Will vs Living Trust

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Oak&Elm
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Will vs Living Trust

Post by Oak&Elm » Sat Apr 01, 2017 9:28 am

I'm going back and forth between a Will and Living Trust. Currently I have a Will in place and a Deed on Death form to cover the transfer of my home to my 4 kids. Both my wife and I are upper 50's but I have some concerning health issues. If I pass I want to make it as easy as possible on my wife, thus the Will vs Trust dilema. She is oblivious to financial matters and has no interest in learning. Our home is worth about $500k and investments about $1.5M. Any advice would be appricated, I have avoided going to an estate lawyer because I think I can do this myself and I'm a penny pincher. I tried to set up a Lving Trust years ago but got bogged down trying to place assets in the Trust so went back to a simple Will, help please

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dm200
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Re: Will vs Living Trust

Post by dm200 » Sat Apr 01, 2017 9:32 am

Guardyourheart wrote:I'm going back and forth between a Will and Living Trust. Currently I have a Will in place and a Deed on Death form to cover the transfer of my home to my 4 kids. Both my wife and I are upper 50's but I have some concerning health issues. If I pass I want to make it as easy as possible on my wife, thus the Will vs Trust dilema. She is oblivious to financial matters and has no interest in learning. Our home is worth about $500k and investments about $1.5M. Any advice would be appricated, I have avoided going to an estate lawyer because I think I can do this myself and I'm a penny pincher. I tried to set up a Lving Trust years ago but got bogged down trying to place assets in the Trust so went back to a simple Will, help please


If you have not already done so, consult with an experienced, impartial estate planning attorney. The money you spend, in my opinion, is well worth it.

The deed of death may not be the best way to handle the house. Make sure you have proper PoAs in place. Consider (ask the attorney) complex wills (both need coordinated documents) with Testamentary trusts as well as Living trust.

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Re: Will vs Living Trust

Post by RadAudit » Sat Apr 01, 2017 9:39 am

Guardyourheart wrote: I have avoided going to an estate lawyer because I think I can do this myself and I'm a penny pincher.


Why, yes you can do this! You can also mess it up big time.

By the way, read Beyond the Grave. It has a few wonderful horror stories about transferring an asset (the house) to four kids. The bottom line will be that they'll have to sell the house to divide the money. The fun begins - and the lawyer fees begin big time - when one of the kids doesn't want to sell.
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Oak&Elm
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Re: Will vs Living Trust

Post by Oak&Elm » Sat Apr 01, 2017 9:53 am

I did read Beyond the Grave, great book. I just want to make life simple for my wife and avoid probate.

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dm200
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Re: Will vs Living Trust

Post by dm200 » Sat Apr 01, 2017 10:35 am

Guardyourheart wrote:I did read Beyond the Grave, great book. I just want to make life simple for my wife and avoid probate.


Depending on many details, avoiding probate may not be "simple for your wife".

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Re: Will vs Living Trust

Post by J295 » Sat Apr 01, 2017 10:49 am

I believe your resources would be well spent with a good estate planning lawyer. Perhaps your situation is uncomplicated and your intent is straightforward, but one really can't tell without more facts and a dialogue with you and your wife. Do you want to avoid probate? Are you/your wife ok if the survivor receives everything, and then later on (say in 10 or 20 years) remarries, becomes active in a charity, etc. and leaves one or more of your children out of her will/trust? What happens to the estate share on one of your children if he/she pre-deceases you? Do you have powers of attorneys and powers of attorney for health care (and do the "work" for working with the social security office? are the durable or springing (I'm not a fan of springing), etc.)?


You stated that:
Currently I have a Will in place and a Deed on Death form to cover the transfer of my home to my 4 kids.


Is this accurate? Do you intend that your wife will have no ownership interest in the home following your death?

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dm200
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Re: Will vs Living Trust

Post by dm200 » Sat Apr 01, 2017 10:57 am

J295 wrote:I believe your resources would be well spent with a good estate planning lawyer. Perhaps your situation is uncomplicated and your intent is straightforward, but one really can't tell without more facts and a dialogue with you and your wife. Do you want to avoid probate? Are you/your wife ok if the survivor receives everything, and then later on (say in 10 or 20 years) remarries, becomes active in a charity, etc. and leaves one or more of your children out of her will/trust? What happens to the estate share on one of your children if he/she pre-deceases you? Do you have powers of attorneys and powers of attorney for health care (and do the "work" for working with the social security office? are the durable or springing (I'm not a fan of springing), etc.)?
You stated that:
Currently I have a Will in place and a Deed on Death form to cover the transfer of my home to my 4 kids.

Is this accurate? Do you intend that your wife will have no ownership interest in the home following your death?


Yes - consider many "what ifs" in planning. Just one example - suppose you want all of your assets to go to 4 children in equal shares - and set it up (perhaps through POD/TOD and beneficiary designations). Then, one child predeceases you and has dependents. Would you want the family of the deceased child to be completely left out? That is just one (of many) "what if" situations to consider in a full estate plan (whether will or trust).

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Oak&Elm
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Re: Will vs Living Trust

Post by Oak&Elm » Sat Apr 01, 2017 11:07 am

Everything my wife and I own is joint except for individual IRAs and beneficiary should cover that. If one of our kids dies before my wife or myself I would change my documents accordingly. My basic question is a Will sufficient or would BH folks recommend a Living Trust.

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Re: Will vs Living Trust

Post by 1210sda » Sat Apr 01, 2017 11:26 am

Guardyourheart wrote:Everything my wife and I own is joint except for individual IRAs and beneficiary should cover that. If one of our kids dies before my wife or myself I would change my documents accordingly. My basic question is a Will sufficient or would BH folks recommend a Living Trust.


