Do we need a will/trust/etc?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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miamivice
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Do we need a will/trust/etc?

Post by miamivice »

My wife and I have assets around $2 million dollars, and we have two kids both elementary school age and younger. I have a employer-provided life insurance policy worth $250,000, she has none. We are in good health.

What critical documentation do we need to have? For example, I know we need a will to disburse our assets in the event of our absence. I haven't worried about it much so far because:

a) My wife and I would have to be grown ups about our finances and deal with difficult questions without bickering. (Harder than you might think.)
b) Since my wife and I don't spend a lot of time together (for example, we work different jobs), the chance of us both going at once is pretty small.

However, I know we still need to deal with writing a will at some point.

Other options -

Do we need a trust? I know a lot of people that have trusts but don't know why.

Do we need to document a plan for our children? I know we "should", but I guess the question is more do we "need". I fully expect to live until they are 18 so I am not hugely concerned about this. My wife is dearly concerned but I think if I spent the next twelve years stalling on creating it, the problem will resolve itself.

Any othe important documents that we "need" to create? I am not wanting to spend much time dwelling on situations that are unlikely to happen. However, I wouldn't want a prolonged legal battle between in-laws that might not get along otherwise, so I do want to do my part to lay everything should the unthinkable happen.
delamer
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Re: Do we need a will/trust/plan for our children?

Post by delamer »

You need to have a legal document that says who will be your kids’ physical guardian if you and your wife both die before your youngest reaches age 18. (Remember that you and your wife don’t have to die at the same time for your kids to end up being orphaned as minors.)

You need to have wills that set up trusts for your kids to hold any assets that they will inherit in the above scenario. Those trusts need a trustee to manage your kids’ assets. Note that this doesn’t mean that you need to put your money in trusts now. It means that your wills should create trusts to benefit your minor children.
Gill
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Re: Do we need a will/trust/etc?

Post by Gill »

I’m a bit shocked at your casual attitude about having a will with two million bucks and two children. You should have had one long ago and I would urge you to do it pronto. You may think you will live forever, but you may not. if you don’t want to risk leaving a mess it should be your highest priority.
Gill
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jackrabbit
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Re: Do we need a will/trust/etc?

Post by jackrabbit »

For us the wake-up call came from a woman named Chanel Reynolds, who lost her spouse very suddenly and quickly learned they had nothing in place. Do a search online and read her story.

DW and I set up wills and a trust to manage our assets. It is nothing fancy or even particularly complicated, but it eases my mind to have it all laid out.

Having any family member fall seriously ill or pass on is bad enough. It is the worst possible time to add the stress of dealing with unknowns, the court system, other bureaucracy, or locating information that is now missing - possibly to pay bills or raise money in a hurry.

Get Your Stuff Together and record it, so people (possibly even you) can start with that and move forward without delay or confusion.
covertfantom
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Re: Do we need a will/trust/etc?

Post by covertfantom »

I actually just got my trust setup the other week with far less assets than you. Here's the nuts and bolts of this thing: if you and your wife die without setting up a trust, your assets are going to go through probate court. My lawyer scared us with stories of inheritances losing tens of thousands in value just because an account was not properly setup in a trust. That's just the financial aspect of course - the more scary thing is who do you want to take care of the kids? Without a will, you could have relatives tying up things up in court fighting over your kids.

Go get your trust/will done. And when you're done with that, take the time and money to find a really safe place to store that document. Your kids will thank you.
covertfantom
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Re: Do we need a will/trust/etc?

Post by covertfantom »

I will just add one more thing - this trust will live with you and your wife for pretty much as long as you live/stay married. You can either get it done on your death bed... or get yourself covered for the rest of your life. To me it seems silly to wait on something you'll have to do eventually anyway.
pdavi21
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Re: Do we need a will/trust/etc?

Post by pdavi21 »

No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
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aspiringboglehead
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Re: Do we need a will/trust/etc?

Post by aspiringboglehead »

The most important thing is, or at least should be, choosing and formally naming a guardian for your children in a will. For most people, that addresses the main concern in the unlikely event that you both die before your children. If nothing else, reading Dickens (and more modern literature in which orphans figure prominently) should be enough to motivate you to chose the right person to take care of your kids and to set up that choice in a binding document.

The main reason to do anything more with a will arises when you wouldn't trust your chosen guardian with your children's money. In that case, you should pick a trustee who can properly manage the money until they're adults. (For example, I'm often named as a trustee by friends who have relatives they'd trust with their kids but not their money. Their typical concern, incidentally, isn't theft or intentional misuse by the guardian but just financial illiteracy.) Presumably your will will just leave your money to your children, which is what would have happened anyway without a will, but leaving a will lets you structure how they'll get the money: for example, should a trust end when they're 21? 30? 40? You may prefer older ages and more structure over the default (which is ordinarily that your children would have full control over the money once they're adults).

Either way, doing it informally, or using an online kit or something similar, can be fine for many people unless they have more complicated needs. I'm surprised when I hear that people pay many thousands of dollars for a simple will (for example, one that doesn't involve estate-tax planning). The document most people want effectively either says either "X should take care of my kids" or "X should take care of my kids, and Y is the trustee for all our money for the benefit of our kids, who receive the money according to the following schedule until they're 30, when they can take full control over it." The next steps account for unlikely contingencies, like "And if our kids die before they are 18, then our siblings become the beneficiaries of any trusts we have created," or idiosyncratic preferences, like "And our car, we leave to my uncle. And our cat is to be taken care of by..."

If you anticipate that it'll be emotionally or logistically difficult to do anything, simply both adopting wills naming a guardian for the kids is at least worth doing, and you'd probably lose nothing by doing what someone else said -- handwriting it with witnesses and giving the copies to your chosen guardian -- but you may need to check your local laws to be sure.

The other concern is "living will" stuff -- instructions for what happens in the hospital and who makes decisions for you -- but that's really another matter.
Ragnoth
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Re: Do we need a will/trust/etc?

Post by Ragnoth »

As a lay person, my though it that wills and trusts are good planning, and are important in case the worst happens (if it helps, you can lump it in with things like term life, health and homeowners insurance, or a large emergency fund).


Trusts serve three big purposes:

(1) They can be used to pass assets without going through probate.
(2) They can be used to shelter you from estate taxes.
(3) They can control how and when money is disbursed and used.

The value of avoiding probate and estate taxes depends on what state you are in and your personal situation. How onerous probate is (and how much they can tie up assets in the interim) varies, but it can also safe you if you mess up the formalities in writing/executing a will. Similarly, some States have much lower limits for estate taxes than the federal government, and don't easily let you transfer your exemption amount to the surviving spouse. For example, if you were in Massachusetts, you are already past the threshold where you would want to set up a trust to avoid a tax-bite and maximize exemptions (only about $1M per person if I recall correctly).

