To Will or Not To Will, That is the Question

[bingybear]

There is a lot of talk about the need to leave a will. However, in many circumstances with a little planning, you don't need a will. For instance, if your assets are in the below-listed accounts, don't bother to have a will:

- property you’ve transferred to a living trust
- life insurance proceeds
- funds in an IRA, 401(k), or other retirement account
- securities held in a transfer-on-death account
- payable-on-death bank accounts, or
- property you own with someone else in joint tenancy or tenancy by the entirety.

All of these assets will pass to the surviving co-owner or to the beneficiary you named, whether or not you have a will...

This is great if one creates and update beneficiary info and TOD. IRA/401k without beneficiary may not go where you want.
Be really careful of doing estate planing using joint tenancy. There are many stories where an elder parent will put a child on the title of a brokerage account or house and then the child runs into legal issues like a car accident and lose part or all of the asset. Also the child may not get the same basis step up since they are now an owner and not the beneficiary. Also the process of adding someone other than a spouse to the title would likely be considered a gift and trigger a gift tax return and at least a hit to the unified exclusion (plus state gift tax where applicable) unless the amount is below the annual gift amounts to an individual.

It seems from what I have heard attorneys tend to produce a pour over will even with a living trust just in case something is omitted. One thing that could be omitted otherwise is jewelry and household goods and furniture. Since these things don't have titles it is not possible to put them into a trust. A pour over will just puts the residue of your estate into a trust. Pour Over Will Definition, Examples, Processes. It is sort of a just in case something is is not put into the trust, this takes care of it. It need not be a very complex will as the link provides an example.

From what I understand you can put things without titles in trusts buy listing them in such a way that they are well defined or using a deed of gift (or similar). This really does not eliminate the need for a pour over will if you want to be in control of how all your assets will be dispersed. Being a trust takes it out of public record.

 

[Taxman59]

I worked with an Attorney whose business model was based on estate administration. He said the largest intestate estates were of small children. He said children don't die of natural causes, so there is almost always a lawsuit over the death. A pour-over will will have the proceeds of the lawsuit pass into the trust without a second attorney hit (the litigator will get his/her 40%, and the intestate attorney will get 3-5% more!).

 

[mpeirce]

I've been trying to update my understanding of these issues lately.

No one in the family has died in a while, so I haven't seen how this works:

What are the mechanics of a house going to, say, seven siblings?

In the living trust case, I assume the title gets changed to include the seven siblings and they can then sell it and split the proceeds (and expenses until it's sold). The trust trustee only has to do the title transfer. After that, everyone has to agree to the details and pick someone to handle it.

How close am I?

 

[bingybear]

It depends how and if the trust is set up. If the house is owned by the trust before death, the trust disposes of it as indicated in the trust. If the will distributes it to the trust, then it will go to the trust after going thru probate.
If the house is distributed to the heirs as joint ownership, you may have a lot of fun is some what to keep it and others want to sell it. The ones who want sell it may have to take legal action to force the sale. I saw this tear apart a family when a farm was left to all the children. One child was paying all the up keep -- taxes, insurance, etc. The others were living on it. The one who as footing the bill forced a sale and the other children have never communicated with them again.

Hopefully the case you're referring to will be better.

 

[MasterBlaster]

I had a client last year, in the fiduciary position, gamble over $500k away during administration. That was a court "supervised" probate. Yes, not a trust. GONZO! FIVE HUNDRED K! Nice job by the probate "police" there.

A trust won't help with these type situations. If anything it may happen and nobody finds out about it because of the privacy aspect of trusts. Like I posted, a normal will and court supervised probate has less chance for "funny" business. But it can't and won't eliminate every situation of abuse.

Just pick a good trustee so you don't need the trust police.

While I agree with that, it helps to have the court watching since there are no trust police. People can get really weird and act very differently when money is involved.

- You never know !

 

[qt333]

If you have any real property (even a timeshare) you should probably consider a living trust. In California all interests in real property require trips to the probate court after death. If the value is less than $150k there are abbreviated probate court options but it's still probate court and it's still much more expensive than a trust.

