in other states; otherwise I might have used one of the online make-a-will software programs but I didn't dare (horror stories abound).

Definitely some food for thought in this thread, so thanks. Perhaps I'll have my lawyer do some updates next year.

 

[Koolau]

I've tried twice to put the issue of estate planning behind me - going to those seminars, put on by law firms. I don't even mind the price tag - roughly $4K or so that they quote. They sound like it's a piece of cake - but during the 1 free hour consultation, I'm able to bring up 2 or 3 "sticky" subjects that they don't seem to have answers for. Not something "big" like taking care of an aging parent or disabled child after death. More like "stuff" on mainland as well as in Paradise. Or how do I find a trusted person to handle the remainder trust (without paying exorbitant fees to a bank or other trust company for virtually no w*rk.) Stuff like that - with lots of shrugged shoulders. YMMV

 

[badatmath]

Yeah I need to do this met with one lawyer who told me I needed a trust for reasons he could not articulate in a way I could understand. Set up to meet a 2nd one and then got the flu and had to cancel and then had to cancel the reschedule of that so getting nowhere fast.

 

[MarieIG]

I need to work on the estate plan and update our wills (simple enough but tedious). I'm not sure about a trust as of yet.

I'm NOT doing a Swedish death cleaning and tossing stuff I want to keep to make life easier for the next generation.

 

[Harris4crna]

Wow, wish my father did this. My father thought he would live forever and then he got Alzheimers. I spent the past two years caring for him while working a high demand full time job in the military. One reason I retired when I did was to care for him. Grateful I did, but added huge amount of stress that could have prevented. Yes, do your estate planning. Trying to get wife onboard right now, but she thinks she will live forever too.

 

[Koolau]

Yeah I need to do this met with one lawyer who told me I needed a trust for reasons he could not articulate in a way I could understand. Set up to meet a 2nd one and then got the flu and had to cancel and then had to cancel the reschedule of that so getting nowhere fast.

I'm pretty convinced we need a trust, but the intricacies seem daunting. Plus, I thought the law firm was supposed to do all the w*rk. My consultation made me think a lot of it (not just decisions) had to be done by me. I suspect when it's all done I'll look back and think "that wasn't so bad" but it seems a bit overwhelming from this end. YMMV

 

[FiveDriver]

I would like to ask the following questions.

All of my financial assets are at Fidelity, with DW as Primary Beneficiary and Daughter Dearest as Contingent Ben.

DW's financials are also at Fido, in a separate account, with Beneficiaries designated. The good folks at our local Fido Brick & Mortar know both of us personally.

Our Home is titled as JTROS. Both of our car's titles are stored in our strongbox and easily fetched, if needed. My guitar and amp are valued at a couple grand, and could be sold on craigslist.

1 -- Are the online state-specific Wills sufficient for these types of Assets ?

2 -- Approx how much does a lawyer charge for a simple Will these days ?

3 -- Do we have to pay the lawyer every time there's a change in assets ?? New Car ?? Different CD Account at a different vendor ?? How specific do these things have to be ??