estate planning, why minors = hire attourney?

[bling]

subject says it all...

i've been reading/searching up older threads here and pretty much as soon as minors are mentioned there are a ton of immediate responses that tell the OP to hire an experienced lawyer instead of going through an online service like legalzoom.

we have two young children of our own, no step-children. we own our one and only home. everything else is investments; 401k, IRA, HSA, 529s, brokerage. that's it. we also have life insurance policies, designed to fund all living costs up until and including college expenses.

in the event of our simultaneous demise, we both have siblings who could take guardianship. our trust would probably dictate something like allowing the guardian to take out X per month until our kids are adults. then lump sum at various ages to our kids until it's all distributed.

i don't see how our situation is "complex". in fact, it sounds very normal and routine. i'm not sure what kind of advice i'm hoping to get from an experienced lawyer for this.

what am i missing? thanks.

[HomeStretch]

My personal beliefs include “you get what you pay for” and “you don’t know what you don’t know.”

I am not a legal expert, so for estate planning I use an experienced estate attorney. In the scenario that both spouse and I died leaving minor children, I wanted to make sure my kids were taken care of to the best of my ability. So for that I hired an attorney and gladly paid the fees.

I recommend the same to posters asking for estate planning advice especially when it involves minors, guardianship, trusts, etc.

[senex]

When I was in a similar situation to you, I used software wills. It allowed easy setup of testamentary trusts (trusts created by your will) for minor children. The first time I reviewed an attorney-drafted will, I was surprised how similar it was to the previous software wills.

If your situation is complicated, an attorney can add lots of value. If you have trouble making hard decisions, or don't want to educate yourself on the basics, an attorney can walk you through it. If you have a lot of money, an attorney can optimize the trusts in various ways.

For straightforward situations, I think there is an unhealthy amount of fear-mongering about software wills. My biggest gripe about the software I used: it wasn't super clear on the importance of removing children as beneficiaries at financial institutions, thus letting the assets flow through your estate into the testamentary trusts. Then again, at that time, my assets were significantly less than my life insurance, so most of the money would have ended up in trust anyway.

[Grt2bOutdoors]

The value of all accounts and life insurance are? You want to divest the funds to the minors at what age? Your fine if their buddy convinced them to invest in their hot taco restaurant and bar at age 21, 25 or never? You’re fine if your heirs creditors come after them for your legacy? You’re fine if they decide to be beach bums for the rest of their life?

[tibbitts]

what am i missing? thanks.

I don't think you're missing anything: you could just leave all the assets to the chosen sibling and be done with it, as long there's not some obscure state limitation that would prevent that (but software should identify that.) I'm leaving everything to one person and I'm sure she'll do with it what's in my instructions, adjusting them to circumstances as they change in ways I can't foresee now.

Do be aware of the tax implications, especially now, for the sibling inheriting tax-deferred accounts.

[stan1]

When dollar values aren't given people here tend to assume someone is very wealthy. A $300K estate does not need to be managed like a $10M estate (including life insurance). Sometimes people don't trust the guardian (good parent but not good with money).

I agree for at least 90% of American families (maybe 95%) a LegalZoom product is fine and is better than nothing.

[Soon2BXProgrammer]

subject says it all...

what am i missing? thanks.

Just because you hire an attorney, doesn't mean it need to be expensive. Some have basic packages that are not that much more expensive then other methods, but you get to have a short conversation with the attorney. Also, the attorney i spoke with mentioned a few unique issues about our state that I should consider addressing.

The tiny advice I got, was worth the extra money.

[humblecoder]

After my wife and I got married and we created our first wills, we used a lawyer.

After we had children and needed to update our wills, we used a lawyer.

When we needed to adjust our wills because my daughter had special needs, we used a lawyer.

In retrospect, maybe we could have gone the DIY route in the first two cases. Hard to say because 1. we didn't go that route and 2. even if we did go that route, the only way to know for sure if a DIY will is good enough is to die and need to execute said DIY will. The reason why we went to a lawyer was because, as someone else on this thread said, we didn't know what we didn't know.

In the third case, our situation is sufficiently complex that we needed a lawyer (and a specialized one at that).

Finally, since you are discussing estate planning, also consider that you might need to draw up a Power of Attorney (which would give your loved ones the ability to handle your affairs should you become incapacitated) and a Advanced Health Directive (which would help direct your medical case should you become incapacitated).

[JBTX]

subject says it all...

i've been reading/searching up older threads here and pretty much as soon as minors are mentioned there are a ton of immediate responses that tell the OP to hire an experienced lawyer instead of going through an online service like legalzoom.

we have two young children of our own, no step-children. we own our one and only home. everything else is investments; 401k, IRA, HSA, 529s, brokerage. that's it. we also have life insurance policies, designed to fund all living costs up until and including college expenses.

in the event of our simultaneous demise, we both have siblings who could take guardianship. our trust would probably dictate something like allowing the guardian to take out X per month until our kids are adults. then lump sum at various ages to our kids until it's all distributed.

i don't see how our situation is "complex". in fact, it sounds very normal and routine. i'm not sure what kind of advice i'm hoping to get from an experienced lawyer for this.

what am i missing? thanks.

Leaving IRAS to heirs has gotten more complex with the recent secure act. Once the child is an adult the amounts must be distributed within 10 years. Depending on the ira amount and the adult child's financial acumen that may or may not be a big issue.

As to leaving assets to minors in general, it is more complicated. I don't think you can do it directly, but I'm not an expert.

[Watty]

what am i missing?

One thing to keep in mind is that if something happens like you and your spouse are killed in a accident that was someone else's fault then there could be a settlement that is in the millions so you might leave a much larger estate than expected.

in the event of our simultaneous demise, we both have siblings who could take guardianship.