The control of money issue is important for mixed families, people with young children when both spouses die, special needs situations etc. In lieu of any trusts, they court would have the money tied up with a guardian or custodian (who has to make costly reports to the court), and the children get the full amount at 18 -- which raises its own issues. A relatively simple trust might tie up money till 18 to be disbursed as "necessary" for their support and maintenance, allow distributions for college, then dole out a lump sum at 25. Note, these kind of trusts can be set up as part of your will, rather than beforehand (i.e., the will sets out the terms of the trust which is enacted upon probate). A trustee usually has more flexibility than a judicially appointed guardian.

Note that accounts with beneficiaries don't have to go through probate (similar to a well-formed trust). Setting up your spouse as a beneficiary on life insurance and IRA avoids a bunch of headache. Setting up your children as backup beneficiaries is smart, but raises the same issues about control of money as the above. Some estate planners might suggest having a trust set up ahead of time to act as the beneficiary, which then distributes money to children according to some plan.

The purpose of Wills is to avoid intestacy.
Wills need to go through probate, but control disposition of assets. Absent a will, the division of your assets is determined by State intestacy statutes (think of them like default rules). *Most* states will give everything to the spouse, and then the kids. Some States give a portion to the kids outright.

Living Wills and Other Miscellany
Living wills, health care proxies, and durable powers of attorney are all worthwhile. The idea is to give somebody instructions for what to you if you are on life support, vegetative, etc. Generally, a legal spouse is going to be well positioned to make those kind of calls and few people will object. But it's better to get things formalized, and have a contingency plan.

The Raising Kids Issue
Courts are usually free to assign anyone they see fit as guardian to your children, and that person needs to consent to becoming a guardian. However, any information you put in the will about desired guardians is *very* persuasive to a court, and they would only go against your wishes in extraordinarily rare circumstances. The red flags are if you pick some friend over a blood relative without an explanation, or if the chosen person lives outside the United States.

Final Thoughts
All in all, even a simple "do it online" will is better than nothing, but I suggest investing some effort in having a proper estate plan with an actual lawyer in your state would be a good use of of your money. The bill can sting a bit (I would budget $5000 minimum), but it can be well worth it at your current level of wealth etc.

Different states have different requirements for wills. In some, writing it yourself (holographic wills) is a universal cure-all, but this is not true in all states. Some can be harsh sticklers for the formalities, with traps for the unwary. If you resort to one of those kits, follow the instructions carefully.
Ybsybs
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Re: Do we need a will/trust/etc?

Post by Ybsybs »

It sounds like there's something you think your wife isn't interested in planning for with the "need to be grownups" quip but in the same post you disparage naming guardians for your kids which would be the "grownup" thing for you to do.

What if you both work together to come up with your plan and then get it legally implemented?



If you die before your wife, do you want her in her grief to be faced with guessing what your final wishes were?

If your wife dies before you, do you want that time while you are grieving to be the time when you guess about her wishes?

If you both die at the same time, do you want the default laws of wherever you happen to die to be what determines who gets what and who cares for your kids if they are still minors? You think they won't still be minors, but what if they aren't? Do you want to leave them with guessing about what your final wishes were as they mourn born their parents?
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Re: Do we need a will/trust/etc?

Post by Jack FFR1846 »

Ybsybs wrote: Tue Feb 19, 2019 7:07 am It sounds like there's something you think your wife isn't interested in planning for with the "need to be grownups" quip but in the same post you disparage naming guardians for your kids which would be the "grownup" thing for you to do.
This applies to my wife and me. We never saw anyone we knew taking care of our kids, so we just procrastinated. We are perfectly happy with how our state treats inheritances upon our deaths. We procrastinated so long that both kids aged out, so to speak. So we've got no will, no trust and are perfectly happy with that now.
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Gill
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Re: Do we need a will/trust/etc?

Post by Gill »

pdavi21 wrote: Tue Feb 19, 2019 2:03 am No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
With all due respect, this is not good advice and the OP would be well advised to ignore it.
Gill
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Tamarind
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Re: Do we need a will/trust/etc?

Post by Tamarind »

Yes, you need a will. You need one yesterday. You probably don't need a trust, but you need a will. Even if it's just a LegalZoom template. It's not about the paper but about making the plan.

If you both get killed in an accident, where do your kids go? And who is responsible for making sure your assets get to them?

Wills are good for many other things, but identifying a guardian and executor are the ones that just can't wait once you have kids.

If you and your spouse disagree on those questions, all the more important to get it out and resolved now.
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Watty
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Re: Do we need a will/trust/etc?

Post by Watty »

In the "etc." part is the medical paperwork that will tell the doctors when they should and should not "pull the plug" on you if you are on life support. It can be hard for a spouse to make that decision and either way it can haunt them for the rest of their lives. Having your instructions clearly stated is very important and if nothing else that would be a good reason to get all the paperwork in order.
miamivice wrote: Mon Feb 18, 2019 8:06 pm My wife is dearly concerned but I think if I spent the next twelve years stalling on creating it, the problem will resolve itself.


There are levels to doing the paperwork. With kids involved I would recommend using a local lawyer to draw up the paperwork but if you do not want to to that then using LegalZoom is an option.

My kid was grown so our situation was simpler but I used them to get our paperwork in order and I was pleased with the process. It only costs a couple of hundred dollars and does not take long to do. It also includes a telephone conference call with a lawyer to go over your paperwork. People like law school lawyers have reviewed the wills they produced and said they were OK but might not include some more sophisticated estate planning features that some people might want.

There have been lots of threads about Will, LegalZoom, and software for wills.

https://www.google.com/search?sitesearc ... =legalzoom
miamivice wrote: Mon Feb 18, 2019 8:06 pm However, I wouldn't want a prolonged legal battle between in-laws that might not get along otherwise, so I do want to do my part to lay everything should the unthinkable happen.
It is worse than that.

There are sleazy lawyers that may jump in the middle of the situation and try to get the state to assign them to be the kids guardians and manage the two million dollars that your kids would inherit. They then charge so many fees that there may be little left for the kids when they become adults.

There could be a lot more than 2 million dollars involved too since something could happen like you could be killed in a car accident and there could be a large lawsuit. Without a will though there would be a big question about who would manage the lawsuit.

Even if the best of situations the kids grandparents may not be physically up to raising your kids for the next 20 years. Likewise the kids aunts and uncles may not be the best people raise your kids either. The only relative that might be willing to do it might be your cousin Bubba who could never hold down a job but would be glad to take your kids, and their millions of dollars.
jucor
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Re: Do we need a will/trust/etc?

