California folks - Will/trust still needed with POD & TOD?

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prackmatic
Posts: 6
Joined: Sun May 06, 2018 11:48 pm
Location: Bay Area, CA

California folks - Will/trust still needed with POD & TOD?

Post by prackmatic » Sun May 13, 2018 2:11 am

Howdy Bogleheads - longtime lurker here. I recently signed up for Hyatt Legal Plans through my employer - wanted to finally get around to creating a will (or trust), power of attorney, and living will. Going the DIY route would have been easier, but I've seen that most BHs seem to recommend going to a real attorney for this kind of stuff. I recently stumbled across some threads regarding POD/TOD and that got me thinking - do I really need to craft a will/trust?

Me:

-Single, 30s, located in California (bad probate process)
-Assets spread across checking, savings, stock, retirement accounts (401K/IRA)
-Homeowner, but we have a joint tenancy (I don't believe you can pass your share to any heirs)
-Beneficiaries would be parents and siblings
-Besides that, nothing too complicated

Future:

-I may want to buy real estate in down the road (likely not a joint tenancy like current home)
-Beneficiaries could possibly change over time

If all my financial accounts list my beneficiaries, can I just get away without having a will/trust? Or, should I still have at least a simple will to make sure all my bases are covered and to also cover loose ends like my car? I would still need to get a living will/POA. I'd like to opt for the combination of best planning/ease/cost effectiveness (don't we all). Would love to hear everyone's advice, though this may be more California specific due to our complexities.

Main questions:

-Do I need a will/trust? If yes, which one?
-Based on my situation, would you recommend DIY for any of the legal documents mentioned?

Thank you BHs :happy

afan
Posts: 3888
Joined: Sun Jul 25, 2010 4:01 pm

Re: California folks - Will/trust still needed with POD & TOD?

Post by afan » Sun May 13, 2018 9:25 am

I imagine there can be situations simple enough that DIY is fine. They would probably apply when you did not really care what happened at your death: no human heirs, any assets to go to a charity, let them figure it out.

With a spouse there are enough complications that I would want more certainty.

Having everything in POD TOD is a terrible idea. You will probably have final expenses. If everything is in some sort of POD designation there will be no money for your executor to pay your bills. That will force your executor to chase the beneficiaries to get some of that money back. This is a hassle created by the, misguided, belief that everything TOD simplifies the process.

Rumor has it that CA probate is onerous and a living trust is better. You might start with a simple living trust, having any non retirement assets titled in the name of the trust and take it from there. As your life becomes more complicated you could amend the trust to meet you changing needs.
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GAAP
Posts: 647
Joined: Fri Apr 08, 2016 12:41 pm

Re: California folks - Will/trust still needed with POD & TOD?

Post by GAAP » Sun May 13, 2018 9:50 am

afan wrote:
Sun May 13, 2018 9:25 am
Rumor has it that CA probate is onerous and a living trust is better. You might start with a simple living trust, having any non retirement assets titled in the name of the trust and take it from there. As your life becomes more complicated you could amend the trust to meet you changing needs.
This is what my mom did -- plus a will for anything that somehow got missed. Settling this was easy, since the estate was under the limits and could use the simplified process. The process if there had been no will would have been much more involved.

There are some things you need to do. IF you create a living trust and IF you add all of your assets to it and IF you add all future assets to it and IF you act as a trustee for those assets, then this method works. If you don't do all of those things, then assets end up in probate anyway.

stan1
Posts: 6012
Joined: Mon Oct 08, 2007 4:35 pm

Re: California folks - Will/trust still needed with POD & TOD?

Post by stan1 » Sun May 13, 2018 10:36 am

The California small estate limit is $150K but a trust with a pour over will is common to cover car, household possessions and miscellaneous accounts.

You have not stated how you plan to handle the property you jointly own (sounds like with a non-married partner, business or otherwise). If you are not leaving your share of the property to your partner you'd want to work with an attorney to sort that out if you didn't do so at the time you bought it. I'd establish terms for disposing of the property if one of you passes away or wants to sell now -- but give the co-owner and you/your executor the option of changing those terms if both agree. Difficult to predict what might happen so I'd want to have ground rules set but keep open to the idea of a negotiation if its mutually beneficial.

prackmatic
Posts: 6
Joined: Sun May 06, 2018 11:48 pm
Location: Bay Area, CA

Re: California folks - Will/trust still needed with POD & TOD?

