A simple will (vs. trust) for a simple guy?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Chaconne
Posts: 148
Joined: Sat Dec 15, 2007 4:18 pm

A simple will (vs. trust) for a simple guy?

Post by Chaconne » Thu Dec 06, 2018 12:49 pm

I know there are many threads on this topic, but it seems the question depends so much on individual circumstances that I can't get a good fix on my own situation. From what I know now, I'm pretty sure I would not need a trust, but thought I'd run it by all of you, if you care to comment. Here's my sitch:

Family:
• Unmarried, no children
• One brother and one sister listed as sole heirs in my existing will, per stirpes 50/50
• Leaving bequests would be a bonus rather than a goal

Financial Assets (about $850,000 total):
• Checking account: Transfer on death to above heirs
• SEP IRA: Vanguard Star and Vanguard Total Bond, above heirs listed as beneficiaries
• Taxable accounts: Vanguard Star and Vanguard Prime MMM, above heirs listed as beneficiaries
• Life insurance: None
• Pension: None

Debts:
• None other than monthly credit cards, typically less than $500/month

Personal possessions:
• No home
• One car, value about $6,000
• Personal items, furniture, household items and collections worth maybe $50,000
• I anticipate all would be divided amicably among my heirs

Miscellaneous:
• Florida resident
• Documents on hand: last will, durable POA, healthcare surrogate, living will

If you have any thoughts, I'd appreciate hearing them. THANKS!
-Bob

c1over8
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Re: A simple will (vs. trust) for a simple guy?

Post by c1over8 » Thu Dec 06, 2018 1:49 pm

Chaconne wrote:
Thu Dec 06, 2018 12:49 pm
• One brother and one sister listed as sole heirs in my existing will, per stirpes 50/50
Do you mean that you are leaving your assets to your brother and sister 50/50 and if your brother or sister predecease you, the deceased sibling's share will go to such deceased sibling's descendants, per stirpes?

If so, double check that your beneficiary designations actually accomplish that or whether they in fact provide that if one of your siblings predeceases you, the other sibling gets 100%.

senex
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Re: A simple will (vs. trust) for a simple guy?

Post by senex » Thu Dec 06, 2018 2:09 pm

I see no need for a trust. I've seen several estates of similar scope to yours, and they transferred as expected, just fine, with no courts, no probate, no need for a trust, etc.

afan
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Re: A simple will (vs. trust) for a simple guy?

Post by afan » Thu Dec 06, 2018 2:56 pm

It does not seem that a trust would accomplish anything for disposing of your assets at your death.

A living trust can make things much easier for someone to take over and manage your affairs if you become incapacitated while still alive. In theory, a DPOA permts someone to do this. In practice many institutions will refuse to honor a perfectly valid DPOA. With a trust, as long as your trustee can prove their identity, things can go smoothly.

You don't mention age or health. For a young person in good health it could be reasonable to put off creating a revocable trust until the risk of incapacity is greater. For an older person or someone in poor health it would be worth investigating now.

With your simple disposition terms the trust should be simple as well.
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bsteiner
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Re: A simple will (vs. trust) for a simple guy?

Post by bsteiner » Thu Dec 06, 2018 3:02 pm

Probating a Will is Florida is generally not difficult, expensive or burdensome, so that shouldn't be a concern.

If your siblings are concerned about estate taxes in their estates, or protection against their creditors and spouses (both current and future) and Medicaid, then you should provide for them (in your Will) in trust rather than outright. If none of these things is a concern, then you could provide for them outright.

If any of these things is a concern for their children, or if their children aren't yet of sufficient age and maturity to inherit outright, then you should provide for them (in your Will) in trust rather than outright.

You'll have to coordinate your beneficiary designations for your retirement benefits with your Will if you're providing for your siblings, or their children, in trust.

cadreamer2015
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Re: A simple will (vs. trust) for a simple guy?

Post by cadreamer2015 » Thu Dec 06, 2018 3:14 pm

If all your financial assets transfer to others upon your death, your executor will seem to have no financial assets in your estate from which to pay legitimate financial debts or other expenses (funeral, cremation etc?). This won’t be a problem for you but might be an inconvenience or a problem for your executor.
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Chaconne
Posts: 148
Joined: Sat Dec 15, 2007 4:18 pm

Re: A simple will (vs. trust) for a simple guy?

Post by Chaconne » Thu Dec 06, 2018 6:23 pm

Thanks very much to everyone for your thoughtful replies. A few notes in response:

• I should have noted that I am in my late sixties, in good health. My siblings and their heirs (children) are all grown adults.

• c1over8: Good point. According to my current will, "If my brother or sister should predecease me leaving issue who survive me then their share shall pass to such issue per stirpes by right of representation."

• cadreamer2015: Good points about compensation for executors and final expenses. Currently my siblings are co-executors and I was thinking their inheritance would serve as compensation (provided I don't hang on too long!). But I will make sure these considerations are provided for.

I'll be meeting with an attorney soon to review my current documents and get any recommendations he or she may have. I'll be sure to raise some of the points all of you have brought up.

THANKS again!
-Bob

delamer
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Re: A simple will (vs. trust) for a simple guy?

Post by delamer » Thu Dec 06, 2018 6:30 pm

bsteiner wrote:
Thu Dec 06, 2018 3:02 pm
Probating a Will is Florida is generally not difficult, expensive or burdensome, so that shouldn't be a concern.