Post by jucor »

pdavi21 wrote: Tue Feb 19, 2019 2:03 am No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
Interesting how you are so sure... are you omniscient? By definition, people who die unexpectedly were not generally anticipating their imminent death. Car accidents, strokes, etc. do happen (my BIL died of a massive stroke while kayaking a couple of years ago -- fit, late '40s, non smoker, needless to say completely unexpected).

Spending a few $$ and some time planning is a good idea -- especially as the OP has two minor children and not insubstantial assets.

pdavi21, do you also go without insurance because you "know" your house will never burn, flood, etc. ?
JBTX
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Re: Do we need a will/trust/etc?

Post by JBTX »

You need a will to designate where your children end up

You should have a will to designate what happens with your money and assets (much of it can be bypassed by account designations, and making non retirement accounts either joint accounts or TOD accounts).

You don't NEED trusts. They may or may not be a good idea depending on what you are trying to accomplish. It probably is a good idea with 2 young kids and $2 million to create trusts in the event both of you die, as unlikely as that seems. Those trusts can either be part of your will or part of a revoke able living trust.
shell921
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Re: Do we need a will/trust/etc?

Post by shell921 »

The unexpected can happen and derail our plans so yes you need a will. 2 years ago a close friend of mine was discovered to
have a brain tumor and she was dead 6 weeks later. She had no will and no trust. She had a home near the beach and rental property. Her adult son
had quite a time sorting things out. Even if you did not have minor children, why not get a trust? My husband and I did not have children but when we
were in our 30's we got wills and a trust because we wanted to pass our estate to siblings in the event we both died together in an auto accident or plane crash.
Isabelle77
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Re: Do we need a will/trust/etc?

Post by Isabelle77 »

jucor wrote: Tue Feb 19, 2019 8:06 am
pdavi21 wrote: Tue Feb 19, 2019 2:03 am No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
Interesting how you are so sure... are you omniscient? By definition, people who die unexpectedly were not generally anticipating their imminent death. Car accidents, strokes, etc. do happen (my BIL died of a massive stroke while kayaking a couple of years ago -- fit, late '40s, non smoker, needless to say completely unexpected).

Spending a few $$ and some time planning is a good idea -- especially as the OP has two minor children and not insubstantial assets.

pdavi21, do you also go without insurance because you "know" your house will never burn, flood, etc. ?
Growing up, a good friend's parents were killed in a car accident when he was very young. His parents' will saved him and his brother from being raised by his dysfunctional extended family (or foster care) and instead custody was given to his parents' best friends who loved them as their own. That's why the OP needs a will, yesterday.
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miamivice
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Re: Do we need a will/trust/etc?

Post by miamivice »

I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
keepingitsimple
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Re: Do we need a will/trust/etc?

Post by keepingitsimple »

miamivice wrote: Mon Feb 18, 2019 8:06 pm My wife and I have assets around $2 million dollars, and we have two kids both elementary school age and younger. I have a employer-provided life insurance policy worth $250,000, she has none. We are in good health.

What critical documentation do we need to have? For example, I know we need a will to disburse our assets in the event of our absence. I haven't worried about it much so far because:

a) My wife and I would have to be grown ups about our finances and deal with difficult questions without bickering. (Harder than you might think.)
b) Since my wife and I don't spend a lot of time together (for example, we work different jobs), the chance of us both going at once is pretty small.

However, I know we still need to deal with writing a will at some point.

Other options -

Do we need a trust? I know a lot of people that have trusts but don't know why.

Do we need to document a plan for our children? I know we "should", but I guess the question is more do we "need". I fully expect to live until they are 18 so I am not hugely concerned about this. My wife is dearly concerned but I think if I spent the next twelve years stalling on creating it, the problem will resolve itself.

Any othe important documents that we "need" to create? I am not wanting to spend much time dwelling on situations that are unlikely to happen. However, I wouldn't want a prolonged legal battle between in-laws that might not get along otherwise, so I do want to do my part to lay everything should the unthinkable happen.
Take the time now, don't procrastinate. This will ultimately prove to be the last consideration you show your children.
Problems left from poor estate planning don't just resolve themselves...rather, they are left for heirs to struggle with.
The more thought and effort you both put forth now, the easier the process will be for your children and other family.
keepingitsimple
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Re: Do we need a will/trust/etc?

Post by keepingitsimple »

miamivice wrote: Tue Feb 19, 2019 11:57 am I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
I am no expert on trusts, but the simple explanation as to the potential benefit of a trust, regarding minor children, would be that it dictates when your children would receive their inheritance and who will manage and safeguard the funds until they are old enough and capable enough. Others on this forum with more knowledge can weigh in with greater insight.
bsteiner
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Re: Do we need a will/trust/etc?

Post by bsteiner »

miamivice wrote: Tue Feb 19, 2019 11:57 am I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
If you're worth $2 million and you have two young children, you'll need Wills to say who gets what.

The key issues are (i) the degree of control the surviving spouse should have, (ii) the age at which your children control their shares, (iii) who controls your children's shares until that point, and (iv) guardians.

You'll want to create trusts for your children in your Wills since an elementary school age child is to young to control his/her share. Depending on how you want to provide for each other, you might provide for each other outright or in trust.

In a few states, notably California, probating a Will and dealing with the probate court is said to be difficult. If you're in one of those states, you might create a trust for your own benefit now.

You should be able to get a good job for the figure you mentioned, or an adequate job at a lower cost.
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Re: Do we need a will/trust/etc?

Post by agilesheltz »

miamivice wrote: Tue Feb 19, 2019 11:57 am I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
Maybe spend a few minutes reading through something like this:

https://www.nolo.com/legal-encyclopedia ... -will.html

Trusts can avoid probate and protect from court challenges to name just a few things. With the assets that you have I would spend a bit to at least consult with an estate attorney that can inform you better to your situation and location. The thousands of dollars spent today could save tens of thousands of dollars down the road in the unfortunate event that something were to happen to you.
Rupert
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Re: Do we need a will/trust/etc?