Post by prackmatic » Sun May 13, 2018 3:06 pm

Thanks all for the responses so far.

@afan: My executor would likely also be one of my beneficiaries (keeping this within all within my core family - i.e. parents, siblings).
@GAAP: Seems like another vote for living trust + will to cover all corners. Appreciate the reminder that steps need to be followed A-Z.
@stan1: Regarding the property we have that's joint tenancy - it's owned by several members of our family (4 of us). If I die, my share will be dispersed among the remaining people. However, I am the youngest of the 4 - assuming I don't die early, I would most likely be the remaining holder of the property. Assuming it gets to that point, I will need to adjust my estate planning.

So far...

Sounds like I should go with a living trust + a simple will. Still a good idea to list beneficiaries on all my financial accounts. I'm also getting the vibe to avoid DIY, despite not being in a very complex situation.

viz
Posts: 135
Joined: Fri May 04, 2018 11:22 pm

Re: California folks - Will/trust still needed with POD & TOD?

Post by viz » Sun May 13, 2018 5:21 pm

prackmatic wrote:
Sun May 13, 2018 2:11 am
Howdy Bogleheads - longtime lurker here. I recently signed up for Hyatt Legal Plans through my employer - wanted to finally get around to creating a will (or trust), power of attorney, and living will. Going the DIY route would have been easier, but I've seen that most BHs seem to recommend going to a real attorney for this kind of stuff. I recently stumbled across some threads regarding POD/TOD and that got me thinking - do I really need to craft a will/trust?

Me:

-Single, 30s, located in California (bad probate process)
-Assets spread across checking, savings, stock, retirement accounts (401K/IRA)
-Homeowner, but we have a joint tenancy (I don't believe you can pass your share to any heirs)
-Beneficiaries would be parents and siblings
-Besides that, nothing too complicated

Future:

-I may want to buy real estate in down the road (likely not a joint tenancy like current home)
-Beneficiaries could possibly change over time

If all my financial accounts list my beneficiaries, can I just get away without having a will/trust? Or, should I still have at least a simple will to make sure all my bases are covered and to also cover loose ends like my car? I would still need to get a living will/POA. I'd like to opt for the combination of best planning/ease/cost effectiveness (don't we all). Would love to hear everyone's advice, though this may be more California specific due to our complexities.

Main questions:

-Do I need a will/trust? If yes, which one?
-Based on my situation, would you recommend DIY for any of the legal documents mentioned?

Thank you BHs :happy
If you have the same plan as my employer (provider is the same), it should not cost you anything. The only money we paid was transfer of title to our trust. We got living trust, will, health directive and end of life directive. Have you talked to a lawyer and asked about what it will cost you? Not sure why you would not want to take advantage of service you are already signed up for. Thanks

Carefreeap
Posts: 2415
Joined: Tue Jan 13, 2015 7:36 pm
Location: SF Bay Area

Re: California folks - Will/trust still needed with POD & TOD?

Post by Carefreeap » Sun May 13, 2018 10:21 pm

afan wrote:
Sun May 13, 2018 9:25 am
I imagine there can be situations simple enough that DIY is fine. They would probably apply when you did not really care what happened at your death: no human heirs, any assets to go to a charity, let them figure it out.

With a spouse there are enough complications that I would want more certainty.

Having everything in POD TOD is a terrible idea. You will probably have final expenses. If everything is in some sort of POD designation there will be no money for your executor to pay your bills. That will force your executor to chase the beneficiaries to get some of that money back. This is a hassle created by the, misguided, belief that everything TOD simplifies the process.

Rumor has it that CA probate is onerous and a living trust is better. You might start with a simple living trust, having any non retirement assets titled in the name of the trust and take it from there. As your life becomes more complicated you could amend the trust to meet you changing needs.
+1

You'll want to double-check how title of your property is actually held. It's probably community property with right of survivorship.

I agree with Afan, once you add real property to the mix it starts getting complicated. It wouldn't be an issue for your spouse but suppose in the unlikely event you both die in a car crash that leaves a mess for your parents. After going through an EXPIDITED California probate process which cost $2,500, took six months and the property lost 20% of its value in 2008-2009, be kind to the ones you leave behind.

As mention, if you have kids you can amend the Trust to deal with that situation.

,

prackmatic
Posts: 6
Joined: Sun May 06, 2018 11:48 pm
Location: Bay Area, CA

Re: California folks - Will/trust still needed with POD & TOD?

