Estate planning

[jp1]

A couple of weeks ago facebook served up a thing for a free estate planning seminar at the nearby community center. This is one of those things SO and I have discussed, but not got around to so I signed up figuring it would at least help get the process started. I also figured it would be a family lawyer hoping to get business, which of course it was. The session was yesterday evening. He was actually a good instructor and very engaging. (of course, I go to a lot of commercial insurance seminars so you can take it with a grain of salt whether I'm a good judge of what makes for an engaging instructor...)

Anyway, I was surprised that the first 25-30 minutes had to do with medical directives and preparing a temporary financial power of attorney that will take over in the event that you temporarily are incapable of making decisions. The examples he gave of why these things matter were compelling (Terry Schivo anyone?) and they weren't something that was even on my radar so for that alone the session was worth the cost of admission.

The rest of the session discussed why and how to stay out of probate as much as possible. None of it was a surprise to me, but it was good to get certain details, like that the fact that SO and I have the title to our home in a joint tenancy with right of survivorship is enough to keep it out of probate. He also did a good job of explaining the benefits of trusts over just naming beneficiaries to everything (as we have done except for basic bank accounts, which is now on our to do list). THe main benefits being that you can 1) just name the trust as beneficiary anytime you open a new account for something and 2) that you can have multiple trust successors all lined up instead of having to make changes every time a life change happens necessitating a change. The other benefits were irrelevant to us because we don't have minor children or incapacitated adults we care for that need lifelong assistance, etc.

At the end he offered everyone a free 2 hour Zoom consultation, the only requirements/commitment being "do the homework" which is creating a detailed financial asset inventory, which we mostly already have, and 2) show up for the appointment. After that we can either hire him or not. I'm inclined to go through with the consult, since it's free. Whether we'll hire him after that I'm not sure. I need to ask around to friends to see if his pricing seems reasonable. The one friend I've asked so far set up his trust ten years ago and only paid like $2,000. This guy's base price is twice that. But maybe that's the going rate these days.

[iris lilies]

We did not do our will, trust, and end of life documents until the year I retired. Fortunately, we didn’t need it any earlier.


The cost at the time was $3000 and we worked with an attorney who does exclusively wills, trusts, and end of life documents. That was 2015.

we did put all 10? Or 12? (Can’t remember) of our beneficiaries on the financial accounts that would accept beneficiaries, but that was a pain in the butt. One of those financial accounts one of the Social Security numbers of the beneficiaries and I refused. They don’t need to know they’re in my will.

in a few years, I want to redo our will and cut down on beneficiaries or at least cut down on their portion. We divided our state in equal portion among our siblings, two friends, and a few charitable organizations. All of our siblings are doing fine financially so I’d prefer at this point not to leave them any money.

[pinkytoe]

We learned in dealing with MIL's estate recently that the only things to be probated were a few old accounts where benefactors were not named most likely out of neglect. DH inherited some IRAs though and since his mother was already taking RMDs, we are on the hook for doing so annually and must deplete the funds within 10 years. Those will be added to our taxable income, so ouch. Luckily, her house was sold prior to her death so that simplified things. We have only one daughter so for us, it is simple. I have thought about adding her to the deed on our house but should get counsel first on that. We do need to make final arrangement plans and that is a tough one for me as I don't have a clue where or how I want to be disposed of since I am uncertain where "home" is these days.

[jp1]

Currently SO and I have named each other as beneficiaries on everything. Once one of us dies the survivor will need to figure out a new plan. If I die first SO may want to leave at least some money to his siblings. My sibling has more money than me so I don’t need to do the same. I have a few charities that I would like to support but haven’t thought seriously about that.

[jp1]

The new 10 year RMD thing is something the guy discussed last night. Not an issue that affects SO and I but definitely a potential big deal for some people.

[iris lilies]

We learned in dealing with MIL's estate recently that the only things to be probated were a few old accounts where benefactors were not named most likely out of neglect. DH inherited some IRAs though and since his mother was already taking RMDs, we are on the hook for doing so annually and must deplete the funds within 10 years. Those will be added to our taxable income, so ouch. Luckily, her house was sold prior to her death so that simplified things. We have only one daughter so for us, it is simple. I have thought about adding her to the deed on our house but should get counsel first on that. We do need to make final arrangement plans and that is a tough one for me as I don't have a clue where or how I want to be disposed of since I am uncertain where "home" is these days.

About adding your daughter to the deed: yes, get legal counsel. That is not something I would do. Her husband then has legal interest in your house.

Some states have a mechanism that allows real estate to transfer to a person upon death of owner.

[pinkytoe]

Her husband then has legal interest in your house.

Funny you should mention that. As much as we like him, SIL spends money like water so I wonder about how he would spend any inheritance.

[iris lilies]

Funny you should mention that. As much as we like him, SIL spends money like water so I wonder about how he would spend any inheritance.

My mother put the names of my brother and myself on her investment and banks accounts, and it all worked out just fine, but…it might not have. You can trust your kids but their spouses are not your kids.

[frugal-one]

I don’t understand your need for a trust. If you have POD and TOD (paid on death or transfer on death) on accounts, your home set up as joint tenants, the same for vehicles (or if your state does not allow… an affidavit to that effect… why do you need a trust? These vehicles will avoid probate, as would any insurance policies.

[pinkytoe]

I may be my usual cynical self, but I think trusts are sometimes oversold, ie not necessary.