I thought a transfer-on-death deed could also avoid real estate probate costs without using a trust?


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[Mikegt4]

When I was hospitalized last year I was pleasantly surprised to find that the hospital would make a POA and Living Will (health care directive) at no charge. Now if I could only get my son to have them made for him I would feel better (they will do it for healthy people as well).

 

[Sunset]

All this discussion made me look at a brokerage account, and get the form to designate my DW as beneficiary as the online account will not show who is current beneficiary.

 

[ERD50]

When I was hospitalized last year I was pleasantly surprised to find that the hospital would make a POA and Living Will (health care directive) at no charge. Now if I could only get my son to have them made for him I would feel better (they will do it for healthy people as well).

In my recent experience, each facility we entered (hospital, Skilled Nursing, Assisted Living) wanted you to sign their version of the paperwork. I'd have to check, but I think that was POA and Health Care Directive. I guess they don't trust any one else's paperwork to be complete, or don't want to deal with decoding umpteen versions of the same thing? This stuff should be standardized forms.

-ERD50

 

[fh2000]

I thought a transfer-on-death deed could also avoid real estate probate costs without using a trust?


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I am also doing the research on estate planning. I only have a simple will at this time. I see that in California, Governor Brown signed into law, beginning 1/1/2016, Transfer on Death Deed is now available:

Californians have a new way to keep homes out of probate - San Francisco Chronicle

"..., homeowners who want to use the new option will simply sign an instrument called a Simple Revocable Transfer on Death Deed, naming who will receive the property. They must have it notarized and record it with their county within 60 days. If they change their mind, they can revoke the deed at any time."

I am trying to find out where to get this document so I can prepare and sign it....

 

[Sarah in SC]

We keep our wills updated (about every 10 years) and have health care POAs and advance directives. Our retirement accounts name each other as primary and estates as contingent. We have "I love you" wills, meaning everything goes to each other, but in case of common disaster, we have trusts set up to benefit our niece and nephews, with a BIL as trustee. And a separate sheet that includes a sort-of life estate and payment for our roommate to stay on for a period and assist BIL (also the executor) with the disposition. As the kids get older, I'll change things up, with named contingent beneficiaries of the IRAs and perhaps something different with the house.

Cost around $700 this last time, in SC.

 

[qt333]

I am also doing the research on estate planning. I only have a simple will at this time. I see that in California, Governor Brown signed into law, beginning 1/1/2016, Transfer on Death Deed is now available:



Californians have a new way to keep homes out of probate - San Francisco Chronicle



"..., homeowners who want to use the new option will simply sign an instrument called a Simple Revocable Transfer on Death Deed, naming who will receive the property. They must have it notarized and record it with their county within 60 days. If they change their mind, they can revoke the deed at any time."



I am trying to find out where to get this document so I can prepare and sign it....

I used this one
http://www.sbcounty.gov/arc/_pdf/Revocable_Transfer_on_Death_Deed.pdf



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[growing_older]

When I was hospitalized last year I was pleasantly surprised to find that the hospital would make a POA and Living Will (health care directive) at no charge. Now if I could only get my son to have them made for him I would feel better (they will do it for healthy people as well).

I ran into this is the hospital as well. They were quite surprised and a little flustered when I told them I did NOT want a DNR order and all their forms only included checkboxes for various conditions under which I would I would not be resuscitated. Also they seemed very pushy about wanting organ donations. Maybe I looked a lot worse than I felt.

 

[CaliKid]

California transfer on death deeds are ok for transfer on death. Not great though as what if your beneficiary isn't alive? No back up plans can be put there as they can in a real trust. However, the much bigger problem is it's a transfer on DEATH. What happens on disability? How does someone sell your house to pay for the nursing home? A living trust, at least in California, is far superior to any other option in 99.9% of the situations. Anybody coming up with excuses to the contrary is fooling themselves. 20+ years and well over a thousand post-death/disability cases of experience speaking here.

 

[Jack_Pine]

We have everything in a trust. the will simply states...See trust. All of our major property has the owner listed as the trust. No probate and no court to make "determinations" (which is the main point of the trust to us)

We have the main trustee listed as a niece and the backups are other nieces and nephews who we trust implicitly.