Post by prackmatic » Mon May 14, 2018 1:08 am

viz wrote:
Sun May 13, 2018 5:21 pm
prackmatic wrote:
Sun May 13, 2018 2:11 am
Howdy Bogleheads - longtime lurker here. I recently signed up for Hyatt Legal Plans through my employer - wanted to finally get around to creating a will (or trust), power of attorney, and living will. Going the DIY route would have been easier, but I've seen that most BHs seem to recommend going to a real attorney for this kind of stuff. I recently stumbled across some threads regarding POD/TOD and that got me thinking - do I really need to craft a will/trust?

Me:

-Single, 30s, located in California (bad probate process)
-Assets spread across checking, savings, stock, retirement accounts (401K/IRA)
-Homeowner, but we have a joint tenancy (I don't believe you can pass your share to any heirs)
-Beneficiaries would be parents and siblings
-Besides that, nothing too complicated

Future:

-I may want to buy real estate in down the road (likely not a joint tenancy like current home)
-Beneficiaries could possibly change over time

If all my financial accounts list my beneficiaries, can I just get away without having a will/trust? Or, should I still have at least a simple will to make sure all my bases are covered and to also cover loose ends like my car? I would still need to get a living will/POA. I'd like to opt for the combination of best planning/ease/cost effectiveness (don't we all). Would love to hear everyone's advice, though this may be more California specific due to our complexities.

Main questions:

-Do I need a will/trust? If yes, which one?
-Based on my situation, would you recommend DIY for any of the legal documents mentioned?

Thank you BHs :happy
If you have the same plan as my employer (provider is the same), it should not cost you anything. The only money we paid was transfer of title to our trust. We got living trust, will, health directive and end of life directive. Have you talked to a lawyer and asked about what it will cost you? Not sure why you would not want to take advantage of service you are already signed up for. Thanks
I've been researching and trying to shortlist some lawyers, so haven't spoken to anyone regarding the potential costs (if any). However, you're right - it shouldn't cost anything (at least, the plan says covered services should be $0). Some people I came across online did mention they paid extra on top, but I haven't had a chance to confirm if that's because they went beyond the covered services. I think part of me just wants to avoid dealing with a lawyer - silly, I know.

prackmatic
Posts: 6
Joined: Sun May 06, 2018 11:48 pm
Location: Bay Area, CA

Re: California folks - Will/trust still needed with POD & TOD?

Post by prackmatic » Mon May 14, 2018 1:11 am

Carefreeap wrote:
Sun May 13, 2018 10:21 pm
afan wrote:
Sun May 13, 2018 9:25 am
I imagine there can be situations simple enough that DIY is fine. They would probably apply when you did not really care what happened at your death: no human heirs, any assets to go to a charity, let them figure it out.

With a spouse there are enough complications that I would want more certainty.

Having everything in POD TOD is a terrible idea. You will probably have final expenses. If everything is in some sort of POD designation there will be no money for your executor to pay your bills. That will force your executor to chase the beneficiaries to get some of that money back. This is a hassle created by the, misguided, belief that everything TOD simplifies the process.

Rumor has it that CA probate is onerous and a living trust is better. You might start with a simple living trust, having any non retirement assets titled in the name of the trust and take it from there. As your life becomes more complicated you could amend the trust to meet you changing needs.
+1

You'll want to double-check how title of your property is actually held. It's probably community property with right of survivorship.

I agree with Afan, once you add real property to the mix it starts getting complicated. It wouldn't be an issue for your spouse but suppose in the unlikely event you both die in a car crash that leaves a mess for your parents. After going through an EXPIDITED California probate process which cost $2,500, took six months and the property lost 20% of its value in 2008-2009, be kind to the ones you leave behind.

As mention, if you have kids you can amend the Trust to deal with that situation.

,
Is community property with right of survivorship only for married couples? I'm single.

gretah
Posts: 167
Joined: Wed Apr 20, 2016 11:14 pm

Re: California folks - Will/trust still needed with POD & TOD?

Post by gretah » Mon May 14, 2018 10:51 am

I agree: have a professional create the documents.

Before that, I suggest you read two books to educate yourself on the issues so you can work with the attorney:
Make Your Own Living Trust
8 Ways to Avoid Probate

Both by Nolo Press www.Nolo.com

Carefreeap
Posts: 2415
Joined: Tue Jan 13, 2015 7:36 pm
Location: SF Bay Area

Re: California folks - Will/trust still needed with POD & TOD?

