How do wills work (in a case like mine)

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oldguy
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How do wills work (in a case like mine)

Post by oldguy » Tue Nov 12, 2019 11:49 pm

I don't have a legal will yet. Soon to turn 63. I have several sizable bank accounts and brokerage account, all with my wife designated as beneficiary. If i recall correctly, there is no provision to name a contingent beneficiary, in case both me and my wife were to expire at the same time.

I have one adult child. Will a legal will allow me to designate my kid as my heir and her then be able to collect the monies i have in bank accounts, etc, if the worst were to happen and we both died at the same time (even though she is not named as beneficiary)?

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bengal22
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Re: How do wills work (in a case like mine)

Post by bengal22 » Wed Nov 13, 2019 12:45 am

I am surprised if your bank or brokerage account won't allow you to name a secondary beneficiary. That way your child gets the monies if both you and your wife dies.. with a will you will have to go through probate and the court will bless the passing on of your estate. If the executor does not have the confidence to do the probate paperwork them you will have to give a lawyer substantial fees to complete easy paperwork(in your case).
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Re: How do wills work (in a case like mine)

Post by RickBoglehead » Wed Nov 13, 2019 4:24 am

Except for Vanguard's joint brokerage account, I have never found an inability to name secondary beneficiaries.
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Re: How do wills work (in a case like mine)

Post by ChrisLA » Wed Nov 13, 2019 6:06 am

Will a legal will allow me to designate my kid as my heir and her then be able to collect the monies i have in bank accounts, etc, if the worst were to happen and we both died at the same time (even though she is not named as beneficiary)?
Even if you die without a will naming your daughter as next in line following your wife, the law in all 50 states is such that your daughter (along with any other children you might have) will inherit those accounts, along with the rest of your estate, since by default a person's children are the heirs when no spouse survives. However, a will would be nice to have so it's absolutely clear you would like this to be the case and to keep unsavory characters from trying to butt in.

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Re: How do wills work (in a case like mine)

Post by fourwheelcycle » Wed Nov 13, 2019 9:00 am

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Last edited by fourwheelcycle on Wed Nov 13, 2019 9:24 am, edited 1 time in total.

fourwheelcycle
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Re: How do wills work (in a case like mine)

Post by fourwheelcycle » Wed Nov 13, 2019 9:08 am

I agree with others - I have never encountered financial accounts (except Vanguard's joint taxable accounts) that do not allow you to designate secondary beneficiaries. Regardless, if you die first with your wife as the primary beneficiary she will inherit everything, with no strings attached. That is also what will happen if you simply change all of your accounts to joint accounts with your wife. Then you could name your daughter as the primary beneficiary or Transfer on Death (TOD) beneficiary for each of your joint accounts.

Using beneficiary or TOD designations is a very basic (crude) way to leave your estate. Depending on your state, there may be no way to designate TOD recipients for your house or other real estate deeds, your vehicle titles, or the contents of your house. In that case, your daughter would still have to submit your estate to probate, by herself or with the help of an attorney.

A will would also require your daughter to submit your estate to probate. My wife and I decided to put all of our non-retirement savings and our home into a joint revocable trust (JRT), with a Deed of Gift to transfer all of our other possessions to the JRT. Then we changed the account owner for all of our accounts and our house from our names to the name of our trust. With a JRT you still file all of your taxes in your own names, so the JRT does not complicate our daily financial affairs at all.

The advantage of a JRT over a will is that there is no need for probate. When you die your wife simply remains as trustee of the JRT. You can name your daughter as the successor trustee for your JRT when the second of you dies. The advantage of a JRT over beneficiary or TOD designations is that the JRT can provide for any number of "what if" situations. If your daughter dies near in time to you and/or your wife the JRT can set up one or more trusts for her minor children, if any, or give your savings to other relatives or charities you designate. If your daughter's personal life is complicated by divorce, illness, debt, or poor financial habits you could name another person or institution as successor trustee to your JRT, with instructions to that trustee regarding management and distribution of your savings to benefit your daughter or others.