As stated above, you already have it set up to avoid probate. So if that's all you want, you are already there.

If you wife will need help with management of the portfolio, you could set up a trust, or hire VPAS (for only 0.3%) or, you could use either Target Date funds or a lifestrategy fund.

If you want asset protection, then you might want to consider a trust.

1210

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dm200
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Re: Will vs Living Trust

Post by dm200 » Sat Apr 01, 2017 11:43 am

Guardyourheart wrote:Everything my wife and I own is joint except for individual IRAs and beneficiary should cover that. If one of our kids dies before my wife or myself I would change my documents accordingly. My basic question is a Will sufficient or would BH folks recommend a Living Trust.


In my opinion, this could be risky. A lot of things can happen quickly and you may not have the window to make the changes. If you put provisions in your wills or trusts, then the risk is eliminated.

Perhaps the one to ask about estate documents and plans is your wife, since she would probably be the one most affected.

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Re: Will vs Living Trust

Post by RadAudit » Sat Apr 01, 2017 12:03 pm

Guardyourheart wrote:Everything my wife and I own is joint except for individual IRAs and beneficiary should cover that. If one of our kids dies before my wife or myself I would change my documents accordingly. My basic question is a Will sufficient or would BH folks recommend a Living Trust.


If the house is owned JTWROS with the wife when you die, the wife will become the 100% owner of the house. If it is also your intent that the kids get proceeds from the house after your wife dies, the way to do it is a will that transfers everything to the trust.
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Re: Will vs Living Trust

Post by Broken Man 1999 » Sat Apr 01, 2017 12:21 pm

Are you concerned about leaving the financial assets in your estate to your wife, who you state: " She is oblivious to financial matters and has no interest in learning..."

If so, join the crowd! My wife has zero interest in our financial affairs, as well. :oops:

You (and I) might benefit from a "spendthrift" trust. The aim is to support the remaining spouse, but with an eye to preserving the estate, also. If 100% of my estate is needed by my wife in her legit support, so be it. But, I'd like to rule out her selling everything, and heading to Vegas with a smooth talking financial advisor! :shock:

Broken Man 1999
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Oak&Elm
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Re: Will vs Living Trust

Post by Oak&Elm » Sat Apr 01, 2017 1:25 pm

Thanks broken man, I have no concerns my wife would anything reckless with our estate, she is a Godly women and is more frugil than myself. On the other hand she has mentioned she would just put everything in checking which in our case draws 0% so that is my only concern if there was one.

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Re: Will vs Living Trust

Post by Broken Man 1999 » Sat Apr 01, 2017 1:48 pm

Guardyourheart wrote:Thanks broken man, I have no concerns my wife would anything reckless with our estate, she is a Godly women and is more frugil than myself. On the other hand she has mentioned she would just put everything in checking which in our case draws 0% so that is my only concern if there was one.


Well, while I was kidding about my wife, the action of your wife possibly just throwing everything into a checking account likewise exposes your estate to unnecessary risks. Possibly (probably) the assets would not be earning the inflation rate, leaving your heirs with less, or possibly having your wife run out of funds in her retirement years after you pass.

I'm leaning toward a living trust with daughter as successor trustee, homed at Vanguard. I had an unexpected issue come up, so more research before meeting with our attorney.

Broken Man 1999
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Re: Will vs Living Trust

Post by Not Law » Sat Apr 01, 2017 2:10 pm

You want to preserve a $2,000,000 estate, and you are not comfortable paying 0.1% of it on professionals to assure this happens?

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Oak&Elm
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Re: Will vs Living Trust

Post by Oak&Elm » Sat Apr 01, 2017 2:57 pm

I may have to visit an estate lawyer to set up a trust. Even though I have PODs and all my accounts with beneficiaries and a DOD on my home I still got a feeling with 2MM a trust is a smart move.

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dm200
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Re: Will vs Living Trust

Post by dm200 » Sat Apr 01, 2017 3:05 pm

Guardyourheart wrote:I may have to visit an estate lawyer to set up a trust. Even though I have PODs and all my accounts with beneficiaries and a DOD on my home I still got a feeling with 2MM a trust is a smart move.


I would approch this in a somewhat different way. From this statement (and others), you seem to have made up your mind that:
1. PODs and beneficiaries (that you designated) are the way to go
2. The DOD on the home is the way to go
3. You should "set up a trust"

In your financial and family situation, I would consult an experienced estate planning attorney (impartial as to wills and trusts) and present to him/her my whole financial and family situation and ask for advice (and alternatives, if applcable).

It may very well be the case that your numbers 1,2 and 3 may not be the best for you and your family.

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Re: Will vs Living Trust

Post by celia » Sat Apr 01, 2017 3:45 pm

Guardyourheart wrote:I tried to set up a Lving Trust years ago but got bogged down trying to place assets in the Trust so went back to a simple Will, help please

This doesn't make sense or you were creating the trust incorrectly. The trust is created (documents created, signed, and notarized). Then assets are re-titled to the name of the trust instead of to you and your wife's name. Our lawyer had form letters where we filled in the custodian's name and address and account numbers, and just mailed them with a request for them to acknowledge the change. (The account title is changed on the next statement or online.)