If your siblings are concerned about estate taxes in their estates, or protection against their creditors and spouses (both current and future) and Medicaid, then you should provide for them (in your Will) in trust rather than outright. If none of these things is a concern, then you could provide for them outright.

If any of these things is a concern for their children, or if their children aren't yet of sufficient age and maturity to inherit outright, then you should provide for them (in your Will) in trust rather than outright.

You'll have to coordinate your beneficiary designations for your retirement benefits with your Will if you're providing for your siblings, or their children, in trust.
While bsteiner certainly doesn’t need my support to make his point, I did want to emphasize the above to the OP.

A trust (or trusts) that is created by the terms of your will once die could be beneficial to your siblings/nieces/nephews. A trust could protect their inheritance, for the reasons noted above. The provisions of the trust would determine the degree of protection.

So it isn’t particularly relevant that you are a simple guy with a pretty basic estate. What is relevant is the level of protection you want to provide for your heirs.

Chaconne
Posts: 148
Joined: Sat Dec 15, 2007 4:18 pm

Re: A simple will (vs. trust) for a simple guy?

Post by Chaconne » Thu Dec 06, 2018 8:53 pm

delamer wrote:
Thu Dec 06, 2018 6:30 pm
While bsteiner certainly doesn’t need my support to make his point, I did want to emphasize the above to the OP.

A trust (or trusts) that is created by the terms of your will once die could be beneficial to your siblings/nieces/nephews. A trust could protect their inheritance, for the reasons noted above. The provisions of the trust would determine the degree of protection.

So it isn’t particularly relevant that you are a simple guy with a pretty basic estate. What is relevant is the level of protection you want to provide for your heirs.
Thank you for calling attention to this, delamer. I must confess, I didn't understand bsteiner's post very well, and I'm not sure I do now. But I will be sure to raise the issue when I review my situation with an attorney.
-Bob

6Pack
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Location: Rural Maryland

Re: A simple will (vs. trust) for a simple guy?

Post by 6Pack » Thu Dec 06, 2018 8:57 pm

I’m an estate planning lawyer, but this isn’t legal advice .

Most of the time, trusts are sold to clients to benefit the attorney’s pockets and not necessarily provide a tangible benefit to the client.

All assets with beneficiary designations are handled outside of probate (much like a trust). Examine your circumstances and look at what has beneficiary designations. Then look at everything else. That “everything else” is what would pass through your will or trust. Keep in mind that some states allow you to put a beneficiary designation on a vehicle title, so that’s one more non-probate asset.

Of course, I’ll recommend you talk to a lawyer for your particular circumstances, but ask yourself what benefit a trust would provide over a will. Also, if a lawyer was steering you toward a trust, ask what specifically will be advantageous about a trust over a will. I’d love to hear the response.

I’m not against trusts in every circumstance, I draft them for clients when appropriate, but they are often pushed to increase legal fees.

ETadvisor
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Re: A simple will (vs. trust) for a simple guy?

Post by ETadvisor » Thu Dec 06, 2018 9:26 pm

I assume you are asking about a Will or a Revocable Living Trust (RLT) as opposed to an Irrevocable Trust. The key difference is the RLT has a clause to deal with you affairs and finances if you become incapacitated. Since you have no spouse or children, this can be an issue for you. The hard part is selecting the individual Trustee to take on the task or you can select a corporate Trustee which is costly. You would also need to place your financial assets in the trust now or direct them to pass to the Trust at death via pour-over Will. As registered now, the financial assets will not pass via Will/Trust or be collected by the Executor/Trustee because they pass by beneficiary designation to your siblings. The only assets that would pass by Will is your Tangible Personal Property. The Will can create sub-trusts for your beneficiaries to protect them from splurging on their inheritance.

delamer
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Joined: Tue Feb 08, 2011 6:13 pm

Re: A simple will (vs. trust) for a simple guy?

Post by delamer » Fri Dec 07, 2018 2:43 pm

Chaconne wrote:
Thu Dec 06, 2018 8:53 pm
delamer wrote:
Thu Dec 06, 2018 6:30 pm
While bsteiner certainly doesn’t need my support to make his point, I did want to emphasize the above to the OP.

A trust (or trusts) that is created by the terms of your will once die could be beneficial to your siblings/nieces/nephews. A trust could protect their inheritance, for the reasons noted above. The provisions of the trust would determine the degree of protection.

So it isn’t particularly relevant that you are a simple guy with a pretty basic estate. What is relevant is the level of protection you want to provide for your heirs.
Thank you for calling attention to this, delamer. I must confess, I didn't understand bsteiner's post very well, and I'm not sure I do now. But I will be sure to raise the issue when I review my situation with an attorney.
-Bob
You are welcome.

What can be confusing is that there are two separate issues regarding trusts in my understanding (I speak as a non-attorney).

The first issue is whether you put your assets into some type of trust while you are still alive. My impression is that while sometimes this is appropriate (depending on the state you live in, for instance), most often it is not.

The second issue is whether your will creates trusts to hold their inheritance for your heirs when you die. These types of trusts can be beneficial to your heirs (not you) because they protect their inherited assets in the event of a spendthrift spouse, a divorce, a lawsuit, etc. (this is what bsteiner was discussing).

Good luck.

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