Author Topic: DIY Estate Planning  (Read 2714 times)

englishteacheralex

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DIY Estate Planning
« on: September 16, 2018, 10:48:06 AM »
I've heard of LegalZoom before through the Dave Ramsey podcast. I checked out the website, too. Then called a couple of attorneys who do estate planning in my area. I had a conversation with a receptionist who told me that unless my estate was complicated I didn't need a will because the law would just do the same thing for my assets.

I asked her for a quote and she said ~$1500. Geez, $1500?

We put off writing a will.

That was two years ago. We have two toddlers and a net worth of ~$330k. I have a nagging suspicion that this is something we ought to take care of...like dental work or replacing a roof, you can put it off for a while but if you wait too long you have an expensive, would-have-been-preventable mess on your hands.

What's the Mustachian, cost-effective but still actually useful way to do estate planning? We have $1500 to spend on this if that's the best way to go.

I'll attach an article I just read about DIY estate planning online in case anybody's interested: https://www.nytimes.com/2018/09/07/your-money/online-wills.html?action=click&module=Editors%20Picks&pgtype=Homepage

Thanks so much in advance for advice and opinions, particularly from any Mustachian attorneys or accountants.

pbkmaine

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Re: DIY Estate Planning
« Reply #1 on: September 16, 2018, 11:49:03 AM »
I've heard of LegalZoom before through the Dave Ramsey podcast. I checked out the website, too. Then called a couple of attorneys who do estate planning in my area. I had a conversation with a receptionist who told me that unless my estate was complicated I didn't need a will because the law would just do the same thing for my assets.

I asked her for a quote and she said ~$1500. Geez, $1500?

We put off writing a will.

That was two years ago. We have two toddlers and a net worth of ~$330k. I have a nagging suspicion that this is something we ought to take care of...like dental work or replacing a roof, you can put it off for a while but if you wait too long you have an expensive, would-have-been-preventable mess on your hands.

What's the Mustachian, cost-effective but still actually useful way to do estate planning? We have $1500 to spend on this if that's the best way to go.

I'll attach an article I just read about DIY estate planning online in case anybody's interested: https://www.nytimes.com/2018/09/07/your-money/online-wills.html?action=click&module=Editors%20Picks&pgtype=Homepage

Thanks so much in advance for advice and opinions, particularly from any Mustachian attorneys or accountants.

I am a (retired) financial planner, and I use an attorney. Please get thee and thy husband to one ASAP. There are a million things that can go wrong with a self-prepared will. You do not want this. A T&E attorney will ask you the right questions to prepare a will that is right for you. Before you go, talk with DH and come up with guardians for your children. You can split the financial and custodial pieces. Do not delay this unless you want me to tell you a series of nightmare stories. Call first thing tomorrow.

Hula Hoop

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Re: DIY Estate Planning
« Reply #2 on: September 16, 2018, 11:58:58 AM »
I have a follow up question.  My 80 something dad really needs to do a power of attorney and, possibly, a living will (he already has a regular will).  He keeps putting it off as he does not want to deal with or pay for a lawyer.  Can he do it himself with legalzoom or the like?

pbkmaine

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Re: DIY Estate Planning
« Reply #3 on: September 16, 2018, 01:19:51 PM »
I have a follow up question.  My 80 something dad really needs to do a power of attorney and, possibly, a living will (he already has a regular will).  He keeps putting it off as he does not want to deal with or pay for a lawyer.  Can he do it himself with legalzoom or the like?

All I can tell you is that, as a financial planner and as a former president of a state financial planning society, I personally know of dozens, if not hundreds, of cases where the lack of a trusts and estates attorney in document preparation led to tragic outcomes.

iris lily

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Re: DIY Estate Planning
« Reply #4 on: September 16, 2018, 01:59:44 PM »
$1500 is cheap. My god,  you have tiny children. Get a will, trust, or will and trust set up pronto.

It is true that we old fogeys dis not do that for 28 years of our marriage but we never had children to take  care of and both of us can earn any income we need.

 Now we have a trust, (attorney cost $3,000) and  it has been a pain in my ass to get all financial instruments titled  or moved properly, but you probably are not as stupid as we are, we have too damned many financial accounts. 3 or more bank accounts for instance with multiple banks. Stupid. This process caused us to consolidate some monies.
« Last Edit: September 16, 2018, 02:03:37 PM by iris lily »

GizmoTX

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Re: DIY Estate Planning
« Reply #5 on: September 16, 2018, 02:31:17 PM »
You need a professional will & other documents yesterday because of your children — otherwise your state will decide who gets them & any assets. Do not DIY.