One great thing about a marital trust, is that after you die, your spouse will continue to own the assets, but after she dies, they will go to the kids. If you don't own a trust, if your wife should re-marry after you die and owns the house and assets without the trust, do you want those assets to go to her new husband and his family should she die before the new husband? Get a trust, set up by a lawyer. (S)he will ask a lot of questions that you never considered, and you will likely be glad you did. (You don't have to answer the questions on the spot, but you and your wife can think about your choices and get back to the lawyer.) For example, since your wife isn't interested in finances, there should be a trustee who will be responsible for investing for you, should she not want to do it. You and she will need to decide who that should be. You will also need succeeding trustees in case the first person is unable to do it at that time.


dm200 wrote:
Guardyourheart wrote:Everything my wife and I own is joint except for individual IRAs and beneficiary should cover that. If one of our kids dies before my wife or myself I would change my documents accordingly. My basic question is a Will sufficient or would BH folks recommend a Living Trust.

In my opinion, this could be risky. A lot of things can happen quickly and you may not have the window to make the changes. If you put provisions in your wills or trusts, then the risk is eliminated.

For example, suppose you and a child are in a car accident and you are both taken to a hospital. Child dies one hour before you. Then what?

I also suggest you keep your eyes open for free seminars or dinners given by estate-planning lawyers to learn about what a trust is used for and what complications it can prevent. You and your wife should look at it as a learning experience. You don't have to use that lawyer to create a trust. But you SHOULD use a lawyer who specializes in estate planning, instead of a generic lawyer who doesn't specialize in it.

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Re: Will vs Living Trust

Post by CAsage » Sat Apr 01, 2017 5:10 pm

Be careful with free trust planning seminars, they will push you quickly into signing up with them. Consider some good books on wills and trusts and educate yourself on the choices (if you are so inclined, Nolo press has a few) - then get local references for a good estate lawyer! (or be prepared for dire warnings, gloom and doom sales pitch - I've seen people who don't need a trust get pushed into them).
In my opinion, you DO need a will AND a trust. Everyone should have a will, it is designed to cover everything that is not provided elsewhere (and all the good stuff should be covered elsewhere, but things change, accounts are overlooked, bills need to be paid etc). With a house, investments and a wife who is not interested in finance... Do you really mean to leave the house directly to the four kids? A good trust to manage the estate, hold the house for your wife and then pass it to your children, or sell it if needed, and a responsible successor trustee to oversee the investments for your wife, provide her the income and then pass to the children.... Yes, you need a good trust. And follow through retitling the assets - just the big ones, don't bother with checking accounts. Investments and house!
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Re: Will vs Living Trust

Post by bsteiner » Sat Apr 01, 2017 9:30 pm

See my response to your previous thread on this: viewtopic.php?f=2&t=213497&p=3278545#p3278545.

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Re: Will vs Living Trust

Post by Zott » Sat Apr 01, 2017 9:57 pm

I'll repeat something I said in an earlier thread---I set up a Living Trust for peace of mind. My situation is similar to yours, wife and (young) kids can't handle money. I set up the trust (it's the beneficiary of my IRA also) and provide income streams for the kids over a long period. There's a QTIP (marital) trust established which provides income for my wife, principal to go to kids' trusts at her death. Our home is still owned jointly, however.
I feel that I've got everything there I want and the assets are where they need to be after my death. I can now stop worrying about it. This might work for you too. I used an estate attorney to set this up.

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Re: Will vs Living Trust

Post by tibbitts » Sat Apr 01, 2017 10:15 pm

I am not a lawyer or an expert but have recent personal experience with this. Unless you have some specific complications that require a trust, you should think twice (or more!) before creating one. My mother had a trust that originally had a purpose, but over the years it could/should have gone away, and that would have made things easier and less expensive for me when she passed. A lot does depend on your state laws - states that let you title various property (vehicles, real estate) as transfer-on-death, combined with pay-on-death for financial assets, make things much simpler. Particularly if you can get the estate down to well below your state's threshold for formal probate, that will make a will pretty easy to deal with.

I'm not saying a trust isn't necessary for complicated situations, but a spouse "not interested" in finances isn't a complicated situation.

On the other hand, I seriously you aren't considering leaving a house to four kids. What a potential disaster. There are any number of other ways to deal with that.

Even if you have a lot of what-ifs in your will/trust/whatever, situations will change and so you have to keep up with that. If you have something that's complicated and/or expensive to change, you may be less likely to do frequent updates.

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Re: Will vs Living Trust

Post by rralex1 » Sun Apr 02, 2017 8:50 am

Our parents spent several years educating our family about their wishes, and they put together a revocable trust about 10 years before they passed.

Life reared it's head and both parents passed with unexpected complications including diminishing capacity issues, as well as other things that were not part of the "plan". I was extremely grateful that they had very specific instructions in place and in the trust. Also that I personally knew the attorney and paralegals at the elder law firm that helped them develop the trust. As contingent trustee with POA's, I was able to ask them many questions over the couple of years that preceded and then followed our parents passing. Their counsel was invaluable.

Our parents were extremely frugal as well. Children of the depression. Believe it. This part of their life was important enough that they chose not to skimp on it. It was a very big deal, and in relative terms they came to realize that the cost was a drop in the bucket. I'm with the others who recommend that you seek counsel with an elder law attorney, develop a relationship, and solidify a trust, so that your wife (and perhaps your kids - whomever you specify) can have a source that can give you and or her counsel when "needed", and to ensure that both your wishes are very clearly followed.

Wishing you well.

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dm200
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Re: Will vs Living Trust

Post by dm200 » Sun Apr 02, 2017 8:52 am

On the other hand, I seriously you aren't considering leaving a house to four kids. What a potential disaster. There are any number of other ways to deal with that.


I agree. In my opinion, much better to have the house in the estate assets and then the proceeds of the sale of the house can go in equal shares to the heirs. If, for some reason, any of the heirs want the house - I believe the executor ot trustee can either sell it to them or rearrange distribution of the estate assets in an equitable way. Having four folks decide and accomplish handling the house with each owning 1/4 is likely to be a mess.