Post by Rupert »

This may sound a bit macabre, but I find it to be a useful thought experiment:

When I was a kid, my uncle was killed in a car accident as he drove to work one foggy morning. My aunt was at home alone, getting ready for work herself, when the State Trooper knocked on her door to deliver the news. The mental image of that scene -- my aunt answering the door in her pajamas with a cup of coffee in her hand expecting to find her husband standing there, thinking he had forgotten his lunchbox or something -- made a lasting impression on me. I think about it often, decades later. So when I had kids, I replayed that scene in my mind but I inserted myself and my spouse into that car accident. I thought through the most likely scenario in which me and my spouse could die at the same time. For example, my spouse and I are out on a date night, maybe seeing a show or having dinner, and we leave the kids at home with a babysitter. On our way home, our car is struck by a drunk driver who runs a red light. We are both killed instantly (or maybe one of us survives, I ran through the scenario both ways). The police get our address from our drivers licenses and go to our house and knock on the door. The babysitter answers. The police tell her the news. What happens next? Does the babysitter have the information she needs to ensure the kids are cared for over the next few days/weeks, e.g., phone numbers for grandparents, etc.? Do those people (grandparents, etc.) know where to find the information they need to ensure long term care of the children? Really imagine every detail and how it will play out. That helped motivate me to get the proper documents in place, to draft detailed instructions for the caregivers of my children, to notify those caregivers where to find those instructions, etc.
covertfantom
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Re: Do we need a will/trust/etc?

Post by covertfantom »

miamivice wrote: Tue Feb 19, 2019 11:57 am I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
I'm not a lawyer... so I can only tell you what my California estate lawyer told me a few weeks ago. In California, assets not in a trust are divided by a probate court. Probate court, for whatever reason, is pricey/difficult to get through. By the time they're done splitting the assets fairly, the fees incurred can be pretty high. My lawyer cited a story of a person who had transferred their money into a non-trust account to buy a house, died, and then incurred $40,000 worth of probate fees. If you have your assets in a trust, the trust lives on after you're gone and avoids the probate system altogether. Your assets are then distributed by a designated trustee the way you've indicated in your trust document.

I don't know about your company, but some employers offer legal insurance. My megacorp does and it covered the entire cost of setting up my will and living trust for a few hundred bucks in insurance fees.
Jimmie
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Re: Do we need a will/trust/etc?

Post by Jimmie »

Go see an attorney. Now. You have too much at stake to screw anything up. Don't even try to save a buck with canned will-making forms.

There is lots of anecdotal information here and I believe everyone means well. The only one who serves your BEST interest and knows your state's laws is an attorney. Once he/she sets up everything, i.e. wills, trust, etc., you may only need to alter things once or twice for the rest of your life, depending on what curves life throws at you.
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LilyFleur
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Re: Do we need a will/trust/etc?

Post by LilyFleur »

covertfantom wrote: Tue Feb 19, 2019 12:32 pm
miamivice wrote: Tue Feb 19, 2019 11:57 am I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
I'm not a lawyer... so I can only tell you what my California estate lawyer told me a few weeks ago. In California, assets not in a trust are divided by a probate court. Probate court, for whatever reason, is pricey/difficult to get through. By the time they're done splitting the assets fairly, the fees incurred can be pretty high. My lawyer cited a story of a person who had transferred their money into a non-trust account to buy a house, died, and then incurred $40,000 worth of probate fees. If you have your assets in a trust, the trust lives on after you're gone and avoids the probate system altogether. Your assets are then distributed by a designated trustee the way you've indicated in your trust document.

I don't know about your company, but some employers offer legal insurance. My megacorp does and it covered the entire cost of setting up my will and living trust for a few hundred bucks in insurance fees.
It depends on the state you live in. I have followed Nolo's guidelines for all of my assets in order to avoid probate. Incidentally, we just finished settling an estate which contained two trusts, and we owed in excess of $10,000 in attorney fees by the time we were done.
https://www.nolo.com/legal-encyclopedia ... 31838.html
Also, the Nolo will making software is stellar. It includes several different power of attorneys as well as the advanced care directive. I did all of this before doing some international travel. It requires a bit of time but I can rest easy that if I should go, my children will not be left with a mess. Nolo is staffed by attorneys, actually. They are up on current law. Most of my acquaintances don't even know that they can set up the deed to their house as a TOD. I learned it on Nolo. An attorney definitely will not be sharing that information with you.
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Re: Do we need a will/trust/etc?

Post by delamer »

miamivice wrote: Tue Feb 19, 2019 11:57 am I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
If you both die while your kids are minors, do you want to decide how the assets they inherit will be held or do you want the state to do it? Do you want to name a trustee to look after your kids’ interests or do you want the state to do it?

In other words, do you want to leave a big mess that your estate will pay thousands of dollars in fees to unknown lawyers and bankers to sort out at the direction of the courts?

This is about creating a trust for your kids’ inheritance if you die. It isn’t about a trust for your assets now.
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Re: Do we need a will/trust/etc?

Post by HereToLearn »

I agree with everyone that you need a will for all of the reasons mentioned. I did not have one until my children were two and five, and that was negligent.

Everything anecdotal I have heard about California suggests that one needs a trust in order to avoid significant probate fees. I imagine there are other states where the same is true. I have only investigated trusts in NY and CT, and have found that the cost of setting up a trust is the same as the cost of going through probate. I am in the middle of dealing with this as the executrix of my mother's estate, and with only a house to pass through probate, the process has been hassle-free and has cost $2000, with more than half going to the court as a fee. Brokerage account was TOD so no need to involve anyone other than the brokerage firm. Just be sure that beneficiaries are updated.

My own will was written with a Family Trust for Descendants, with staggered payout dates based on the ages of my children, and a close friend appointed as Trustee. I only paid $2000 to have the will set up a few years back, and I live in a very HCOL area, so I don't think you will need to spend $5K unless you establish a separate trust.

I don't know enough about the value of trusts to advise, but I thought one had to update the trust with any new assets, so my habit of opening accounts at Ally might be problematic. Someone who knows anything about trusts might disabuse me of this notion.
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Re: Do we need a will/trust/etc?

Post by GoldStar »

Isabelle77 wrote: Tue Feb 19, 2019 11:46 am
jucor wrote: Tue Feb 19, 2019 8:06 am
pdavi21 wrote: Tue Feb 19, 2019 2:03 am No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
Interesting how you are so sure... are you omniscient? By definition, people who die unexpectedly were not generally anticipating their imminent death. Car accidents, strokes, etc. do happen (my BIL died of a massive stroke while kayaking a couple of years ago -- fit, late '40s, non smoker, needless to say completely unexpected).

Spending a few $$ and some time planning is a good idea -- especially as the OP has two minor children and not insubstantial assets.

pdavi21, do you also go without insurance because you "know" your house will never burn, flood, etc. ?
Growing up, a good friend's parents were killed in a car accident when he was very young. His parents' will saved him and his brother from being raised by his dysfunctional extended family (or foster care) and instead custody was given to his parents' best friends who loved them as their own. That's why the OP needs a will, yesterday.
(at the risk of humoring a troll...) The other problem with just naming beneficiaries (without an estate) is who are you going to name a beneficiary? If you name an adult relative with "hopes" they will take care of your kids they can just take the money and not take your kids. If you name your kids as beneficiaries you are also in trouble since no insurance company is going to simply write out a check to a minor.
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Re: Do we need a will/trust/etc?