Your wills each need to provide for 3 scenarios: 1 parent dies, both parents die, all 4 of you die. They’re not the same outcome. Name at least 3 guardians for your children in series, in case your first choice is unable. Your will should set up a testamentory trust for your children, since minors cannot inherit. Name at least 3 trustees in series; these do not need to be the same as your guardian list.

You each also need a durable power of attorney for health decisions & another for financial matters if you are temporarily or permanently unable yourself — specify at least 3 persons in series in case your first choice is unable or unwilling. These do not need to be the same people. DO NOT just name each other.

To reduce the cost, have these decisions thought out before you meet with a will attorney. Also document the contact information for all your guardians, trustees, those you are granting your powers of attorney, & any close relatives in advance.

Sibley

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Re: DIY Estate Planning
« Reply #6 on: September 16, 2018, 05:19:50 PM »
You can, and should, google for checklists of things you need to think through. One of the hardest ones that my family did (parents and me so far) is the "medical what ifs". My sister found it somewhere online, and it's just if x, what do you want done? It was also eye opening - my parents are complete opposites of each other, and I'm very different from both of them as well. The advantage is that if something does happen to you and your POA is making decisions, there is something written for them to use.

I took it one step further and wrote a series of general guides - what to do with my money, my property, my cats. It boiled down to my general philosophy of life. All of it, along with my will and related documents, got sent to my sister (the unlucky winner of who gets to be The Person).

Also, organize stuff. If you have a million accounts all over, either consolidate or make sure you've got a list. Someone's going to need to get into your online accounts, so having user names and passwords would be helpful. Have a safety deposit box? Whoever gets to clean up when you're gone would appreciate a) knowing you have one, b) where it is, and c) where the key is.

Basically, if you were to drop dead tomorrow, the goal is that whoever has to pick up the pieces has the information available to do so in a relatively easy way. This is in addition to all the legal documents of course. They go hand in hand.

englishteacheralex

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Re: DIY Estate Planning
« Reply #7 on: September 16, 2018, 08:17:49 PM »
Well...ok...now I feel convicted. I'll get on this.

There's just a nagging suspicion that it's overkill to provide all this documentation, since all of my friends have little kids, too, and none of them have paid for estate planning. And what's the deal with Dave Ramsey promoting the hell out of LegalZoom if a $140 program isn't going to cut the mustard for us, a straightforward family with two kids, a condo, a joint checking account, a Roth IRA, a 529, a 403(b) and a 401(k)?

I would actually LOVE to hear horror stories that will convince me that this expenditure is necessary. Horror stories are what convinced us to get term life insurance, another boring expense.

NorCal

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Re: DIY Estate Planning
« Reply #8 on: September 16, 2018, 08:25:41 PM »
For me personally, I'd say the LegalZoom or basic wills are just fine pre kids.  We actually used Quicken Willmaker pre kids and felt very comfortable with it.

Post kids, get a will and trust set up.  And use a professional. 

If you work for a megacorp, see if they have a prepaid legal plan available.  The cost of enrolling in these plans is typically less than $1,500.  I used that for my will and trust. 

pbkmaine

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DIY Estate Planning
« Reply #9 on: September 17, 2018, 04:05:13 AM »
Well...ok...now I feel convicted. I'll get on this.

There's just a nagging suspicion that it's overkill to provide all this documentation, since all of my friends have little kids, too, and none of them have paid for estate planning. And what's the deal with Dave Ramsey promoting the hell out of LegalZoom if a $140 program isn't going to cut the mustard for us, a straightforward family with two kids, a condo, a joint checking account, a Roth IRA, a 529, a 403(b) and a 401(k)?

I would actually LOVE to hear horror stories that will convince me that this expenditure is necessary. Horror stories are what convinced us to get term life insurance, another boring expense.


One of my work colleagues was the executor for her ex husband, who used Legal Zoom. The probate process took TWO EXTRA YEARS and countless trips to court, because the documents were put together in a way that made the court suspicious they’d been tampered with. In the meantime, her children, who were college age and really could have used the funds, had no access to his money.

At least his will was eventually proved valid. Had it not been, his assets would have been distributed according to state law by a process of administration, which is long and expensive. 

Stories like this are passed around the campfire at financial planning retreats.

Or let me tell you my own story, omitting some of the details because it’s a semi-famous one. My parents owned a piece of property worth a considerable amount of money. Instead of a trusts and estates attorney, they used a lawyer who was a family friend. He had NO IDEA what he was doing. My mother died five years after my father. Her estate was in litigation with the IRS for FIFTEEN YEARS. There was nothing left after the IRS and legal fees. The reason I became a financial planner is for the express purpose of yelling at people to do proper estate planning.