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Re: Will vs Living Trust

Post by gasdoc » Sun Apr 02, 2017 9:00 am

1210sda wrote:
Guardyourheart wrote:Everything my wife and I own is joint except for individual IRAs and beneficiary should cover that. If one of our kids dies before my wife or myself I would change my documents accordingly. My basic question is a Will sufficient or would BH folks recommend a Living Trust.


As stated above, you already have it set up to avoid probate. So if that's all you want, you are already there.

If you wife will need help with management of the portfolio, you could set up a trust, or hire VPAS (for only 0.3%) or, you could use either Target Date funds or a lifestrategy fund.

If you want asset protection, then you might want to consider a trust.

1210


Might consider using Vanguard advisory services now while you are living, if you think time is reasonably short, to make the transition easier. Nothing to change then.

gasdoc

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Re: Will vs Living Trust

Post by Sandtrap » Sun Apr 02, 2017 9:18 am

Guardyourheart wrote:Everything my wife and I own is joint except for individual IRAs and beneficiary should cover that. If one of our kids dies before my wife or myself I would change my documents accordingly. My basic question is a Will sufficient or would BH folks recommend a Living Trust.

Sounds like a "will is sufficient" in your case, however. . . . the greater the wealth and more complex the family dynamics, the more one should consider a "trust" and/or other strategies. Consult with various estate legal counsel while keeping in mind the objective for many of them is to "sell a trust package". Also, many "trust packages" include a will in my experience. (not an expert)
+1 on using Vanguard VPAS.
Not a financial expert - just a retired businessman hacking out of a sand trap -- again.

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Re: Will vs Living Trust

Post by afan » Sun Apr 02, 2017 12:24 pm

So far you have not mentioned anything that would require a trust. But not much detail.

The major advantage of a trust would manifest while you are alive. If you become incapacitated and need someone else to manage affairs for you, you may discover how difficult (or impossible) it can be to get companies to honor a valid durable power of attorney. But they are much more willing to work with a trustee.

If it is true that you have everything joint except retirement accounts then you may be set. Often people say this when it is not true and your comments about POD make me wonder whether it accurately describes your situation.

It also is not clear whether you own your home jointly with your spouse, in which case it would not go to your kids if you dies first or if you are the sole owner and mean to leave the house to the kids. The latter would be a strange thing to do.

If both parents die before the last child grows up then someone needs to look after the kids and the money they will inherit. Presumably this is addressed in your will. A trustee could handle the finances and could be the same person as the guardian.

If bsteiner already answered, I would start by doing whatever he said.

With minor children involved I would definitely run your plan past a good estate attorney. It does not sound like you are an attorney at all so I caution you that a lot of legal language does not mean what we lay people thinks it means. It is amazingly easy for a lay person to screw up and not know it. Then your mess lands on someone to sort out on behalf of your orphaned kids.

It is great to educate yourself first and bsteinr seems willing to help. But get a lawyer before you sign any documents.
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Re: Will vs Living Trust

Post by Ben10 » Sun Apr 02, 2017 12:51 pm

Guardyourheart wrote: I have avoided going to an estate lawyer because I think I can do this myself and I'm a penny pincher.


Wow! :shock: That is an amazing quote. You're taking this BH "do-it-yourself" stuff too seriously. A good estate planning attorney is experienced in reviewing your asset ownership, considering your goals, taking into account taxes and other costs, and recommending and implementing an appropriate plan. You are obviously not too concerned with making things easy for your wife or you wouldn't be so foolish about seeking the advice of a professional.

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Re: Will vs Living Trust

Post by tibbitts » Sun Apr 02, 2017 1:18 pm

Ben10 wrote:
Guardyourheart wrote: I have avoided going to an estate lawyer because I think I can do this myself and I'm a penny pincher.


Wow! :shock: That is an amazing quote. You're taking this BH "do-it-yourself" stuff too seriously. A good estate planning attorney is experienced in reviewing your asset ownership, considering your goals, taking into account taxes and other costs, and recommending and implementing an appropriate plan. You are obviously not too concerned with making things easy for your wife or you wouldn't be so foolish about seeking the advice of a professional.

The premise of this forum is that most people are capable of educating themselves to the point of being their own financial adviser, tax preparer, etc. so I'm not sure it's entirely reasonable to apply a different logic to basic estate planning. The problem with hiring a "good" financial adviser isn't unlike that of hiring a "good" attorney: if you know enough to recognize a "good" estate planning attorney, you probably know enough to do at least a simple case yourself.

But it's like with taxes: doing your own with some W2 and investment income is one thing. Doing your own when you operate seven businesses, two non-profits, and have tens of millions of dollars involved would be something else. So obviously some people need professionals.

Of course, not everyone wants to learn about even basic investing, tax prep, or estate planning. And they should seek professional help. But we have to recognize that finding a "good" person to help with those things is going to be mostly luck. You may avoid some truly horrible choices by research, but thinking you're going to definitely find someone "good" through any reasonable amount of research? That seems unlikely.

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Re: Will vs Living Trust

Post by carruthers209 » Mon Apr 03, 2017 1:24 am

If you set up a revocable living trust with a good estate planning attorney it will probably cost you about $2,000. If you fail to set up every single item-all your financial accounts, real estate, possible tangible assets, insurance policies, portfolio accounts, etc. correctly, you could cause your wife to have to go through probate and worse through your lack of knowledge and attention to beneficiary details and titling. Are you aware that when a person dies, the power of attorney immediately dies with you? If you and your wife die together who will pay your bills? No one can pay your bills if you haven't made them beneficiaries on your checking account (TOD) and then there is that death certificate that can take up to a month to become issued-it's required for virtually every financial account you have- Please see an estate planning attorney who can do this correctly for your wife and children-they will thank you. Revocable living trusts can make handling all the legal requirements of your estate during a time of grief a lot easier and less stressful.