The cost for a simple JRT is similar to the cost for a simple will, and the cost for a JRT with detailed provisions is similar to the cost for a will with detailed provisions. For either a will or a JRT it is important to use an attorney who is knowledgeable and experienced with the estate laws of your state.
Last edited by fourwheelcycle on Wed Nov 13, 2019 9:37 am, edited 1 time in total.

michaeljc70
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Re: How do wills work (in a case like mine)

Post by michaeljc70 » Wed Nov 13, 2019 9:32 am

As others said, your child will inherit everything if you both pass. One thing to consider though is how probate works in your state. In my state, probate can be quite expensive. For that reason, a lot of people use trusts.

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oldguy
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Re: How do wills work (in a case like mine)

Post by oldguy » Wed Nov 13, 2019 10:56 am

Wow ... lots of good info in these replies. I thank you all!!!

delamer
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Re: How do wills work (in a case like mine)

Post by delamer » Wed Nov 13, 2019 1:29 pm

Another aspect of this is whether you want your daughter to inherit a substantial amount of money outright.

If you set up a testamentary trust via your/your wife’s will, then the money will go into trust for your daughter which offers protection for her in the event of divorce, creditors, Medicaid qualification, etc.

When it comes to each state’s laws regarding inheritances, taxes, etc., you just don’t know what you don’t know.

Don’t jeopardize your plans by being a do-it-yourselfer. Find a good estate attorney, and spend a couple thousand dollars to get your situation in order.

You and your wife also should have end-of-life/disability documents like medical power-of-attorney and a living will, which the attorney will prepare.

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Re: How do wills work (in a case like mine)

Post by senex » Wed Nov 13, 2019 1:34 pm

fourwheelcycle wrote:
Wed Nov 13, 2019 9:08 am
[...] Depending on your state, there may be no way to designate TOD recipients for your house or other real estate deeds, your vehicle titles, or the contents of your house. In that case, your daughter would still have to submit your estate to probate, by herself or with the help of an attorney.

A will would also require your daughter to submit your estate to probate.

[...] the JRT does not complicate our daily financial affairs at all.
Agree with most of fourwheelcycle's post, but have some questions & corrections to the quoted points:

1) Vehicle title in some states can be done by affidavit (no actual court involvement) if the probate estate (i.e. the stuff not passing via beneficiary designation) is small. Search for "small estate" for your state.

2) In personal experience, for situations like OP's (simple family dynamics), I haven't seen house contents go through probate. The daughter just goes in and takes/sells/donates the stuff. There's no probate police and in my family I haven't seen any disputes about ordinary household items. Maybe expensive jewelry etc is an exception, but really, most people's household goods aren't worth much resale.

3) The existence of a will does not force or require probate in states I've lived (I would guess in all states, but not an attorney). You open probate if you want or need to do so (say, to resolve a dispute among heirs, or retitle something that didn't pass via joint owner or TOD or beneficiary designation). Also, a creditor may be able to force probate if there are unpaid bills. But otherwise, in simple situations, you can easily avoid opening probate, regardless of the existence or contents of a will. In cases I've seen, when everything passes via TOD/beneficiary and the daughter has the house keys, there was no need to a court or a lawyer.

4) When you say the JRT doesn't complicate affairs, I'm curious, does it limit your insurance options? I have wondered if some insurers won't quote policies on houses held in trust. Also, I think some states remove property tax exemptions for homes held in trust vs outright.?

tesuzuki2002
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Re: How do wills work (in a case like mine)

Post by tesuzuki2002 » Wed Nov 13, 2019 1:48 pm

bengal22 wrote:
Wed Nov 13, 2019 12:45 am
I am surprised if your bank or brokerage account won't allow you to name a secondary beneficiary. That way your child gets the monies if both you and your wife dies.. with a will you will have to go through probate and the court will bless the passing on of your estate. If the executor does not have the confidence to do the probate paperwork them you will have to give a lawyer substantial fees to complete easy paperwork(in your case).
I don't have a 2nd beneficiary on anything... sounds crazy... but currently I just have it elected to one of my parents. No spouse to hand it over to and I know they will take care of setting up a trust for my son... so I've left it by default... recently crossing over into 7 figures... I need to get something more sound in place...