When DH and I had our own wills done, in spite of the fact that I had taken courses in estate planning, I used the attorney who taught those courses rather than going it alone. Once the wills were meticulously prepared, he put us in a conference room with paralegals and went over the documents with us with the paralegals as witnesses. He even videotaped part of the session. I sleep better at night because I know I have done everything possible to secure my assets for my heirs.

Financial planners use trusts and estates attorneys because we have seen the wreckage created by their absence.
« Last Edit: September 17, 2018, 04:27:51 AM by pbkmaine »

Johnny Aloha

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Re: DIY Estate Planning
« Reply #10 on: September 17, 2018, 05:37:54 AM »
... since all of my friends have little kids, too, and none of them have paid for estate planning.

You could extend that logic to so many other aspects ... my friends have kids and don't save for retirement, why should I?

And what's the deal with Dave Ramsey promoting the hell out of LegalZoom if a $140 program isn't going to cut the mustard for us, a straightforward family with two kids, a condo, a joint checking account, a Roth IRA, a 529, a 403(b) and a 401(k)?

In theory I agree with you.  But the idea that Mustacians can DIY anything and everything is silly.  I agree $1500 is cheap, and is a rounding error for you since you said your net worth is $330k. 

A very successful friend and trusted advisor once told me: if you think good legal advice is expensive, wait to see how much bad legal advice will cost you!!

Kl285528

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Re: DIY Estate Planning
« Reply #11 on: September 17, 2018, 08:21:11 AM »
Check around your local credit unions. They offered a service where they referred you to an attorney with a very reputable firm, she met with my wife and me, and created wills, power's of attorney, etc. type documents at a reduced rate. We went through State Employees Credit Union of North Carolina, if that helps. But I bet others have similar.
The other thought is get a referral from the local bar association (legal bar).

onlykelsey

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Re: DIY Estate Planning
« Reply #12 on: September 17, 2018, 08:25:41 AM »
I have a follow up question.  My 80 something dad really needs to do a power of attorney and, possibly, a living will (he already has a regular will).  He keeps putting it off as he does not want to deal with or pay for a lawyer.  Can he do it himself with legalzoom or the like?

All I can tell you is that, as a financial planner and as a former president of a state financial planning society, I personally know of dozens, if not hundreds, of cases where the lack of a trusts and estates attorney in document preparation led to tragic outcomes.

Agreed.  Also make sure you're reading state-specific advice if you do go the DIY route.   In NYS, for example, a will ABSOLUTELY needs to be witnessed by two people.  You could spend 100K setting things up and the will would be useless if you missed a signature.  There are probably other quirks in other states' laws.

1500 is unbelievably cheap, actually.  If that lawyer's reviews are good, go for it!  Like others said, check out if your employers have a prepaid legal plan or a relationship with anyone.

lhamo

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Re: DIY Estate Planning
« Reply #13 on: September 17, 2018, 08:59:33 AM »
Also, if at all possible use witnesses you know personally and keep track of their contact information -- good idea to update every year or two and keep that info with a copy of the will.  My mom used two random people at the bank where she got her will notarized, who were impossible to track down 20 years later.  She also neglected to sign/notarize an important addendum to the will.  Those two missing pieces meant adding several weeks to the probate process, and several hours of lawyer time.  Not a huge deal, but could have been avoided by being more proactive.

Also, DO NOT keep the original copy of your will in a safe deposit box.  At least here in WA, once a person dies the box is supposed to be sealed until the appointment of the executor is approved, and then the executor can access the SDB to do an inventory, etc.  And the will typically appoints the executor.  Again, missing out on this one step can cause considerable delay and some extra lawyer time to sort it all out.

BTW, is there a rough and dirty guideline for when a trust is a good idea, rather than a simple will?  Is it more related to size of estate, or complexity?  Or is it totally dependent on your state laws? 

onlykelsey

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Re: DIY Estate Planning
« Reply #14 on: September 17, 2018, 09:01:25 AM »
Also, if at all possible use witnesses you know personally and keep track of their contact information -- good idea to update every year or two and keep that info with a copy of the will.  My mom used two random people at the bank where she got her will notarized, who were impossible to track down 20 years later.  She also neglected to sign/notarize an important addendum to the will.  Those two missing pieces meant adding several weeks to the probate process, and several hours of lawyer time.  Not a huge deal, but could have been avoided by being more proactive.
+1 Macabre, but maybe use younger cousins or something to witness.

pbkmaine

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Re: DIY Estate Planning
« Reply #15 on: September 17, 2018, 09:21:31 AM »
Also, if at all possible use witnesses you know personally and keep track of their contact information -- good idea to update every year or two and keep that info with a copy of the will.  My mom used two random people at the bank where she got her will notarized, who were impossible to track down 20 years later.  She also neglected to sign/notarize an important addendum to the will.  Those two missing pieces meant adding several weeks to the probate process, and several hours of lawyer time.  Not a huge deal, but could have been avoided by being more proactive.