TBillT
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Re: Will vs Living Trust

Post by TBillT » Mon Apr 03, 2017 1:23 pm

We are in somewhat similar position to the OP.
I just told my wife not to call the lawyer.
We were going to tell the lawyer we wanted will, not the trust.
Really a lot of conflicting opinions on this issue.

bsteiner
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Re: Will vs Living Trust

Post by bsteiner » Mon Apr 03, 2017 2:50 pm

We do revocable trusts where there's a reason to do so in a given case, or where someone lives in a state where probating a Will or dealing with the court is difficult, expensive or burdensome. They're common in California for reasons specific to California. Neither the original poster nor TBillT has provided any information that would indicate whether it would make sense in his/her case.

However, there are far more important issues to consider.

Guardyourheart wrote:... Currently I have a Will in place and a Deed on Death form to cover the transfer of my home to my 4 kids. ... Both my wife and I are upper 50's but I have some concerning health issues. If I pass I want to make it as easy as possible on my wife, thus the Will vs Trust dilemma. She is oblivious to financial matters and has no interest in learning. Our home is worth about $500k and investments about $1.5M. Any advice would be appreciated. ...


If she's "oblivious to financial matters and has no interest in learning," then perhaps you might want to provide for her (either in your Will, or in a revocable trust if there's some reason for you to create a revocable trust) in trust rather than outright.

If you have $2 million and 4 children, each child's share will be $500,000 (based on the assets you currently hold). That's sufficient for you to provide (either in your Will, or in a revocable trust if there's some reason for you to create a revocable trust) in separate trusts for their benefit rather than outright.

Guardyourheart wrote:... I have avoided going to an estate lawyer because I think I can do this myself and I'm a penny pincher. I tried to set up a Living Trust years ago but got bogged down trying to place assets in the Trust so went back to a simple Will


tibbitts wrote:... The premise of this forum is that most people are capable of educating themselves to the point of being their own financial adviser, tax preparer, etc. so I'm not sure it's entirely reasonable to apply a different logic to basic estate planning. The problem with hiring a "good" financial adviser isn't unlike that of hiring a "good" attorney: if you know enough to recognize a "good" estate planning attorney, you probably know enough to do at least a simple case yourself. ....


Perhaps you could do it yourself if it's simple, though you would first have to ascertain that it's simple. The difficulty is that you don't know what it is that you don't know. It would be like me trying to figure out how to fill a cavity in a tooth.

CAsage wrote:Be careful with free trust planning seminars, they will push you quickly into signing up with them. ...


If you go to the free dinner seminar, and you're the one who buys the annuity, the living trust, the timeshare, or the bridge, not only did you pay for your free dinner, but you paid for the free dinners for everyone else in the room.

A good way to run up a very large legal fee is to get a free will from the group plan, or to buy a trust from a free dinner seminar promoter. We've had several such estates, and there were lots of problems in each one.

Afull
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Re: Will vs Living Trust

Post by Afull » Mon Apr 03, 2017 5:24 pm

bsteiner wrote:
tibbitts wrote:... The premise of this forum is that most people are capable of educating themselves to the point of being their own financial adviser, tax preparer, etc. so I'm not sure it's entirely reasonable to apply a different logic to basic estate planning. The problem with hiring a "good" financial adviser isn't unlike that of hiring a "good" attorney: if you know enough to recognize a "good" estate planning attorney, you probably know enough to do at least a simple case yourself. ....


Perhaps you could do it yourself if it's simple, though you would first have to ascertain that it's simple. The difficulty is that you don't know what it is that you don't know. It would be like me trying to figure out how to fill a cavity in a tooth.
CAsage wrote:Be careful with free trust planning seminars, they will push you quickly into signing up with them. ...


If you go to the free dinner seminar, and you're the one who buys the annuity, the living trust, the timeshare, or the bridge, not only did you pay for your free dinner, but you paid for the free dinners for everyone else in the room.

A good way to run up a very large legal fee is to get a free will from the group plan, or to buy a trust from a free dinner seminar promoter. We've had several such estates, and there were lots of problems in each one.


I thought bsteiner's comments were worth re iterating. And if you're a chronic diy'er there are utube videos on how to fill your own cavitiies...not for me though.

Regarding the trust vs. will one reason for a trust that I didn't see mentioned is incapacity and you said your health is declining.

My impression is you did not have a very good estate attorney for your trust. We've had three over the last 30 years or so and they should give you a significant amount of info as to what to do now and later. Our last attorney even gave us 6 months for phone calls to ask questions for free.

He asked us a lot of questions and we asked him a lot of questions and also discussed our concerns (more extensive than yours).

Regardless of the trust vs. will your wife is like mine. I have it set so that if I loose capacity/life she has someone to go to to take over. Sure she will be paying a fee, but it's inconsequential compared to opportunity cost, mistakes made. Just think if you don't know to do an RMD in a given year the IRS penalty is only 50%, yes fifty.

Also with regards to pinching penneys trying to get by with a will when a trust is appropriate it's not really costing you or your wife anything, it's costing your kids. Likely you and your wife will not spend it all so the kids get a little bit less in the end.

So one math problem. Doubling someones $2k est for a trust it is; 4k / (500k+1500k) *100 = 0.002% of assets for a trust if it would have been appropriate.