Post by aspiringboglehead »

miamivice wrote: Tue Feb 19, 2019 11:57 am I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
You don't have to, and the short answer re: trusts is that you almost certainly don't need one. It's possible a trust could save your children some money and hassle in your state when you die, but it's entirely reasonable to avoid investigating now whether that cost and hassle is worth reducing by paying a present expense.

Trusts are confusing because there are many different, largely unrelated types of trust.

The term "trust" includes everything from (1) an irrevocable 250-page document governing how many is to be used and managed by a professional trust company for the next 200 years to (2) declaring beneficiaries on a bank account (taken to create a type of revocable trust known as a "Totten trust"). Trusts might be created today or might created in the future by a will (or another trust). Some trusts have tax implications; others don't. And so on.

One thing that these trusts have in common is that they take money out of your administrative estate when you die; in other words, either having transferred money to a trustee or declaring a payable-on-death beneficiary mean the money isn't part of your "estate" for the purposes of state oversight of your will and estate, a process called "probate." (The money may still be part of your "estate" for the purposes of estate taxation, and the terminology here confuses many people.) This can matter for several reasons. For example, massive litigation has been spawned when people set up a careful estate plan but then declare different beneficiaries on their $4 million Vanguard account that has all their financial assets; see for example https://elder-law.com/disclaimer-strate ... nservator/.

But the big reason it matters for most people is that when assets are passed in trust, they are not handled by your state courts' "probate" process. The consequences of this vary sharply from state to state. In some states, probate is expensive and slow; in other states, it's no more expensive or less convenient than using trusts. But one thing that's driving many people's advice in this thread is the notion that you should "avoid probate." If you were micro-optimizing your affairs for the benefit of your children's future finances, that would be something you should look into. But it's one thing to optimize among many, and there's no reason to think it's a particularly important thing to optimize (or to optimize now), particularly if doing so raises any tension or logistical difficulties between you and your wife. To put it bluntly, it's fine, and probably perfectly rational, to ignore the question of whether your death will cost your children an extra $10,000 in administrative costs: it might not, and even if it does, there are other things to worry about that will probably matter more to your children.

Apart from the basic process of probate, there are three other common reasons trusts can be valuable:

One is to plan for various generational taxes (the estate tax and the generation-skipping-transfer tax), but as you've said, this doesn't currently apply to you.

The second is to lay out specific ways your children will get your money after you die, because you think some restrictions are better than unrestricted wealth for very young adults. That is a personal preference and depends on your values and your view of your children, but it's absolutely justifiable for you to think it's not a big deal and not worth considering further at this stage. The idea is just that providing a scheme for paying for college and graduate school, and then providing a modest income until kids are 30 or so, is more appealing to many people than giving millions to an 18-year-old.

The third, as I mentioned earlier, is to separate legal guardianship of children from the control of money. This is an issue only if your chosen guardian isn't a good overseer for $2 million on behalf of your children.

Trusts can have all sorts of other roles, but that covers the main concerns for most people in similar situations to yours.
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Re: Do we need a will/trust/etc?

Post by pdavi21 »

jucor wrote: Tue Feb 19, 2019 8:06 am
pdavi21 wrote: Tue Feb 19, 2019 2:03 am No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
pdavi21, do you also go without insurance because you "know" your house will never burn, flood, etc. ?
Yes.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking
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Re: Do we need a will/trust/etc?

Post by FoolMeOnce »

miamivice wrote: Tue Feb 19, 2019 11:57 am I get that we need to put a will together.

I am confused about a trust. Many people here suggested a trust. I didn't really see a good explanation for what a trust would do for our family? One mentioned estate taxes, but with the current estate tax limit being around $11 million, I don't think that will affect us (not now at least.)

I certainly don't want to spend $5,000 on this matter.
Some confusion probably stems from people not distinguishing between testamentary trusts and other trusts.

You need a will. The will can include provisions to create, upon the demise of you and your spouse, a trust in which your assets go for the benefit of your children. It will also name the trustees. This trust will not exist yet, it springs to life upon your and your spouse's death.

This is what most people above are taking about. Not a will and a separate trust.
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Re: Do we need a will/trust/etc?

Post by RadAudit »

OK, maybe not a need; but, …

I had less than you do now when I got a trust. The primary reason was to make as sure as possible that my grandchildren would have a chance to inherit whatever was left over if my kid died after I was gone and the surviving spouse remarried and left the assets to the new wife / new kids, and / or after I died my kid got a divorce and the ex-spouse went after the assets.

Probably all a sells pitch and / or wouldn't happen anyway. And, I'm guessing your YMMV and your kids will turn out OK. Not sure about mine.
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Re: Do we need a will/trust/etc?

Post by pdavi21 »

GoldStar wrote: Tue Feb 19, 2019 1:43 pm
Isabelle77 wrote: Tue Feb 19, 2019 11:46 am
jucor wrote: Tue Feb 19, 2019 8:06 am
pdavi21 wrote: Tue Feb 19, 2019 2:03 am No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
Interesting how you are so sure... are you omniscient? By definition, people who die unexpectedly were not generally anticipating their imminent death. Car accidents, strokes, etc. do happen (my BIL died of a massive stroke while kayaking a couple of years ago -- fit, late '40s, non smoker, needless to say completely unexpected).

Spending a few $$ and some time planning is a good idea -- especially as the OP has two minor children and not insubstantial assets.

pdavi21, do you also go without insurance because you "know" your house will never burn, flood, etc. ?
Growing up, a good friend's parents were killed in a car accident when he was very young. His parents' will saved him and his brother from being raised by his dysfunctional extended family (or foster care) and instead custody was given to his parents' best friends who loved them as their own. That's why the OP needs a will, yesterday.
(at the risk of humoring a troll...) The other problem with just naming beneficiaries (without an estate) is who are you going to name a beneficiary? If you name an adult relative with "hopes" they will take care of your kids they can just take the money and not take your kids. If you name your kids as beneficiaries you are also in trouble since no insurance company is going to simply write out a check to a minor.
Not trolling. I am serious. I am quite certain the OP and/or OP's spouse will survive long enough for at least one child to make it to eighteen (assuming the children don't also die). I am even more certain that they will not die (and/or lose mental competence) at the same time before their children turn eighteen (allowing the survivor to set up will and trust and guardians, etc.). I wish I had statistics to support my certainty, but I am too lazy to look. I guess if OP goes skydiving with spouse, or they work on a fishing boat together, I'd change my tune. OP didn't ask "should", OP asked "NEED". OP does not "need" a will. OP probably should make one, but I wouldn't feel hurried to do so myself, in the same position.