Also, DO NOT keep the original copy of your will in a safe deposit box.  At least here in WA, once a person dies the box is supposed to be sealed until the appointment of the executor is approved, and then the executor can access the SDB to do an inventory, etc.  And the will typically appoints the executor.  Again, missing out on this one step can cause considerable delay and some extra lawyer time to sort it all out.

BTW, is there a rough and dirty guideline for when a trust is a good idea, rather than a simple will?  Is it more related to size of estate, or complexity?  Or is it totally dependent on your state laws?

In general, trusts are indicated for those with minor or special needs children, those with complex estates like property held in several states or countries, and those who live in states where probate tends to be long, difficult or complex. Florida is such a state, but DH and I do not have any trusts because almost all of our assets are in retirement accounts (and pass by beneficiary designation) or jointly held.

While we are on this subject, get up from what you are doing RIGHT NOW and check all your beneficiary designations. For assets like insurance and retirement accounts, the beneficiary form controls who the money goes to, NOT the will. An astonishing amount of money goes to old beneficiaries, like a first spouse or parents or siblings, because people don’t think to change them when they marry or have children.

calimom

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Re: DIY Estate Planning
« Reply #16 on: September 17, 2018, 07:58:38 PM »
There are times that DIY is a perfectly acceptable solution to many areas of our lives and there are often instances when it's prudent to outsource to professionals. A few examples of my own life:

Medicine: Sure, I can administer basic Red Cross first aid to anyone around me. I can supply Tylenol or bandage a non-deep cut. But any of my kids needing stitches or setting a broken arm (like the time my then 8-year-old son fell from his treehouse, off to the ER we have gone.

Education: I can teach my children what I know, and look up some things I don't know. And very happy they have gone to wonderful public schools and taught by professionals. I love schools.

Law: Basic contracts I can read. I've dealt with some conflict resolution in my home and business life without calling in outside forces. Things like wills, trusts, estates I have cheerfully worked with lawyers who have spent many years honing their craft and knowing the law.

Echoing what @pbkmaine said above about checking status of designated beneficiaries. When my husband died, it was discovered that a small, long-ago 401K listed his brother as beneficiary. Legally, it was his money to keep. But he passed it along to me.

$1500 is a small price to pay for peace of mind. I paid more than that over 10 years ago to set up my own will and trust for my family, and thought it was money well spent.

I own a small business and am glad that people outsource the particular product and service I offer. While I'm no doctor or lawyer, I'm able to work with clients and optimize their budgets. Like an auto mechanic, I will often clean up messes that hopeful DIYers have botched, costing them more money and headaches in the end. I have the resources and know-how they don't. Best of luck ETA, and get this done, post haste!

ThatGuy

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Re: DIY Estate Planning
« Reply #17 on: September 17, 2018, 09:10:02 PM »
Dave Ramsey promotes the hell out of Legal Zoom because Legal Zoom pays him to promote the hell out of it.  His concern isn't what's best for you, his concern is what's best for his bottom line, period.  Same thing goes for the mutual funds he promotes, they are ridiculous!

PepperPeter

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Re: DIY Estate Planning
« Reply #18 on: September 20, 2018, 01:25:55 PM »
I'm a T&E paralegal.  Please, pay someone licensed in your state to do your estate plan.

- There can be differences in naming guardians of the person vs guardians of the property for your minor children that vary state by state and can be completely missing from online will programs.

- They may not take into account your state specific homestead requirements.  In FL for example, if you own your homestead in your own name and you have minor kids, the property automatically vests in your minor kids at your death and your spouse gets a life estate.  It's not like that in IL.  I have no idea what the rule is in Hawaii.  Neither does Legal Zoom.

- Each state has specific witness and notary requirements.  Some require self-proving affidavits, and some don't.  Some it's not required, but if there isn't one, you have to track down each witness to go to court at your death and provide an oath to the court that they witnessed your document.  It the witness can't be found, sometimes the Judge won't admit your will to probate. 

I could go on.  Pay someone.  Please.

Beyond your estate planning, a good T&E attorney will tell you how to title your assets to complement your estate plan.  Sometimes beneficiary designations trump the will, sometimes they don't.  Etc. Etc.  Legal Zoom and the like do not take these state specific nuances into account and generate forms based on common law principles, which sometimes works, and sometimes does not.