I'm not recommending that you need a trust you need to figure that out. Our county had two 3-4 hour classes taught by an estate attorney free to Sr's otherwise $20 to others. We attended that supplemented with internet research over 2-3 months. Also most state govt's have a website on the subject.

A final note, we had a bad experience with our 2nd attorney. Be sure and read the whole document including the "boiler plate: stuff to see that it does what you wanted. We had major errors when the assistant typed in the changes and had to modify the trust after only a week...trust but verify.

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Re: Will vs Living Trust

Post by tibbitts » Mon Apr 03, 2017 10:27 pm

Regarding the trust vs. will one reason for a trust that I didn't see mentioned is incapacity and you said your health is declining.

I don't know that it makes sense for PoAs and trusts to be treated as differently as they apparently are in this regard, but that seems to be the case. Seemingly everybody respects trusts and nobody respects PoAs.

Having said that I'm choosing to battle it out on the PoA front for now - and it is a seemingly never-ending battle - rather create a trust. My case is seemingly simple: I have one person I want to be able to act as me in absolutely every aspect of my financial life. Not only if I'm incapacitated or dead, because I don't want her to have to prove those things to anybody. And that's more difficult to accomplish than I'd thought it would be.

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Re: Will vs Living Trust

Post by Afull » Mon Apr 03, 2017 10:42 pm

tibbitts wrote:
Regarding the trust vs. will one reason for a trust that I didn't see mentioned is incapacity and you said your health is declining.

I don't know that it makes sense for PoAs and trusts to be treated as differently as they apparently are in this regard, but that seems to be the case. Seemingly everybody respects trusts and nobody respects PoAs.

Having said that I'm choosing to battle it out on the PoA front for now -


Fyi, the battle is not fought by you it's fought by the person who you designate to be your PoA. Trusts and PoA's each have their own place and an estate attorney can help for your specific situation.

I think the majority of people consider the cost and hassle of the estate plan to themselves, but in the end you won't be there to guide them. Always consider the ability of the people you designate to be PoA, executor, trustee, etc.

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Re: Will vs Living Trust

Post by tibbitts » Mon Apr 03, 2017 10:58 pm

carruthers209 wrote:If you set up a revocable living trust with a good estate planning attorney it will probably cost you about $2,000. If you fail to set up every single item-all your financial accounts, real estate, possible tangible assets, insurance policies, portfolio accounts, etc. correctly, you could cause your wife to have to go through probate and worse through your lack of knowledge and attention to beneficiary details and titling. Are you aware that when a person dies, the power of attorney immediately dies with you? If you and your wife die together who will pay your bills? No one can pay your bills if you haven't made them beneficiaries on your checking account (TOD) and then there is that death certificate that can take up to a month to become issued-it's required for virtually every financial account you have- Please see an estate planning attorney who can do this correctly for your wife and children-they will thank you. Revocable living trusts can make handling all the legal requirements of your estate during a time of grief a lot easier and less stressful.

Having just gone through this I don't believe the trust made handling things less complicated for me, with the exception of real estate. So let's say that if the state involved allowed transfer-on-death for real estate, it wouldn't have been close: handling things would have been vastly simpler without a trust. I'd be tempted to say that if the state had transfer-on-death for motor vehicles that would have helped, but in fact except for waiting in line (of course!), transferring ownership of the vehicle (it wasn't in the trust) was entirely trivial - almost frighteningly so. The vehicle situation matters though, because in some states the value of a more-valuable car than in this case, all by itself, could have triggered formal probate. Ugh.

As a practical matter, nobody magically locks your accounts the second you die. Maybe in theory that should happen but it simply doesn't. Someone can still use your money to pay your bills, etc. almost indefinitely, and undeniably long enough to get account ownership changed with the necessary paperwork.

I think the most difficult situation would be where your estate may depend upon someone you don't trust unconditionally. I haven't dealt with that situation but I can see where it would infinitely complicate things.

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Re: Will vs Living Trust

Post by tibbitts » Mon Apr 03, 2017 11:06 pm

Afull wrote:
tibbitts wrote:
Regarding the trust vs. will one reason for a trust that I didn't see mentioned is incapacity and you said your health is declining.

I don't know that it makes sense for PoAs and trusts to be treated as differently as they apparently are in this regard, but that seems to be the case. Seemingly everybody respects trusts and nobody respects PoAs.

Having said that I'm choosing to battle it out on the PoA front for now -


Fyi, the battle is not fought by you it's fought by the person who you designate to be your PoA. Trusts and PoA's each have their own place and an estate attorney can help for your specific situation.

I think the majority of people consider the cost and hassle of the estate plan to themselves, but in the end you won't be there to guide them. Always consider the ability of the people you designate to be PoA, executor, trustee, etc.

Well, right now the battle is definitely being fought by me in terms of getting all the institutions involved to recognize my PoA. Generally that means setting up a separate PoA that meets each one's requirements. Ugh.

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Re: Will vs Living Trust

Post by S&L1940 » Mon Apr 03, 2017 11:13 pm

Like others I have a dear wife who does not want to take on the financial minutiae
Any time she has trouble sleeping I simply would start explaining the online bill paying process (including passwords), how she should manage the assets, and managing the revocable trust we set up. Bingo, she is asleep in a few minutes.
Something else to consider, how assets are distributed if a child predeceases you; pass onto the spouse or perhaps directly to their children? Or, what if the dear wife dies first?
As others suggested, get a lawyer, especially one who is practicing in your state.
Good luck and a long life...
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Re: Will vs Living Trust

Post by tibbitts » Mon Apr 03, 2017 11:31 pm

S&L1940 wrote:As others suggested, get a lawyer, especially one who is practicing in your state.

Umm... what other kind would you get? Hopefully a lawyer wouldn't let you hire him/her if he/she wasn't licensed in your state.