EDIT: and of course there's the philosophical question of whether a dead person is capable of "need[ing]" anything, but that's more along the lines of trolling...
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking
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Re: Do we need a will/trust/etc?

Post by GoldStar »

pdavi21 wrote: Tue Feb 19, 2019 3:25 pm
GoldStar wrote: Tue Feb 19, 2019 1:43 pm
Isabelle77 wrote: Tue Feb 19, 2019 11:46 am
jucor wrote: Tue Feb 19, 2019 8:06 am
pdavi21 wrote: Tue Feb 19, 2019 2:03 am No, you don't. You are not going to both die before your kids both reach 18. If you are worried, handwrite a will with two witnesses (check your state law), but, more importantly, assign beneficiaries. Assigned beneficiaries override wills anyway.
Interesting how you are so sure... are you omniscient? By definition, people who die unexpectedly were not generally anticipating their imminent death. Car accidents, strokes, etc. do happen (my BIL died of a massive stroke while kayaking a couple of years ago -- fit, late '40s, non smoker, needless to say completely unexpected).

Spending a few $$ and some time planning is a good idea -- especially as the OP has two minor children and not insubstantial assets.

pdavi21, do you also go without insurance because you "know" your house will never burn, flood, etc. ?
Growing up, a good friend's parents were killed in a car accident when he was very young. His parents' will saved him and his brother from being raised by his dysfunctional extended family (or foster care) and instead custody was given to his parents' best friends who loved them as their own. That's why the OP needs a will, yesterday.
(at the risk of humoring a troll...) The other problem with just naming beneficiaries (without an estate) is who are you going to name a beneficiary? If you name an adult relative with "hopes" they will take care of your kids they can just take the money and not take your kids. If you name your kids as beneficiaries you are also in trouble since no insurance company is going to simply write out a check to a minor.
Not trolling. I am serious. I am quite certain the OP and/or OP's spouse will survive long enough for at least one child to make it to eighteen (assuming the children don't also die). I am even more certain that they will not die (and/or lose mental competence) at the same time before their children turn eighteen (allowing the survivor to set up will and trust and guardians, etc.). I wish I had statistics to support my certainty, but I am too lazy to look. I guess if OP goes skydiving with spouse, or they work on a fishing boat together, I'd change my tune. OP didn't ask "should", OP asked "NEED". OP does not "need" a will. OP probably should make one, but I wouldn't feel hurried to do so myself, in the same position.

EDIT: and of course there's the philosophical question of whether a dead person is capable of "need[ing]" anything, but that's more along the lines of trolling...
They don't have to go skydiving or fishing - all they need to be doing is driving home from dinner together and come across a drunk-driver - it probably happens more often than you might think (and probably more likely than your fishing and sky-diving examples). In this circumstance the kids because a ward of the state and who knows who ends up with them. The reason why my wife and I felt that we NEEDed a plan was because we really loved our kids and knew exactly who we did and did NOT want to have them. We also wanted to make sure a separate fiscally responsible person would make sure our money became theirs as needed. Without kids I would agree - simply specifying beneficiaries would be fine - why would you care. With kids its a whole other story.
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Re: Do we need a will/trust/etc?

Post by epoxyresin »

GoldStar wrote: Tue Feb 19, 2019 3:56 pm
pdavi21 wrote: Tue Feb 19, 2019 3:25 pm
GoldStar wrote: Tue Feb 19, 2019 1:43 pm
Isabelle77 wrote: Tue Feb 19, 2019 11:46 am
jucor wrote: Tue Feb 19, 2019 8:06 am

Interesting how you are so sure... are you omniscient? By definition, people who die unexpectedly were not generally anticipating their imminent death. Car accidents, strokes, etc. do happen (my BIL died of a massive stroke while kayaking a couple of years ago -- fit, late '40s, non smoker, needless to say completely unexpected).

Spending a few $$ and some time planning is a good idea -- especially as the OP has two minor children and not insubstantial assets.

pdavi21, do you also go without insurance because you "know" your house will never burn, flood, etc. ?
Growing up, a good friend's parents were killed in a car accident when he was very young. His parents' will saved him and his brother from being raised by his dysfunctional extended family (or foster care) and instead custody was given to his parents' best friends who loved them as their own. That's why the OP needs a will, yesterday.
(at the risk of humoring a troll...) The other problem with just naming beneficiaries (without an estate) is who are you going to name a beneficiary? If you name an adult relative with "hopes" they will take care of your kids they can just take the money and not take your kids. If you name your kids as beneficiaries you are also in trouble since no insurance company is going to simply write out a check to a minor.
Not trolling. I am serious. I am quite certain the OP and/or OP's spouse will survive long enough for at least one child to make it to eighteen (assuming the children don't also die). I am even more certain that they will not die (and/or lose mental competence) at the same time before their children turn eighteen (allowing the survivor to set up will and trust and guardians, etc.). I wish I had statistics to support my certainty, but I am too lazy to look. I guess if OP goes skydiving with spouse, or they work on a fishing boat together, I'd change my tune. OP didn't ask "should", OP asked "NEED". OP does not "need" a will. OP probably should make one, but I wouldn't feel hurried to do so myself, in the same position.

EDIT: and of course there's the philosophical question of whether a dead person is capable of "need[ing]" anything, but that's more along the lines of trolling...
They don't have to go skydiving or fishing - all they need to be doing is driving home from dinner together and come across a drunk-driver - it probably happens more often than you might think (and probably more likely than your fishing and sky-diving examples). In this circumstance the kids because a ward of the state and who knows who ends up with them. The reason why my wife and I felt that we NEEDed a plan was because we really loved our kids and knew exactly who we did and did NOT want to have them. We also wanted to make sure a separate fiscally responsible person would make sure our money became theirs as needed. Without kids I would agree - simply specifying beneficiaries would be fine - why would you care. With kids its a whole other story.
I bet it's less likely than you think. What do you think the probability is? Certainly less than a 1 in a thousand chance, which is about the chance of one of them dying in the next 10 years in an auto accident (it's about 1 in 10,000 per year, though of course there's huge variability based on how much you're driving). How much less? I guess it depends on how much you drive together verses apart, but it sounds like they're driving a lot more apart than together. So to make the math easy, I guess you'd guess about a 1 in 1000 chance of it happening, and let's say a will costs $1000. So on a cost-benefit analysis over a population, you'd want it to save a million bucks on average.

They've got $2 million in assets, so at least we're in the right ballpark. Of course you won't lose all of it if you die without a will, but it could be messy. I guess it's hard to value how hard it will be on your kids if you both die at once and you have a will vs. not, which probably depends on your family dynamic and such. And you can treat it like insurance, not necessarily to come out ahead on average, but rather to limit downside, which is worth something.