2020 goals!!

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Re: How do wills work (in a case like mine)

Post by michaeljc70 » Wed Nov 13, 2019 2:04 pm

senex wrote:
Wed Nov 13, 2019 1:34 pm
fourwheelcycle wrote:
Wed Nov 13, 2019 9:08 am
[...] Depending on your state, there may be no way to designate TOD recipients for your house or other real estate deeds, your vehicle titles, or the contents of your house. In that case, your daughter would still have to submit your estate to probate, by herself or with the help of an attorney.

A will would also require your daughter to submit your estate to probate.

[...] the JRT does not complicate our daily financial affairs at all.
Agree with most of fourwheelcycle's post, but have some questions & corrections to the quoted points:

1) Vehicle title in some states can be done by affidavit (no actual court involvement) if the probate estate (i.e. the stuff not passing via beneficiary designation) is small. Search for "small estate" for your state.

2) In personal experience, for situations like OP's (simple family dynamics), I haven't seen house contents go through probate. The daughter just goes in and takes/sells/donates the stuff. There's no probate police and in my family I haven't seen any disputes about ordinary household items. Maybe expensive jewelry etc is an exception, but really, most people's household goods aren't worth much resale.

3) The existence of a will does not force or require probate in states I've lived (I would guess in all states, but not an attorney). You open probate if you want or need to do so (say, to resolve a dispute among heirs, or retitle something that didn't pass via joint owner or TOD or beneficiary designation). Also, a creditor may be able to force probate if there are unpaid bills. But otherwise, in simple situations, you can easily avoid opening probate, regardless of the existence or contents of a will. In cases I've seen, when everything passes via TOD/beneficiary and the daughter has the house keys, there was no need to a court or a lawyer.

4) When you say the JRT doesn't complicate affairs, I'm curious, does it limit your insurance options? I have wondered if some insurers won't quote policies on houses held in trust. Also, I think some states remove property tax exemptions for homes held in trust vs outright.?
In my state (Illinois) any estate worth over $100k goes through probate (ignoring joint ownership, trusts, POD, etc.) In simple cases it costs around $5k from what I've read.
Last edited by michaeljc70 on Wed Nov 13, 2019 2:08 pm, edited 1 time in total.

senex
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Re: How do wills work (in a case like mine)

Post by senex » Wed Nov 13, 2019 2:04 pm

delamer wrote:
Wed Nov 13, 2019 1:29 pm
Another aspect of this is whether you want your daughter to inherit a substantial amount of money outright.

If you set up a testamentary trust via your/your wife’s will, then the money will go into trust for your daughter which offers protection for her in the event of divorce, creditors, Medicaid qualification, etc.

When it comes to each state’s laws regarding inheritances, taxes, etc., you just don’t know what you don’t know.

Don’t jeopardize your plans by being a do-it-yourselfer. Find a good estate attorney, and spend a couple thousand dollars to get your situation in order.

You and your wife also should have end-of-life/disability documents like medical power-of-attorney and a living will, which the attorney will prepare.
On the other hand, trusts are complicated and expensive. There exist scenarios in which losing 1-2%+/year to trust costs (outrageous to a boglehead, yet you can find numerous threads about it) will leave you worse off than, say, self-managing and losing half in a divorce. Pretending you're poor to get subsidized care is... let's say, not universally deemed ethical.

Every state I've lived has had statutory medical POA forms available for free download online.

The trouble with "find a good estate attorney" is that half of estate attorneys are worse than the median. How will you tell? A good one may ask the right questions and say "you don't need me to do anything -- just setup your beneficiaries." A bad one may complexify your plans with all kinds of unnecessary items that will bleed away half your assets vs. the simple alternatives. (Interestingly, this is exactly the effect of most financial planners)

For a small estate and simple family dynamics, using joint & TOD & beneficiary designations can be a clean, simple, comprehendible, affordable solution. Whether that applies to OP depends (among other things) on what he means by "sizable" in his original post.

fourwheelcycle
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Re: How do wills work (in a case like mine)

Post by fourwheelcycle » Wed Nov 13, 2019 3:36 pm

senex wrote:
Wed Nov 13, 2019 1:34 pm
fourwheelcycle wrote:
Wed Nov 13, 2019 9:08 am
[...] Depending on your state, there may be no way to designate TOD recipients for your house or other real estate deeds, your vehicle titles, or the contents of your house. In that case, your daughter would still have to submit your estate to probate, by herself or with the help of an attorney.