You are very lucky if you have siblings that you get along with who would be willing and able to basically adopt your kids and raise them for the next 20 years.

It may seem obvious but be sure to sit down with your siblings and actually talk with them about how willing they would be to do this and do it in a way were they can gracefully decline if they want to.

They may also need to do things like buy a bigger house so you need to consider just how that might work.

[bling]

My personal beliefs include “you get what you pay for” and “you don’t know what you don’t know.”

as someone who has no legal expertise, how am i to judge whether i hired a good attorney or not? how can i trust word of mouth, which are subjective opinions of others who also have no legal expertise?

i'm reading the book Beyond the Grave, so i'm not opposed to learning enough to DIY through some online tools.

The value of all accounts and life insurance are? You want to divest the funds to the minors at what age? Your fine if their buddy convinced them to invest in their hot taco restaurant and bar at age 21, 25 or never? You’re fine if your heirs creditors come after them for your legacy? You’re fine if they decide to be beach bums for the rest of their life?

well under any federal limit for estate taxes but enough to warrant considering a trust (the life insurance policies do pay for ~20 years of expenses + tuition). as for what my kids do with their lives, i'll be dead so it doesn't matter what i think. at some point we all must take responsibility for our actions and i would hope that my kids are raised right in my absense.

[bsteiner]

,,,
i've been reading/searching up older threads here and pretty much as soon as minors are mentioned there are a ton of immediate responses that tell the OP to hire an experienced lawyer instead of going through an online service like legalzoom.

we have two young children of our own, no step-children. we own our one and only home. everything else is investments; 401k, IRA, HSA, 529s, brokerage. that's it. we also have life insurance policies, designed to fund all living costs up until and including college expenses.

in the event of our simultaneous demise, we both have siblings who could take guardianship. our trust would probably dictate something like allowing the guardian to take out X per month until our kids are adults. then lump sum at various ages to our kids until it's all distributed.

i don't see how our situation is "complex". in fact, it sounds very normal and routine. i'm not sure what kind of advice i'm hoping to get from an experienced lawyer for this.

what am i missing? thanks.

A prominent trusts and estates lawyer, now retired, did a Will for himself on LegalZoom (just to test it, not to sign it). He said it was pretty good, though it didn't offer all of the choices he would have wanted.

One important difference is that a lawyer could make recommendations. For example, a lawyer could recommend that, instead of mandating distributions to your children at a specified age or ages, you could provide for your children to gain control over their trusts at a specified age. In that way, your children's inheritances wouldn't be included in their estates for estate tax purposes, and would be protected from their creditors and spouses, and Medicaid.

The other important difference is that a lawyer could help you coordinate the beneficiary designations for your life insurance and retirement benefits with your estate plan.

... My biggest gripe about the software I used: it wasn't super clear on the importance of removing children as beneficiaries at financial institutions, thus letting the assets flow through your estate into the testamentary trusts. ...

That seems to be a growing problem in recent years. We've had several estates where carefully created estate plans were defeated by TOD designations.

[J295]

Retired lawyer here.

I’ve never seen any of the software, but I suspect from a major provider it’s pretty decent. I think the challenge though is not the document itself, but navigating various finer points about asset titling, guardianship, beneficiary designations, trusts, etc.

I’m not comfortable telling someone I haven’t had a dialogue with whether or not they should hire an attorney for something like this. I certainly think I have a bias towards using a lawyer.

Regarding finding a lawyer if you determine to use one, in our particular community of 300k there are a handful I would recommend, so there probably is some truth to wondering how easy it is to find someone. Part of the challenge here is most of the good firms/lawyers take on a project like this to build goodwill, as they are usually low dollar fee items that require a little bit of handholding /meeting time to do a good job for the client. And you certainly want a lawyer who cares more about you as the client than they do about the fee, and those are getting a bit harder to find.

Good luck, and good that you are considering doing something because in the unlikely event both parents are gone while the children are minors you want your children to be taken care of financially and otherwise as best as possible in your absence

[jebmke]

I’ve never seen any of the software, but I suspect from a major provider it’s pretty decent. I think the challenge though is not the document itself, but navigating various finer points about asset titling, guardianship, beneficiary designations, trusts, etc.

I’m not comfortable telling someone I haven’t had a dialogue with whether or not they should hire an attorney for something like this. I certainly think I have a bias towards using a lawyer.

In the first, and most extensive meeting with our estate attorney, “documents” never came up. In fact, he explained at the beginning that we would not be discussing documents until he fully understood what our situation was and what or goals were.

[johnegonpdx]

Having a law firm manage our estate plan has been a great investment.
1. they understand our situation, goals and priorities intimately.
2. they customize our legal plans accordingly.
3. they propose changes to our plans as federal and state law, interpretations of the law, and procedures executing the law change (and they always do).
4. they manage changes to our plans as our situation, goals and priorities change.
5. they provide great insight into estate law in ways that help us improve our financial plans.

[Lee_WSP]

One important difference is that a lawyer could make recommendations. For example, a lawyer could recommend that, instead of mandating distributions to your children at a specified age or ages, you could provide for your children to gain control over their trusts at a specified age. In that way, your children's inheritances wouldn't be included in their estates for estate tax purposes, and would be protected from their creditors and spouses, and Medicaid.

The other important difference is that a lawyer could help you coordinate the beneficiary designations for your life insurance and retirement benefits with your estate plan.

Like any smart lawyer, I'm going to build off of what a more experienced lawyer has already done.

This is the value we add. Guidance. Sure, we probably aren't going to know every possible scenario, but we should be aware of the common pitfalls and consequences of certain decisions.

Also, a lawyer will or should have the apparatus to validly execute the will in his/her office. And they should have checklists of things to do such as removing those TOD designations or working with the client to plan around them.