I'm not saying that it's a bad idea to get a will. Indeed, the probability of both of them dying eventually is 1. They'll want one eventually, so why not do it now?

But I think this attitude of "you NEED IT YESTERDAY" highlights some of the biases of this board, and indeed humans in general. We are terrible at assessing the risks of low-probability events, and how much it's worth it to spend to mitigate them.
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Re: Do we need a will/trust/etc?

Post by bsteiner »

pdavi21 wrote: Tue Feb 19, 2019 3:25 pm ... I am quite certain the OP and/or OP's spouse will survive long enough for at least one child to make it to eighteen (assuming the children don't also die). I am even more certain that they will not die (and/or lose mental competence) at the same time before their children turn eighteen (allowing the survivor to set up will and trust and guardians, etc.). I wish I had statistics to support my certainty, but I am too lazy to look. I guess if OP goes skydiving with spouse, or they work on a fishing boat together, I'd change my tune. OP didn't ask "should", OP asked "NEED". OP does not "need" a will. OP probably should make one, but I wouldn't feel hurried to do so myself, in the same position.
...
I've never had a case where both parents died leaving a child under age 21.

Then again, I've only seen one house burn down but I have fire insurance on my house.
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Re: Do we need a will/trust/etc?

Post by GoldStar »

epoxyresin wrote: Tue Feb 19, 2019 4:45 pm
GoldStar wrote: Tue Feb 19, 2019 3:56 pm
pdavi21 wrote: Tue Feb 19, 2019 3:25 pm
GoldStar wrote: Tue Feb 19, 2019 1:43 pm
Isabelle77 wrote: Tue Feb 19, 2019 11:46 am

Growing up, a good friend's parents were killed in a car accident when he was very young. His parents' will saved him and his brother from being raised by his dysfunctional extended family (or foster care) and instead custody was given to his parents' best friends who loved them as their own. That's why the OP needs a will, yesterday.
(at the risk of humoring a troll...) The other problem with just naming beneficiaries (without an estate) is who are you going to name a beneficiary? If you name an adult relative with "hopes" they will take care of your kids they can just take the money and not take your kids. If you name your kids as beneficiaries you are also in trouble since no insurance company is going to simply write out a check to a minor.
Not trolling. I am serious. I am quite certain the OP and/or OP's spouse will survive long enough for at least one child to make it to eighteen (assuming the children don't also die). I am even more certain that they will not die (and/or lose mental competence) at the same time before their children turn eighteen (allowing the survivor to set up will and trust and guardians, etc.). I wish I had statistics to support my certainty, but I am too lazy to look. I guess if OP goes skydiving with spouse, or they work on a fishing boat together, I'd change my tune. OP didn't ask "should", OP asked "NEED". OP does not "need" a will. OP probably should make one, but I wouldn't feel hurried to do so myself, in the same position.

EDIT: and of course there's the philosophical question of whether a dead person is capable of "need[ing]" anything, but that's more along the lines of trolling...
They don't have to go skydiving or fishing - all they need to be doing is driving home from dinner together and come across a drunk-driver - it probably happens more often than you might think (and probably more likely than your fishing and sky-diving examples). In this circumstance the kids because a ward of the state and who knows who ends up with them. The reason why my wife and I felt that we NEEDed a plan was because we really loved our kids and knew exactly who we did and did NOT want to have them. We also wanted to make sure a separate fiscally responsible person would make sure our money became theirs as needed. Without kids I would agree - simply specifying beneficiaries would be fine - why would you care. With kids its a whole other story.
I bet it's less likely than you think. What do you think the probability is? Certainly less than a 1 in a thousand chance, which is about the chance of one of them dying in the next 10 years in an auto accident (it's about 1 in 10,000 per year, though of course there's huge variability based on how much you're driving). How much less? I guess it depends on how much you drive together verses apart, but it sounds like they're driving a lot more apart than together. So to make the math easy, I guess you'd guess about a 1 in 1000 chance of it happening, and let's say a will costs $1000. So on a cost-benefit analysis over a population, you'd want it to save a million bucks on average.

They've got $2 million in assets, so at least we're in the right ballpark. Of course you won't lose all of it if you die without a will, but it could be messy. I guess it's hard to value how hard it will be on your kids if you both die at once and you have a will vs. not, which probably depends on your family dynamic and such. And you can treat it like insurance, not necessarily to come out ahead on average, but rather to limit downside, which is worth something.

I'm not saying that it's a bad idea to get a will. Indeed, the probability of both of them dying eventually is 1. They'll want one eventually, so why not do it now?

But I think this attitude of "you NEED IT YESTERDAY" highlights some of the biases of this board, and indeed humans in general. We are terrible at assessing the risks of low-probability events, and how much it's worth it to spend to mitigate them.
Yup. I agree the "Need it yesterday" is a bit much. It is definitely an emotional/personal decision. For me, just one thought of a specific in-law trying to get and raise my kids was enough for me to plunk down a few dollars with a lawyer to take care of everything correctly.
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Re: Do we need a will/trust/etc?

Post by FBN2014 »

RadAudit wrote: Tue Feb 19, 2019 3:21 pm OK, maybe not a need; but, …

I had less than you do now when I got a trust. The primary reason was to make as sure as possible that my grandchildren would have a chance to inherit whatever was left over if my kid died after I was gone and the surviving spouse remarried and left the assets to the new wife / new kids, and / or after I died my kid got a divorce and the ex-spouse went after the assets.

Probably all a sells pitch and / or wouldn't happen anyway. And, I'm guessing your YMMV and your kids will turn out OK. Not sure about mine.
Unfortunately you are wrong. My wife's grandfather left it all to his second wife after the first one died. The three daughters got zero. My brother lost everything when he remarried and the second wife stole it all when the marriage went south. It happens more than you realize.
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J295
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Re: Do we need a will/trust/etc?

Post by J295 »

Your situation seems relatively straightforward (assuming first marriage and just the two kids from this marriage).

Get an experienced lawyer and let him/her do their job. If you select someone who is a member of ACTEC and AV rated by Martindale Hubbell there's a strong chance he/she will handle this quite easily. They'll likely recommend (generally speaking as I don't know your state laws) these documents: pourover wills and revocable trusts (or just wills), general durable powers of attorney, and powers of attorney for health care. You'll also want to get guidance on beneficiary designations for various assets and discuss titling of assets. Of course, choosing a guardian will be very important. Other details but you get the drift.