A will would also require your daughter to submit your estate to probate.

[...] the JRT does not complicate our daily financial affairs at all.
Agree with most of fourwheelcycle's post, but have some questions & corrections to the quoted points:

1) Vehicle title in some states can be done by affidavit (no actual court involvement) if the probate estate (i.e. the stuff not passing via beneficiary designation) is small. Search for "small estate" for your state.

2) In personal experience, for situations like OP's (simple family dynamics), I haven't seen house contents go through probate. The daughter just goes in and takes/sells/donates the stuff. There's no probate police and in my family I haven't seen any disputes about ordinary household items. Maybe expensive jewelry etc is an exception, but really, most people's household goods aren't worth much resale.

3) The existence of a will does not force or require probate in states I've lived (I would guess in all states, but not an attorney). You open probate if you want or need to do so (say, to resolve a dispute among heirs, or retitle something that didn't pass via joint owner or TOD or beneficiary designation). Also, a creditor may be able to force probate if there are unpaid bills. But otherwise, in simple situations, you can easily avoid opening probate, regardless of the existence or contents of a will. In cases I've seen, when everything passes via TOD/beneficiary and the daughter has the house keys, there was no need to a court or a lawyer.

4) When you say the JRT doesn't complicate affairs, I'm curious, does it limit your insurance options? I have wondered if some insurers won't quote policies on houses held in trust. Also, I think some states remove property tax exemptions for homes held in trust vs outright.?
I suspect the OP's estate, at present, is larger than the small estate provisions of any state. Unless he takes some action subsequent to his inquiry above his daughter would have to submit his estate to probate. If he decides to use a will she would still have to submit his estate to probate unless he makes other provisions to help her avoid probate.

My father lives in a state that has a provision for no probate in the event of small estates, under $15K. He sold his house and gave most of the contents to his children or to charity, then sold the rest to an estate liquidator, before he moved to an assisted living facility. If he had not done this the value of his house and the contents, or even just the contents, would have exceeded his state's small estate limit.

He still has his car, which is worth less than $15K, but his state provides no opportunity for car title TOD designations and no way for anyone to sell his car or even sign the title to a charity after he dies, except by authorization from his state's probate court. The only solution, as you suggest, is to go to his state's probate court and sign an affidavit that his estate is less than $15K.

My father has a will that gives his estate in equal shares to his children. I am his DPOA and executor. I live more than 1,200 miles away and I have no desire to travel to his state several times to complete the necessary probate steps. My solution, with agreement from my siblings, has been to designate his children as equal share TOD recipients for the bulk of his estate, which I have consolidated at Vanguard with full agent authorization for myself. I have put the remainder of his estate in a joint bank account owned by my father and me, which also avoids probate and will provide me enough money to pay his final expenses, then gift the remainder to my siblings in equal shares.

My wife and I easily addressed the insurance and property tax aspects of our JRT. Our cars are included in our Deed of Gift, so they remain titled to us and covered by our regular car insurance. Our home insurer, AMICA, simply changed the insured party on our home and contents replacement cost insurance to our JRT, with no fee or premium increase to us. Our town was notified by the state when we re-titled our house and property deed to our JRT. Our town now issues our property tax bill to our JRT, with no change in valuation or tax status. When we looked at our town's (public) property tax list we found that many of our neighbors' homes are also owned by trusts!

delamer
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Re: How do wills work (in a case like mine)

Post by delamer » Wed Nov 13, 2019 4:02 pm

fourwheelcycle wrote:
Wed Nov 13, 2019 3:36 pm
senex wrote:
Wed Nov 13, 2019 1:34 pm
fourwheelcycle wrote:
Wed Nov 13, 2019 9:08 am
[...] Depending on your state, there may be no way to designate TOD recipients for your house or other real estate deeds, your vehicle titles, or the contents of your house. In that case, your daughter would still have to submit your estate to probate, by herself or with the help of an attorney.