PepperPeter

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Re: DIY Estate Planning
« Reply #19 on: September 20, 2018, 01:34:14 PM »
Also, if at all possible use witnesses you know personally and keep track of their contact information -- good idea to update every year or two and keep that info with a copy of the will.  My mom used two random people at the bank where she got her will notarized, who were impossible to track down 20 years later.  She also neglected to sign/notarize an important addendum to the will.  Those two missing pieces meant adding several weeks to the probate process, and several hours of lawyer time.  Not a huge deal, but could have been avoided by being more proactive.

Also, DO NOT keep the original copy of your will in a safe deposit box.  At least here in WA, once a person dies the box is supposed to be sealed until the appointment of the executor is approved, and then the executor can access the SDB to do an inventory, etc.  And the will typically appoints the executor.  Again, missing out on this one step can cause considerable delay and some extra lawyer time to sort it all out.

BTW, is there a rough and dirty guideline for when a trust is a good idea, rather than a simple will?  Is it more related to size of estate, or complexity?  Or is it totally dependent on your state laws?

Agreed, it's not a good idea to keep your original will in a safe deposit box.  Most of the time someone will have to get a court order to enter the box.

There's not a hard and fast rule on when you need a trust vs a will and has to do with your specific circumstances.  Tax planning, dynasty descendants trusts, planning for children with special needs, care of elderly parent after your death - probably need a trust.  A few bank accounts, some tangible personal property to your kids - probably a will.  A T&E attorney will tell you what you need.

Papa bear

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Re: DIY Estate Planning
« Reply #20 on: September 20, 2018, 02:26:30 PM »
Ok. So what really are some of the pitfalls here we're talking about? If you have a pretty easy family, say spouse, kids, grandparents, etc, and you don't have special requirements for your stuff/money/crap, how is this so problematic?

I die? Next of kin is wife.  She gets my stuff. We both die?  My kids get our stuff, split 50/50. That's basically standard. I get that it can go to probate and can take awhile to figure out, but really, what is the major risk here? 


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GizmoTX

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Re: DIY Estate Planning
« Reply #21 on: September 20, 2018, 02:39:23 PM »
I die? Next of kin is wife.  She gets my stuff. We both die?  My kids get our stuff, split 50/50. That's basically standard. I get that it can go to probate and can take awhile to figure out, but really, what is the major risk here? 

For starters, you haven't named a guardian for your kids that YOU want, & your kids can't inherit your stuff, so your estate will be charged a hefty fee to place those funds out of their reach & your wife's until they're adults, and you won't have named someone you trust. And if you all die, are you happy with your state's plan for your estate?

tyrannostache

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Re: DIY Estate Planning
« Reply #22 on: September 20, 2018, 02:43:31 PM »
Recently, my spouse recently cancelled our appointment with an attorney and bought a Quicken product instead.

We have 2 small kids and assets worth less than $350k. What can go wrong if we make our will with this product instead of an attorney? Can you explain it like I'm someone who is not familiar with the probate process? Because, well, I'm not.

pbkmaine

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Re: DIY Estate Planning
« Reply #23 on: September 20, 2018, 02:55:11 PM »
Recently, my spouse recently cancelled our appointment with an attorney and bought a Quicken product instead.

We have 2 small kids and assets worth less than $350k. What can go wrong if we make our will with this product instead of an attorney? Can you explain it like I'm someone who is not familiar with the probate process? Because, well, I'm not.

Please read PepperPeter’s post above.

onlykelsey

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Re: DIY Estate Planning
« Reply #24 on: September 20, 2018, 02:56:16 PM »
You should read this post to get an idea.  But we can't know unless we know what state you're in and we are lawyers licensed to practice in that state who know all the ins and outs.  Go with the lawyer.

The biggest thing about those programs is that they don't understand differences between state laws. 

GizmoTX

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Re: DIY Estate Planning
« Reply #25 on: September 20, 2018, 03:01:40 PM »
Recently, my spouse recently cancelled our appointment with an attorney and bought a Quicken product instead.
We have 2 small kids and assets worth less than $350k. What can go wrong if we make our will with this product instead of an attorney? Can you explain it like I'm someone who is not familiar with the probate process? Because, well, I'm not.

Because your wills can be invalidated if you don't follow the laws of your state. Or, you leave out something important. You can't fix this after you are dead.

Use the Quicken product to answer all the questions & make your decisions on guardians, trustees, executors, & beneficiaries. (Yes, plural -- you never want to name just one of each, in case your first named isn't able to serve. If each of you is naming the other, what if you both die together? But even if just one of you dies, the other shouldn't have to then change their will & POAs immediately. Naming a series eliminates that risk.)