No one has seen the document. The executors have the combination to our safe where the document exists.

 

[CountryGal]

Something to consider on the subject of DNR:

The Dirty Secret about CPR in the Hospital (That Doctors Desperately Want You to Know)
APRIL 11, 2016
https://kvscruggs.com/2016/04/11/th...al-that-doctors-desperately-want-you-to-know/

 

[meierlde]

California transfer on death deeds are ok for transfer on death. Not great though as what if your beneficiary isn't alive? No back up plans can be put there as they can in a real trust. However, the much bigger problem is it's a transfer on DEATH. What happens on disability? How does someone sell your house to pay for the nursing home? A living trust, at least in California, is far superior to any other option in 99.9% of the situations. Anybody coming up with excuses to the contrary is fooling themselves. 20+ years and well over a thousand post-death/disability cases of experience speaking here.

This is what a durable power of attorney takes care of if the provisions are properly written the holder could sell the house. Also it makes sure you have a person of your choice. My Aunt was placed into a guardianship and the court appointed guardian fleeced her of all her assets. But she was also in a nursing home and on medicaid so the state paid one way or the other.

 

[Clone]

One thing to remember about trusts.

If you establish the trust, you have to follow the rules of how you handle the money, what records you keep, how you move things in and out of the trust.

A number of folks used to set up these trusts so that if they went into a nursing home the state couldn't get at their estates. But then they did not treat the trusts like a trust, and when things unraveled the trust would get thrown out because it had not been maintained properly.

 

[easysurfer]

No more procrastinating for me. I have an appointment with my lawyer on Monday to go over the will questionnaire that I filled out.

This exercise has me thinking though, the process of determining if someone has a will or not seems so archaic and on the honor system.

Let's say if someone is pretty much a private person, doesn't have a surviving spouse and has a will but leaves one of the children out. What's not to say the left out child finds the will but decides put that in the fireplace in attempt to inherit intestate.

If you are a public figure, that may not work. Such as with Michael Jackson where at first there was speculation he had no will, but then later on determined he had a living trust. However, for a regular non public figure, I can easily see someone who had a will but not found out until years later.

I suppose to moral of the story is don't keep one totally secret if you want the will discovered.

 

[O2Bfree]

This exercise has me thinking though, the process of determining if someone has a will or not seems so archaic and on the honor system.

Let's say if someone is pretty much a private person, doesn't have a surviving spouse and has a will but leaves one of the children out. What's not to say the left out child finds the will but decides put that in the fireplace in attempt to inherit intestate.

I think you can file a copy with the county courthouse to help prevent this problem. Not sure how everyone would know it's there though. Maybe there's a records check when you die?

 

[easysurfer]

I think you can file a copy with the county courthouse to help prevent this problem. Not sure how everyone would know it's there though. Maybe there's a records check when you die?

That's pretty much where I was going about would be nice if there is some sort of system. I think about the situation now with Prince. The courts are already involved and the assumption is "no will", yet not certain.

 

[Sarah in SC]

Well, your named executor should know where it is. I keep our wills at my office, and my boss knows to get in touch with our executor.

 

[easysurfer]

Met with my attorney yesterday about my will creation. Overall, pretty straight forward only a few discussions on what I put on the attorney's questionnaire.

Oh, I did pass up on the chance to have a kitty trust fund set up so would get a ration of kibbles and bits each day , but did name them on my will and some $$ for my sister to care for.

 

[gayl]

After going thru mom's death & dear brother being an executor on a very poorly written trust, I set my things in order. No attny, just me, and the small estate affidavit within the CA limit of 150k:
1. All investment, bank, insurance with 'Totten' trust AKA: POD / TOD designated beneficiaries
2. House titled to trust $10 UPS Notary / $14 Recorder fees. 1 page trust with 5 witnesses
3. 1/2 page note to son with how to 1099 those who still owe me + their names + their SSNs

Will redo house title to the TOD now -- so easy

 

[gayl]

Ok. I've gone to site. Apparently I'd need to title house back to me, do a PCOS, then the TOD form. Is it necessary?