A will would also require your daughter to submit your estate to probate.

[...] the JRT does not complicate our daily financial affairs at all.
Agree with most of fourwheelcycle's post, but have some questions & corrections to the quoted points:

1) Vehicle title in some states can be done by affidavit (no actual court involvement) if the probate estate (i.e. the stuff not passing via beneficiary designation) is small. Search for "small estate" for your state.

2) In personal experience, for situations like OP's (simple family dynamics), I haven't seen house contents go through probate. The daughter just goes in and takes/sells/donates the stuff. There's no probate police and in my family I haven't seen any disputes about ordinary household items. Maybe expensive jewelry etc is an exception, but really, most people's household goods aren't worth much resale.

3) The existence of a will does not force or require probate in states I've lived (I would guess in all states, but not an attorney). You open probate if you want or need to do so (say, to resolve a dispute among heirs, or retitle something that didn't pass via joint owner or TOD or beneficiary designation). Also, a creditor may be able to force probate if there are unpaid bills. But otherwise, in simple situations, you can easily avoid opening probate, regardless of the existence or contents of a will. In cases I've seen, when everything passes via TOD/beneficiary and the daughter has the house keys, there was no need to a court or a lawyer.

4) When you say the JRT doesn't complicate affairs, I'm curious, does it limit your insurance options? I have wondered if some insurers won't quote policies on houses held in trust. Also, I think some states remove property tax exemptions for homes held in trust vs outright.?
I suspect the OP's estate, at present, is larger than the small estate provisions of any state. Unless he takes some action subsequent to his inquiry above his daughter would have to submit his estate to probate. If he decides to use a will she would still have to submit his estate to probate unless he makes other provisions to help her avoid probate.

My father lives in a state that has a provision for no probate in the event of small estates, under $15K. He sold his house and gave most of the contents to his children or to charity, then sold the rest to an estate liquidator, before he moved to an assisted living facility. If he had not done this the value of his house and the contents, or even just the contents, would have exceeded his state's small estate limit.

He still has his car, which is worth less than $15K, but his state provides no opportunity for car title TOD designations and no way for anyone to sell his car or even sign the title to a charity after he dies, except by authorization from his state's probate court. The only solution, as you suggest, is to go to his state's probate court and sign an affidavit that his estate is less than $15K.

My father has a will that gives his estate in equal shares to his children. I am his DPOA and executor. I live more than 1,200 miles away and I have no desire to travel to his state several times to complete the necessary probate steps. My solution, with agreement from my siblings, has been to designate his children as equal share TOD recipients for the bulk of his estate, which I have consolidated at Vanguard with full agent authorization for myself. I have put the remainder of his estate in a joint bank account owned by my father and me, which also avoids probate and will provide me enough money to pay his final expenses, then gift the remainder to my siblings in equal shares.

My wife and I easily addressed the insurance and property tax aspects of our JRT. Our cars are included in our Deed of Gift, so they remain titled to us and covered by our regular car insurance. Our home insurer, AMICA, simply changed the insured party on our home and contents replacement cost insurance to our JRT, with no fee or premium increase to us. Our town was notified by the state when we re-titled our house and property deed to our JRT. Our town now issues our property tax bill to our JRT, with no change in valuation or tax status. When we looked at our town's (public) property tax list we found that many of our neighbors' homes are also owned by trusts!
What happens if you predecease your father?

delamer
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Re: How do wills work (in a case like mine)

Post by delamer » Wed Nov 13, 2019 4:18 pm

senex wrote:
Wed Nov 13, 2019 2:04 pm
delamer wrote:
Wed Nov 13, 2019 1:29 pm
Another aspect of this is whether you want your daughter to inherit a substantial amount of money outright.

If you set up a testamentary trust via your/your wife’s will, then the money will go into trust for your daughter which offers protection for her in the event of divorce, creditors, Medicaid qualification, etc.

When it comes to each state’s laws regarding inheritances, taxes, etc., you just don’t know what you don’t know.