Then contact a will & trust lawyer to review what you've come up with & to provide the proper language for your state. By cutting down on the time needed, you should be able to negotiate a much lower fee than if the lawyer has to feed you all the questions & wait on you for decisions. S/he may also raise issues that a canned package has omitted.

tyrannostache

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Re: DIY Estate Planning
« Reply #26 on: September 20, 2018, 03:05:50 PM »
Recently, my spouse recently cancelled our appointment with an attorney and bought a Quicken product instead.

We have 2 small kids and assets worth less than $350k. What can go wrong if we make our will with this product instead of an attorney? Can you explain it like I'm someone who is not familiar with the probate process? Because, well, I'm not.

Please read PepperPeter’s post above.

I'm not trying to be flippant, or dense (really!). I did read PepperPeter's post. I've read all the posts in the threads so far. But it's not clear to me what the consequences of those discrepancies or problems might be. What does it mean that the property vests in the kids and the spouse gets a life estate, for example?

I'm genuinely trying to convince him we need to go to the attorney, and he's equally convinced that our net worth is small enough that we don't need to. (Ah, penny-wise and pound-foolish. This is an ongoing debate in our household...)

Edit after x-post: Thanks @GizmoTX, that's a good suggestion.

PepperPeter

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Re: DIY Estate Planning
« Reply #27 on: September 21, 2018, 07:11:57 AM »
@tyrannostache   I totally get what you're saying - estate planning is a very complicated area and not many people understand the pitfalls of doing it wrong.

For the record, I am not an attorney, cannot give you legal advice, and the below should be considered a friendly guide to how things go wrong. 

Using my above examples --

Let's say you live in FL.  You bought a condo and own it in your own name.  Then you get married, husband/wife moves in, and you have some minor kids.  You do your will through Quicken and say yes, I want to leave my homestead property to my husband if I die.  Quicken says great!  Let's pop that into the form.  What Quicken may not know (most of the time doesn't know) is that in FL if you own your homestead property that your minor kids live in with you, no matter what your will says, you CANNOT leave the property to anyone but your minor kids.  So the property by operation of law automatically is titled in your minor kids' names at your death (which if over $15,000 then requires a separate legal proceeding to open a guardianship of the property, because obviously your minor kids can't hold property in their tiny minor names), and then your husband/wife gets a "life estate" - the right to live in the property during his/her lifetime without an ownership interest.  Sounds ridiculous?  It is.  An attorney would have said, hey you need to transfer the property into your joint names if you want the property to pass to your spouse at your death.  Pay a few hundred extra to prepare a warranty deed and record it, and then none of what I described here is your problem.  Quicken just fills in the form with what you tell it.

Some states require you to name both a guardian of the person (physical custody) and a guardian of the property (the money) for minor kids.  Quicken says who do you want to be the guardian?  You fill in Uncle Bill.  Sounds cool until you are both sadly killed in a car accident and Uncle Bill takes your will to court to get appointed as guardian.  The court then doesn't know if you intended him to be guardian of the person AND the property, or one or the other.  So then there are extra hearings for his fitness, trying to determine what your intentions may have been, and worst case scenario, your kids are sitting in foster care because you have an asshole Judge who won't place them with a family member in the interim.  I'm not trying to scare you, but that happens.  It happens more than you think.

I could write novels on witness and notarization requirements gone wrong.  Just know that every single online will I've seen has gotten it wrong and has required extra steps in court to be proved up, and several have been thrown out altogether.

TLDR:  You don't know what you don't know.  An attorney who specializes in estate plans knows all this stuff.  It's not so much about your net worth as you think - it's about the laws of your state that you don't know, and Quicken is trying to churn out a program for the least amount of money.  Every single state is different.  Trust me that they aren't hiring the best legal minds for all 50 states to create these programs.

StarBright

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Re: DIY Estate Planning
« Reply #28 on: September 21, 2018, 07:32:14 AM »
I have a follow up question.  My 80 something dad really needs to do a power of attorney and, possibly, a living will (he already has a regular will).  He keeps putting it off as he does not want to deal with or pay for a lawyer.  Can he do it himself with legalzoom or the like?

All I can tell you is that, as a financial planner and as a former president of a state financial planning society, I personally know of dozens, if not hundreds, of cases where the lack of a trusts and estates attorney in document preparation led to tragic outcomes.

Agreed.  Also make sure you're reading state-specific advice if you do go the DIY route.   In NYS, for example, a will ABSOLUTELY needs to be witnessed by two people.  You could spend 100K setting things up and the will would be useless if you missed a signature.  There are probably other quirks in other states' laws.

1500 is unbelievably cheap, actually.  If that lawyer's reviews are good, go for it!  Like others said, check out if your employers have a prepaid legal plan or a relationship with anyone.