Note: Many parents with millions in assets (including life insurance death benefits) prefer that their children not receive those assets at age 18 (as in the case both parents pass prematurely). Those parents typically use a trust to delay distributions to children (often parceling out the funds in increments, as in at ages 30, 35, and 40). Typically not in the child's best interest to receive millions of dollars at age 18, especially when their parents are both deceased.

Parents do these types of things not because it will help them or they think it will happen, but because they love their family and want to provide what's best for them in the event the unlikely does occur.

Best of luck.
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Re: Do we need a will/trust/etc?

Post by bayview »

1 in a thousand means one thing when considering the risk of an anonymous blob of people.

To me, it has a very different meaning when applied to my family’s needs.

Getting a Will (and possibly creating a trust) is chump change compared to not doing what I can to provide for my family.

Yes, a personal decision, but we’re on the Personal Finance board, right? :D
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
FBN2014
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Re: Do we need a will/trust/etc?

Post by FBN2014 »

bayview wrote: Tue Feb 19, 2019 5:34 pm 1 in a thousand means one thing when considering the risk of an anonymous blob of people.

To me, it has a very different meaning when applied to my family’s needs.

Getting a Will (and possibly creating a trust) is chump change compared to not doing what I can to provide for my family.

Yes, a personal decision, but we’re on the Personal Finance board, right? :D
Most people don't want to spend money if it won't benefit them while they are living. Sad but true.
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miamivice
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Re: Do we need a will/trust/etc?

Post by miamivice »

Thanks all.

To respond to a few points:

1. We absolutely are not interested in spending money today to reduce probate costs should we die. Even if probate cost $40,000, that would mean our kids "only" inherit 1.96 million instead of 2 million. No sense to pay out money today for that purpose. (Maybe as I age I will change my tune, but that is my opinion at age 39.)


2. I agree with the others that the chance that we both die (but our kids survive) in the next 12-14 years to be incredibly low. We are never alone without the kids. While there could be certian car accidents that kill the front passenger and not the rear, we honestly do not drive together as a family very often. My wife and I rarely go on date nights so that chance is also very low.

That being said, having a plan worked out would be a responsible thing to do.

3. It sounds like we do not need a trust today, so that is nice.

4. At this point, I am fine with our kids having $1 million each (or whatever amount) when they turn 18. No idea what they'll do with it but I have no issues with it. They're too young to have proven themselves irresponsible. As they grow into their teenage years, my opinion might change then.
letsgobobby
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Re: Do we need a will/trust/etc?

Post by letsgobobby »

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Last edited by letsgobobby on Thu Apr 18, 2019 1:17 am, edited 1 time in total.
delamer
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Re: Do we need a will/trust/etc?

Post by delamer »

A will with a testamentary trust when you have minor children is basically the same thing as insurance.

You pay a relatively small amount of money to protect your family against a low-probability but high-cost catastrophic event.
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GoldStar
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Re: Do we need a will/trust/etc?

Post by GoldStar »

FBN2014 wrote: Tue Feb 19, 2019 5:38 pm
bayview wrote: Tue Feb 19, 2019 5:34 pm 1 in a thousand means one thing when considering the risk of an anonymous blob of people.

To me, it has a very different meaning when applied to my family’s needs.

Getting a Will (and possibly creating a trust) is chump change compared to not doing what I can to provide for my family.

Yes, a personal decision, but we’re on the Personal Finance board, right? :D
Most people don't want to spend money if it won't benefit them while they are living. Sad but true.
I would disagree - most parents would spend money to benefit their kids once they are gone.
Proof can be seen in how large the life insurance and legal-estate planning industries are.
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GoldStar
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Re: Do we need a will/trust/etc?

Post by GoldStar »

miamivice wrote: Tue Feb 19, 2019 9:57 pm

3. It sounds like we do not need a trust today, so that is nice.

4. At this point, I am fine with our kids having $1 million each (or whatever amount) when they turn 18. No idea what they'll do with it but I have no issues with it. They're too young to have proven themselves irresponsible. As they grow into their teenage years, my opinion might change then.
These two points seem contradictory to me - but perhaps there is some alternative way of doing things I'm not aware of.
How do you assure your kids get $1M each when they turn 18 without a trust?
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miamivice
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Re: Do we need a will/trust/etc?

Post by miamivice »

GoldStar wrote: Wed Feb 20, 2019 10:34 am
miamivice wrote: Tue Feb 19, 2019 9:57 pm

3. It sounds like we do not need a trust today, so that is nice.

4. At this point, I am fine with our kids having $1 million each (or whatever amount) when they turn 18. No idea what they'll do with it but I have no issues with it. They're too young to have proven themselves irresponsible. As they grow into their teenage years, my opinion might change then.
These two points seem contradictory to me - but perhaps there is some alternative way of doing things I'm not aware of.
How do you assure your kids get $1M each when they turn 18 without a trust?
I believe there are two kinds of trusts. The first is folks who move their current assets into a trust right now (i.e., the home is no longer owned by miamivice but now owned by the Miamivice and Miamivice's Wife Joint Trust". This we do not need.

The second is a trust that is created upon the death of my wife and spouse, where our assets go into it until whatever trust terms allow them to be removed. This we would need, however, the likelihood of needing is small enough that I don't wish to bother creating it now.

I think all we need to do is a simple will saying who the beneficiaries are and who takes care of the kids and who is the guardian of the money that should be used for the kids.
delamer
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Re: Do we need a will/trust/etc?

Post by delamer »

miamivice wrote: Wed Feb 20, 2019 7:32 pm
GoldStar wrote: Wed Feb 20, 2019 10:34 am
miamivice wrote: Tue Feb 19, 2019 9:57 pm

3. It sounds like we do not need a trust today, so that is nice.

4. At this point, I am fine with our kids having $1 million each (or whatever amount) when they turn 18. No idea what they'll do with it but I have no issues with it. They're too young to have proven themselves irresponsible. As they grow into their teenage years, my opinion might change then.
These two points seem contradictory to me - but perhaps there is some alternative way of doing things I'm not aware of.
How do you assure your kids get $1M each when they turn 18 without a trust?
I believe there are two kinds of trusts. The first is folks who move their current assets into a trust right now (i.e., the home is no longer owned by miamivice but now owned by the Miamivice and Miamivice's Wife Joint Trust". This we do not need.

The second is a trust that is created upon the death of my wife and spouse, where our assets go into it until whatever trust terms allow them to be removed. This we would need, however, the likelihood of needing is small enough that I don't wish to bother creating it now.

I think all we need to do is a simple will saying who the beneficiaries are and who takes care of the kids and who is the guardian of the money that should be used for the kids.
But if you take care of the items in your last sentence, it will take a trivial amount of additional time and money to provide for the establishment of trusts in your wills.
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