Don’t jeopardize your plans by being a do-it-yourselfer. Find a good estate attorney, and spend a couple thousand dollars to get your situation in order.

You and your wife also should have end-of-life/disability documents like medical power-of-attorney and a living will, which the attorney will prepare.
On the other hand, trusts are complicated and expensive. There exist scenarios in which losing 1-2%+/year to trust costs (outrageous to a boglehead, yet you can find numerous threads about it) will leave you worse off than, say, self-managing and losing half in a divorce. Pretending you're poor to get subsidized care is... let's say, not universally deemed ethical.

Every state I've lived has had statutory medical POA forms available for free download online.

The trouble with "find a good estate attorney" is that half of estate attorneys are worse than the median. How will you tell? A good one may ask the right questions and say "you don't need me to do anything -- just setup your beneficiaries." A bad one may complexify your plans with all kinds of unnecessary items that will bleed away half your assets vs. the simple alternatives. (Interestingly, this is exactly the effect of most financial planners)

For a small estate and simple family dynamics, using joint & TOD & beneficiary designations can be a clean, simple, comprehendible, affordable solution. Whether that applies to OP depends (among other things) on what he means by "sizable" in his original post.
Not all trusts are complicated and expensive, just like not all estates are small and not all family dynamics are simple.

If you do a reasonable amount of online research, it shouldn’t be difficult to determine if an attorney is giving you solid advice regarding estate planning. You don’t need the best practitioner in the state; you need someone who can make sure you have the documents that you need and that they are drawn up properly.

And I’d think having an attorney in place who can help a surviving spouse or child(ren) in the event of your death would be an advantage in-and-of itself.

Katietsu
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Re: How do wills work (in a case like mine)

Post by Katietsu » Wed Nov 13, 2019 4:38 pm

I have always been able to name a contingent beneficiary for a retirement account and for brokerage accounts. I have never been able to name a contingent beneficiary for a traditional bank checking, savings or CD. So some of the variation in posts may be related to the type of institutions and accounts that each poster has experience with.

A will may end up being irrelevant and probate never needed if everything passes to a named beneficiary. But since none of us can know that in advance, I suspect everyone would recommend a will.

I am always wary of most specific advice about trusts on BH. These are so state specific as well as specific to ones own life. In a state where I have served as executor, handling a trust after death is just as expensive and just as public as in the situation without a trust. On the other hand, the savings and privacy provided by a trust for California residents is widely discussed. So, I would think the comments here would be best used to help frame your discussion with an estate lawyer in your own location.

fourwheelcycle
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Re: How do wills work (in a case like mine)

Post by fourwheelcycle » Wed Nov 13, 2019 5:40 pm

delamer wrote:
Wed Nov 13, 2019 4:02 pm
What happens if you predecease your father?
In my experience estate documents always name someone to perform the named individual's duties if that person is unable to perform them. My father's DPOA and will name one of my siblings as successor to perform each appointed role if I "die, become incapacitated, or resign". With my father's permission and encouragement, I keep my designated successor updated on my father's finances and Medicare insurance plans. Having said that, I am in my early 70s and my father is in his late 90s, so it is likely I will not predecease him.

mickroark
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Re: How do wills work (in a case like mine)

Post by mickroark » Thu Nov 14, 2019 5:38 pm

Darn stupid not to have a legal Last will and Testament. Read about folks that didn't. :dollar

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FIREchief
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Re: How do wills work (in a case like mine)

Post by FIREchief » Thu Nov 14, 2019 8:17 pm

oldguy wrote:
Tue Nov 12, 2019 11:49 pm
If i recall correctly, there is no provision to name a contingent beneficiary, in case both me and my wife were to expire at the same time.
In addition to all the excellent advice already given...…

Does the custodian's beneficiary designation allow for a "per stirpes" election?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Topic Author
oldguy
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Re: How do wills work (in a case like mine)

Post by oldguy » Thu Nov 14, 2019 8:51 pm

I double checked with each of my major savings accounts (banks) and none of them allow a contingent. You can name multiple beneficiaries and split the % any way you like, but no contingent beneficiary is allowed. I have not checked with my broker.