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Re: Will vs Living Trust

Post by TBillT » Fri Apr 07, 2017 11:19 am

bsteiner wrote: They're common in California for reasons specific to California. Neither the original poster nor TBillT has provided any information that would indicate whether it would make sense in his/her case.

However, there are far more important issues to consider.


Thank you bsteiner.
We have a fairly simple case 2 grown children decent IRA/assets in Fido/VG and a home but below the $5M estate tax. State is Virginia which has recently allowed home to be Transfer on Death, so if we did that it would get out of the probate. But our attorney is recommending the trust approach, which seems hard for us to justify at the moment. The main rationale cited is total avoidance of "problematic" probate.

One benefit mentioned for the trust is privacy of the finances by total avoidance of probate, which is slightly attractive. I am confused, what becomes public in probate? If we have a relatively small amount of our assets go into probate, does that mean the whole picture including what avoids probate (due to beneficiary designations etc) get's publicized? I do not think I have an issue with a small amount of assets being publicized re: probate, but the comprehensive asset transfer picture might be nice to hide.

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Re: Will vs Living Trust

Post by afan » Fri Apr 07, 2017 6:32 pm

I would be interested in bsteiner's answer, but for the vast majority of us it is hard to believe the privacy matters. Unless you are a celebrity, who is going to be interested enough in your will to look it up?
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Re: Will vs Living Trust

Post by NotWhoYouThink » Fri Apr 07, 2017 6:40 pm

afan wrote:I would be interested in bsteiner's answer, but for the vast majority of us it is hard to believe the privacy matters. Unless you are a celebrity, who is going to be interested enough in your will to look it up?


The creditors of your heirs? Not just the deceased, but the heirs' names are available on public web sites in my state, along with the size of the probated estate. The assets that passed in trust are not listed.

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Re: Will vs Living Trust

Post by dm200 » Fri Apr 07, 2017 7:22 pm

NotWhoYouThink wrote:
afan wrote:I would be interested in bsteiner's answer, but for the vast majority of us it is hard to believe the privacy matters. Unless you are a celebrity, who is going to be interested enough in your will to look it up?

The creditors of your heirs? Not just the deceased, but the heirs' names are available on public web sites in my state, along with the size of the probated estate. The assets that passed in trust are not listed.


Yes, I believe probated wills can be public information. They don't do it any more, but my small hometown newspaper used to print information about the wills of folks who had died.

All this being true about wills, there is another aspect to privacy and living trusts. Depending on the details of what you want to do in placing assets in a trust, opening accounts in the name of the trust and doing things as trustee, etc. you may need to supply certain information about your situation that you want to remain private. There may also be a "perception" that someone who has a trust or has assets in a trust is "wealthy" or is "wealthier" than someone who does not use a trust.

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Re: Will vs Living Trust

Post by Peter Foley » Fri Apr 07, 2017 10:00 pm

I too live in MN and struggle a bit with the will versus trust issue. In Minnesota the estate you describe will pass to the wife without any estate tax nor probate if you have everything titled corrected and have beneficiaries payable on death or transfer on death on all accounts. I have been told by estate planning attorneys in Minnesota that "probate" in and of itself is not onerous in Minnesota.

At the level of assets you describe, there are, at a minimum, two considerations which I think would be important. 1) If your wife has no interest nor skill in managing the family finances, can they be set up simply enough so no particular skill is needed? (Think target retirement funds not a slice and dice approach to asset allocation.) Or is there some family member you would trust to manage things on her behalf so that she does not need a non family member trustee to professionally manage her assets? 2) Assuming that you wife would want to continue to live in your current house, will the $1.5 million be needed to support her? If yes, note that MN does not have portability when it comes to the estate tax. (The surviving spouse can not use exemptions not used by the decedent. If there were portability, the effect would be that a $4.0 M estate would be exempt, but that's not the case.) So if your wife needs all the assets and you expect those assets to grow, a trust would be a way to keep those assets in the family when the surviving spouse dies. If she doesn't need all the assets, listing your children as beneficiaries to a few accounts might be sufficient to avoid estate taxes.

If I were you, and paying estate taxes is your primary concern, I would wait until the end of this legislative session. Go to the state reviser's office website and look at Senate File 354. It is a bipartisan bill to have the MN estate tax laws conform to the federal estate tax law. Note the bill's authors.

There are many other things to consider. I have a lot of information on this topic as it relates to Minnesota. PM me if you are interested.

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Re: Will vs Living Trust

Post by bsteiner » Sun Apr 09, 2017 10:04 am

TBillT wrote:
bsteiner wrote: They're common in California for reasons specific to California. Neither the original poster nor TBillT has provided any information that would indicate whether it would make sense in his/her case.

However, there are far more important issues to consider.


Thank you bsteiner.
We have a fairly simple case 2 grown children decent IRA/assets in Fido/VG and a home but below the $5M estate tax. State is Virginia which has recently allowed home to be Transfer on Death, so if we did that it would get out of the probate. But our attorney is recommending the trust approach, which seems hard for us to justify at the moment. The main rationale cited is total avoidance of "problematic" probate. ....


There's more to do with the courts on an estate in Virginia than in some states, but less than in some states.

I think you should focus more on the substantive provisions (who gets what) than on the form (whether to do it in your Will or in a revocable trust). For example, you may wish to consider providing for your children in separate trusts (either under your Will or in a revocable trust), to keep their inheritances out of their estates for estate tax purposes, and to protect their inheritances from their creditors and spouses.

afan wrote:I would be interested in bsteiner's answer, but for the vast majority of us it is hard to believe the privacy matters. Unless you are a celebrity, who is going to be interested enough in your will to look it up?