This brings me to a question! How does living in different states affect wills? We've lived in three different states since our young children have been born and are likely to move at least one, but maybe two more times before they reach adulthood. Does a will made in one state hold in all states? One of the reasons we've held off on both estate planning and 529 plans is that our final location is not settled yet. (Also we have no idea who we would want to take care of our children in the event of our deaths - so we keep kicking the can)
« Last Edit: September 21, 2018, 08:19:45 AM by StarBright »

PepperPeter

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Re: DIY Estate Planning
« Reply #29 on: September 21, 2018, 08:12:27 AM »
@StarBright  No.  Once you establish residency in a new state, you need to update your documents.  Sometimes the provisions will be valid in the new state, but it's always better to have an attorney review it and make sure it's valid in your new state.

katsiki

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Re: DIY Estate Planning
« Reply #30 on: September 21, 2018, 09:31:37 AM »
Great advice here.  As a Louisiana resident, I can attest to the state laws vary bit.  I listen to a financial show locally where they take calls.  It is amazing how many crazy things transpire with property in LA and a neighboring state.  The laws are different, of course, but many do not realize this.

tyrannostache

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Re: DIY Estate Planning
« Reply #31 on: September 21, 2018, 09:39:10 AM »
Thanks, @PeppePeter, that's really helpful.

COEE

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Re: DIY Estate Planning
« Reply #32 on: September 21, 2018, 07:02:40 PM »
Because some will procrastinate and elections for the year are coming up. We used hyatt legal plans through my employer. For $40 a month or so we got a good selection of real estate planners in our area. We called three of them and asked some general questions and then chose to work with one of them.

Now I sleep well at night for about $500 total.  No cash out of pocket just our plan deductible.

We liked the service so much that we keep the legal plan.  Cheap insurance.

Sibley

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Re: DIY Estate Planning
« Reply #33 on: September 21, 2018, 09:07:19 PM »
Wanna know WHY you don't DIY your estate planning? There's a thread that will explain it, exactly.

https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/inheritance-drama-you-got-any-stories-wanted/

It's up to 29 pages. There's PLENTY of reasons why you don't cheap out on estate planning.

Also, see the news articles about Prince's estate, probably the mess that will be Aretha Franklin's estate, and I'm sure plenty of others have hit the news I'm not thinking of. Not doing this stuff right will not matter to you. You will be dead. It will matter to your family. If you want to kick them when they're already down, then go ahead and don't do a will, or DIY it and screw it up.

englishteacheralex

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Re: DIY Estate Planning
« Reply #34 on: October 09, 2018, 04:42:32 PM »
Holy Shit Estate Planning is Expensive!

I just got back from a free estate planning seminar.

So that was a very nicely done sales pitch for a full service estate planning firm. They want $4500 to do a revocable living trust for a married couple.

Holy shit! $4500?? I will never be able to talk Mr. ETA into this. However, the sales pitch was extremely effective in that I am now scared shitless of not having a will/trust. Mr. ETA wasn't there! She had a slideshow! Many flowcharts were made and potential outcomes were gone over and let me tell you, they did not all involve the unlikely event of both Mr. ETA and I dying in a car accident on the way back from our rare dates!

$4500 seems cheap compared to what happens in probate...

I texted Mr. ETA that it seemed like the Cadillac of estate planning and he texted back that we need the 2003 Toyota Matrix of estate planning. "That's what the attorney THOUGHT you'd say! But she even had a slide about why cheap estate planning sucks so now I don't know..."

WTF attorneys? Why do I have to pay more than my car is worth to die responsibly? IS there a 2003 Toyota Matrix equivalent of estate planning?

lhamo

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Re: DIY Estate Planning
« Reply #35 on: October 09, 2018, 05:01:38 PM »
Paging @pbkmaine ....

pbkmaine

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Re: DIY Estate Planning
« Reply #36 on: October 09, 2018, 06:08:00 PM »
Never ever ever ever hire an attorney based on a “free” seminar. Ask friends with small kids who they used and how much they cost. This will give you a good idea of what the going rate is. Meet with the attorney who has come most highly recommended. They should have a free initial one-on-one. ONLY use that attorney if you get good vibes. Otherwise, move on to the next on the list.

englishteacheralex

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Re: DIY Estate Planning
« Reply #37 on: October 09, 2018, 06:25:12 PM »
All my friends think I'm crazy for wanting to spend money on this! I don't have a single friend who has done anything about estate planning or guardianships for their kids. Seriously. Even my old lady friend here in Hawaii just had her attorney sister in FL do it. Not helpful!