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FIREchief
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Re: How do wills work (in a case like mine)

Post by FIREchief » Thu Nov 14, 2019 8:55 pm

oldguy wrote:
Thu Nov 14, 2019 8:51 pm
I double checked with each of my major savings accounts (banks) and none of them allow a contingent. You can name multiple beneficiaries and split the % any way you like, but no contingent beneficiary is allowed. I have not checked with my broker.
If they allow a per stirpes designation, it will likely accomplish what you want. That said, you really may need to move your assets to better institutions.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: How do wills work (in a case like mine)

Post by bsteiner » Fri Nov 15, 2019 9:34 am

delamer wrote:
Wed Nov 13, 2019 1:29 pm
Another aspect of this is whether you want your daughter to inherit a substantial amount of money outright.

If you set up a testamentary trust via your/your wife’s will, then the money will go into trust for your daughter which offers protection for her in the event of divorce, creditors, Medicaid qualification, etc.

When it comes to each state’s laws regarding inheritances, taxes, etc., you just don’t know what you don’t know.

Don’t jeopardize your plans by being a do-it-yourselfer. Find a good estate attorney, and spend a couple thousand dollars to get your situation in order.
...
More than a "couple" if you want a good one, but perhaps worth it since the original poster said the amount involved was "sizable."
michaeljc70 wrote:
Wed Nov 13, 2019 2:04 pm
...
In my state (Illinois) any estate worth over $100k goes through probate (ignoring joint ownership, trusts, POD, etc.) In simple cases it costs around $5k from what I've read.
That's a reasonable estimate in most cases in most states. The work to probate the Will is the same regardless of whether the estate is $100,000 or $100 million.
senex wrote:
Wed Nov 13, 2019 2:04 pm
delamer wrote:
Wed Nov 13, 2019 1:29 pm
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If you set up a testamentary trust via your/your wife’s will, then the money will go into trust for your daughter which offers protection for her in the event of divorce, creditors, Medicaid qualification, etc.
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On the other hand, trusts are complicated and expensive. There exist scenarios in which losing 1-2%+/year to trust costs (outrageous to a boglehead, yet you can find numerous threads about it) will leave you worse off than, say, self-managing and losing half in a divorce. Pretending you're poor to get subsidized care is... let's say, not universally deemed ethical.
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The trouble with "find a good estate attorney" is that half of estate attorneys are worse than the median. How will you tell? A good one may ask the right questions and say "you don't need me to do anything -- just setup your beneficiaries." A bad one may complexify your plans with all kinds of unnecessary items that will bleed away half your assets vs. the simple alternatives. (Interestingly, this is exactly the effect of most financial planners)
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The trust for the daughter need not be complicated or expensive. If the daughter is capable, she could be a trustee together with someone she's comfortable with as co-trustee, and they could invest the money in low-cost index funds if they want.

Finding a lawyer is like finding a doctor, dentist, plumber, auto mechanic. Ask for some recommendations. Check their bios and their firms' websites and see if they seem appropriate.
fourwheelcycle wrote:
Wed Nov 13, 2019 3:36 pm
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My father has a will that gives his estate in equal shares to his children. I am his DPOA and executor. I live more than 1,200 miles away and I have no desire to travel to his state several times to complete the necessary probate steps. ...
You shouldn't have to travel in connection with the probate of his Will. We've had executors and administrators much more than 1,200 miles from where the Will was probated, including several in other countries including the UK, Spain and Italy. The lawyer (or paralegal under the lawyer's supervision) fills out some forms, you sign them, and they submit the forms to the court together with the Will, a death certificate and a check or credit card payment for the filing fee.

fourwheelcycle
Posts: 727
Joined: Sun May 25, 2014 5:55 pm

Re: How do wills work (in a case like mine)