I had two cases where clients created revocable trusts for privacy.

One male client who was a public figure wanted to leave bequests to several female friends. He created a separate revocable trust just for these bequests. In his Will, he left a dollar amount to that trust. Then, in that trust, he said how that amount would be divided among those friends. The rest of his estate plan was in his Will.

The other client controlled a small thinly-traded public company. He wanted to make some provisions for the key employee who was running the day-to-day operations but he didn't want competitors to know about it. So he created a revocable trust.

If you're not a celebrity it's unlikely that many people, or the newspapers, will be interested in your Will. Even if you are a celebrity, your Will may not be of much interest to anyone. Most people's Wills provide for their spouse and children in a fairly conventional manner.

I've written articles on the Wills of about a dozen celebrities who've died in the last few years. Unless they're in California where revocable trusts are commonly used, most celebrities don't seem to care about keeping their estate plans private. Indeed, perhaps they want the publicity.

Peter Foley wrote:I too live in MN and struggle a bit with the will versus trust issue. ... I have been told by estate planning attorneys in Minnesota that "probate" in and of itself is not onerous in Minnesota. ...


Minnesota is a Uniform Probate Code state, which means that the procedures are simplified. So there are more important things for you to struggle with, or at least consider.

In particular, the Minnesota estate tax exempt amount is $1.8 million, and is scheduled to increase to $2 million in 2018; and Minnesota allows state-only QTIP elections. So you'll have to consider how to deal with that. This, of course, is not unique to Minnesota.

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Re: Will vs Living Trust

Post by S&L1940 » Tue May 02, 2017 2:49 pm

tibbitts wrote:
S&L1940 wrote:As others suggested, get a lawyer, especially one who is practicing in your state.

Umm... what other kind would you get? Hopefully a lawyer wouldn't let you hire him/her if he/she wasn't licensed in your state.

transplants like us could have a tendency to continue using a (former) home state lawyer which could be a problem if the lawyer does not know enough to send their (former) client back south...
Don't it always seem to go * That you don't know what you've got * Till it's gone

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Re: Will vs Living Trust

Post by bsteiner » Tue May 02, 2017 3:08 pm

S&L1940 wrote:
tibbitts wrote:
S&L1940 wrote:As others suggested, get a lawyer, especially one who is practicing in your state.

Umm... what other kind would you get? Hopefully a lawyer wouldn't let you hire him/her if he/she wasn't licensed in your state.

transplants like us could have a tendency to continue using a (former) home state lawyer which could be a problem if the lawyer does not know enough to send their (former) client back south...


Your profile says you're in Florida.

Florida requires that a personal representative be either a relative or a Florida resident. When a Florida client's first choice for personal representative isn't either a relative or a Florida resident, we'll often do a revocable trust. Other than that, we generally don't do revocable trusts for Florida clients, since probating a Will in Florida is not particularly difficult, expensive or burdensome.

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Re: Will vs Living Trust

Post by S&L1940 » Tue May 02, 2017 4:34 pm

bsteiner wrote:
S&L1940 wrote:
tibbitts wrote:
S&L1940 wrote:As others suggested, get a lawyer, especially one who is practicing in your state.

Umm... what other kind would you get? Hopefully a lawyer wouldn't let you hire him/her if he/she wasn't licensed in your state.

transplants like us could have a tendency to continue using a (former) home state lawyer which could be a problem if the lawyer does not know enough to send their (former) client back south...


Your profile says you're in Florida.

Florida requires that a personal representative be either a relative or a Florida resident. When a Florida client's first choice for personal representative isn't either a relative or a Florida resident, we'll often do a revocable trust. Other than that, we generally don't do revocable trusts for Florida clients, since probating a Will in Florida is not particularly difficult, expensive or burdensome.

according to our (Florida) lawyer, probate does get expensive - our trustees are relatives and Florida residents. forgot the numbers yet probate not something we would want to burden our heirs with.
Don't it always seem to go * That you don't know what you've got * Till it's gone

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Re: Will vs Living Trust

Post by bsteiner » Tue May 02, 2017 4:51 pm

S&L1940 wrote:... according to our (Florida) lawyer, probate does get expensive - our trustees are relatives and Florida residents. forgot the numbers yet probate not something we would want to burden our heirs with.


We probate lots of Wills throughout Florida. It's neither expensive nor a burden. It's a small part of the work involved in the estate administration.

It involves sending in the Will, a death certificate, and some forms, publishing a notice to creditors, and paying a filing fee. The forms are filed electronically. The filing fee is about $400. The cost of publishing the notice to creditors varies depending on the county, but it's not very much.

There's also a cost to creating a revocable trust and transferring assets to the revocable trust; and as often as not if someone creates a revocable trust, his/her Will has to be probated anyway (though as set forth above that's generally not expensive or burdensome).

The more important issue is whether the substantive provisions of your Will or revocable trust are tax-efficient and protect your beneficiaries' inheritances against their creditors and spouses. You should pay more attention to these substantive issues than to the procedural issues.

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Re: Will vs Living Trust

Post by tech_arch » Tue May 02, 2017 6:49 pm

bsteiner wrote:Florida requires that a personal representative be either a relative or a Florida resident. When a Florida client's first choice for personal representative isn't either a relative or a Florida resident, we'll often do a revocable trust. Other than that, we generally don't do revocable trusts for Florida clients, since probating a Will in Florida is not particularly difficult, expensive or burdensome.

We're in Florida and working on our plan. We have two underage children so I assumed a trust would be beneficial to keep things moving smoothly (and to avoid creating one for our assets after passing.) Is my assumption correct?

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