Post by Carefreeap » Mon May 14, 2018 11:23 am

prackmatic wrote:
Mon May 14, 2018 1:11 am
Carefreeap wrote:
Sun May 13, 2018 10:21 pm
afan wrote:
Sun May 13, 2018 9:25 am
I imagine there can be situations simple enough that DIY is fine. They would probably apply when you did not really care what happened at your death: no human heirs, any assets to go to a charity, let them figure it out.

With a spouse there are enough complications that I would want more certainty.

Having everything in POD TOD is a terrible idea. You will probably have final expenses. If everything is in some sort of POD designation there will be no money for your executor to pay your bills. That will force your executor to chase the beneficiaries to get some of that money back. This is a hassle created by the, misguided, belief that everything TOD simplifies the process.

Rumor has it that CA probate is onerous and a living trust is better. You might start with a simple living trust, having any non retirement assets titled in the name of the trust and take it from there. As your life becomes more complicated you could amend the trust to meet you changing needs.
+1

You'll want to double-check how title of your property is actually held. It's probably community property with right of survivorship.

I agree with Afan, once you add real property to the mix it starts getting complicated. It wouldn't be an issue for your spouse but suppose in the unlikely event you both die in a car crash that leaves a mess for your parents. After going through an EXPIDITED California probate process which cost $2,500, took six months and the property lost 20% of its value in 2008-2009, be kind to the ones you leave behind.

As mention, if you have kids you can amend the Trust to deal with that situation.

,
Is community property with right of survivorship only for married couples? I'm single.
Sorry, I was distracted by the "real estate held as joint tenancy" comment and forgot you mentioned you were single earlier in the post. I assume that's with a parent or sib?

You're correct that community property only applies to married couples.

prackmatic
Posts: 6
Joined: Sun May 06, 2018 11:48 pm
Location: Bay Area, CA

Re: California folks - Will/trust still needed with POD & TOD?

Post by prackmatic » Tue May 15, 2018 12:32 am

gretah wrote:
Mon May 14, 2018 10:51 am
I agree: have a professional create the documents.

Before that, I suggest you read two books to educate yourself on the issues so you can work with the attorney:
Make Your Own Living Trust
8 Ways to Avoid Probate

Both by Nolo Press www.Nolo.com
Thanks for the book suggestions!

prackmatic
Posts: 6
Joined: Sun May 06, 2018 11:48 pm
Location: Bay Area, CA

Re: California folks - Will/trust still needed with POD & TOD?

Post by prackmatic » Tue May 15, 2018 12:32 am

Carefreeap wrote:
Mon May 14, 2018 11:23 am
prackmatic wrote:
Mon May 14, 2018 1:11 am
Carefreeap wrote:
Sun May 13, 2018 10:21 pm
afan wrote:
Sun May 13, 2018 9:25 am
I imagine there can be situations simple enough that DIY is fine. They would probably apply when you did not really care what happened at your death: no human heirs, any assets to go to a charity, let them figure it out.

With a spouse there are enough complications that I would want more certainty.

Having everything in POD TOD is a terrible idea. You will probably have final expenses. If everything is in some sort of POD designation there will be no money for your executor to pay your bills. That will force your executor to chase the beneficiaries to get some of that money back. This is a hassle created by the, misguided, belief that everything TOD simplifies the process.

Rumor has it that CA probate is onerous and a living trust is better. You might start with a simple living trust, having any non retirement assets titled in the name of the trust and take it from there. As your life becomes more complicated you could amend the trust to meet you changing needs.
+1

You'll want to double-check how title of your property is actually held. It's probably community property with right of survivorship.

I agree with Afan, once you add real property to the mix it starts getting complicated. It wouldn't be an issue for your spouse but suppose in the unlikely event you both die in a car crash that leaves a mess for your parents. After going through an EXPIDITED California probate process which cost $2,500, took six months and the property lost 20% of its value in 2008-2009, be kind to the ones you leave behind.

As mention, if you have kids you can amend the Trust to deal with that situation.

,
Is community property with right of survivorship only for married couples? I'm single.
Sorry, I was distracted by the "real estate held as joint tenancy" comment and forgot you mentioned you were single earlier in the post. I assume that's with a parent or sib?

You're correct that community property only applies to married couples.

No worries - yes, with parents and one extended family member.

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