Post by fourwheelcycle » Fri Nov 15, 2019 11:26 am

bsteiner wrote:
Fri Nov 15, 2019 9:34 am
michaeljc70 wrote:
Wed Nov 13, 2019 2:04 pm
...
In my state (Illinois) any estate worth over $100k goes through probate (ignoring joint ownership, trusts, POD, etc.) In simple cases it costs around $5k from what I've read.
That's a reasonable estimate in most cases in most states. The work to probate the Will is the same regardless of whether the estate is $100,000 or $100 million.
fourwheelcycle wrote:
Wed Nov 13, 2019 3:36 pm
...
My father has a will that gives his estate in equal shares to his children. I am his DPOA and executor. I live more than 1,200 miles away and I have no desire to travel to his state several times to complete the necessary probate steps. ...
You shouldn't have to travel in connection with the probate of his Will.
I agree, you'd think it it could be done by mail. However, the (qualified) attorney my father used to prepare his will did not include his state's required language to make it self-proving. That means at least one of the witnesses to the original will, the attorney or his secretary, must appear personally in court to testify during the first phase of probate. The attorney offered to arrange for the court appearances and complete and submit all the forms on my behalf (after I assembled and provided all of the required information). In any event, I do not want to pay $5,000 to avoid the task of designating TOD beneficiaries for my father's Vanguard account.

Please note, my father's will is very simple. It does provide for trusts in the event any of his children are deceased, with minor surviving descendants, but none of my siblings, or their adult children, are deceased, so TOD designations should not override important provisions of his will. If anything changes before my father dies I can change from TOD to probate. Even with probate I would want to keep the joint banking account I have set up (with my father's and siblings' permission) in order to provide immediate access to sufficient funds for his final expenses.

bsteiner
Posts: 4413
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: How do wills work (in a case like mine)

Post by bsteiner » Fri Nov 15, 2019 2:47 pm

fourwheelcycle wrote:
Fri Nov 15, 2019 11:26 am
bsteiner wrote:
Fri Nov 15, 2019 9:34 am
michaeljc70 wrote:
Wed Nov 13, 2019 2:04 pm
...
In my state (Illinois) any estate worth over $100k goes through probate (ignoring joint ownership, trusts, POD, etc.) In simple cases it costs around $5k from what I've read.
That's a reasonable estimate in most cases in most states. The work to probate the Will is the same regardless of whether the estate is $100,000 or $100 million.
fourwheelcycle wrote:
Wed Nov 13, 2019 3:36 pm
...
My father has a will that gives his estate in equal shares to his children. I am his DPOA and executor. I live more than 1,200 miles away and I have no desire to travel to his state several times to complete the necessary probate steps. ...
You shouldn't have to travel in connection with the probate of his Will.
I agree, you'd think it it could be done by mail. However, the (qualified) attorney my father used to prepare his will did not include his state's required language to make it self-proving. That means at least one of the witnesses to the original will, the attorney or his secretary, must appear personally in court to testify during the first phase of probate. The attorney offered to arrange for the court appearances and complete and submit all the forms on my behalf (after I assembled and provided all of the required information). In any event, I do not want to pay $5,000 to avoid the task of designating TOD beneficiaries for my father's Vanguard account.

Please note, my father's will is very simple. It does provide for trusts in the event any of his children are deceased, with minor surviving descendants, but none of my siblings, or their adult children, are deceased, so TOD designations should not override important provisions of his will. If anything changes before my father dies I can change from TOD to probate. Even with probate I would want to keep the joint banking account I have set up (with my father's and siblings' permission) in order to provide immediate access to sufficient funds for his final expenses.
Self-proving affidavits (which generally let you probate the Will without having to find the witnesses) have been standard for about 40 years in most states. Of course, in an emergency, where a notary isn't available, it's better to get the Will signed even if without the affidavit.

If you don't have a self-proving affidavit, the procedure varies from state to state. In some states, such as New York, the witnesses can sign the affidavit after the testator dies. In New Jersey, an in-state witness signs the affidavit in court (but can go to the court in his/her home county), but an out-of-state witness can do it by mail. In some states, no affidavit is needed.

Your father may want to provide for his children in separate trusts under his Will rather than outright (whether under his Will or otherwise) if there's a reasonable chance that at least one child may have a taxable estate, get divorced, outlive his/her spouse and remarry, have a creditor problem, or go into a nursing home and want Medicaid.

If he has more than one child, having his assets pass under his Will makes it easier to get his debts, taxes and expenses paid if one child might not cooperate.

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