I'm just working my way down google results. The seminar I just got back from was given by the firm started by the mother of one of my students, so I thought it would be a great idea, but I just called and got a quote for about $1500 less from the next firm on Google, so...WTF?

pbkmaine

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Re: DIY Estate Planning
« Reply #38 on: October 09, 2018, 06:33:08 PM »
All my friends think I'm crazy for wanting to spend money on this! I don't have a single friend who has done anything about estate planning or guardianships for their kids. Seriously. Even my old lady friend here in Hawaii just had her attorney sister in FL do it. Not helpful!

I'm just working my way down google results. The seminar I just got back from was given by the firm started by the mother of one of my students, so I thought it would be a great idea, but I just called and got a quote for about $1500 less from the next firm on Google, so...WTF?

Okay. Contact your local bar association and ask for a list of Trusts and Estates attorneys. Research that list.

lhamo

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Re: DIY Estate Planning
« Reply #39 on: October 09, 2018, 06:41:37 PM »
If you know anyone who has adopted, especially internationally, I believe establishing a will and setting up guardianship is a required part of the process.  At least that was when my brother and SIL got their stuff done.  Might be another angle to pursue to get referrals.

COEE

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Re: DIY Estate Planning
« Reply #40 on: October 10, 2018, 05:50:15 AM »
All my friends think I'm crazy for wanting to spend money on this! I don't have a single friend who has done anything about estate planning or guardianships for their kids.

You're friends are the ones that are crazy - not you.  It's so incredibly important to have a plan in place for your child(ren).  God forbid they end up in the state of Hawaii's hands!  You want a plan in place.

I will again suggest a legal plan through your work if it's available.  Very affordable, and the legal plan has already done a lot of the search for you.

How great would it be for you to find a great attorney to do your estate planning?  Then perhaps you mention your good fortune to your friends in passing, and they also clue in that they need a plan as well.  That's friendship - good for you for doing the dirty work!

GreenEggs

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Re: DIY Estate Planning
« Reply #41 on: October 10, 2018, 07:03:27 AM »
For cost comparison my father paid $1200 for a complex trust, will, financial & health POAs, and another $3-400 a few years later for an ammendment for a $12M estate.  This was with one of the best estate planning attorneys in NC.  He works solo, in a small town outside Charlotte.

I don't know why, but his rates seem lower than average for our area.  Maybe because his expenses are lower.  His hourly is about $75-125 lower than other attorneys have charged us.

We found him by chance, but I'd recommend asking your local professionals (accountants, bankers, attorneys, business owners, etc.) who they would recommend.  Checking the names of present & past professors at law schools in your state might be helpful.   



mbl

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Re: DIY Estate Planning
« Reply #42 on: October 10, 2018, 08:38:19 AM »
Well...ok...now I feel convicted. I'll get on this.

There's just a nagging suspicion that it's overkill to provide all this documentation, since all of my friends have little kids, too, and none of them have paid for estate planning. And what's the deal with Dave Ramsey promoting the hell out of LegalZoom if a $140 program isn't going to cut the mustard for us, a straightforward family with two kids, a condo, a joint checking account, a Roth IRA, a 529, a 403(b) and a 401(k)?

I would actually LOVE to hear horror stories that will convince me that this expenditure is necessary. Horror stories are what convinced us to get term life insurance, another boring expense.

The joint checking account, is one of you dies is self explanatory.
The Roth IRA,  529, 403(b) and 401(k) probably already have beneficiaries designated so they would pass outside of any will. As was suggested above,  check that each of these accounts has a beneficiary designation.
Also, bank accounts in certain states can have a Pay on Death/Transfer on Death designation(see Totten Trust).

Your condo, unless it were held in a trust would probably require passing through a will unless you title it to a trust.

The most glaring issue is the guardianship of your minor children and a fiscal plan for their support.
« Last Edit: October 10, 2018, 08:44:52 AM by mbl »

radram

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Re: DIY Estate Planning
« Reply #43 on: October 10, 2018, 09:42:10 AM »
I was reminded of the saying "when you are holding a hammer, everything looks like a nail". In my state (WI), I went to see my fathers accountant for his business. Just seems to be real level headed, easy to understand, and very no-nonsense. To begin, do not treat your estate as a whole. First consider each item separately.

Do you have a retirement account. Make sure your beneficiary info is accurate. In my state, a retirement account with a valid beneficiary form avoids all other death items like probate, a will, a trust, etc. Non of that matters, and the funds will be divided to the beneficiaries upon death. If that is 1/3 of your net worth, you are 1/3 done with your estate plan.

Have a home? In WI, I can file a transfer-on-death deed to transfer ownership upon death. There are rules to do it correctly.

Same with my bank accounts and vehicles. Like a beneficiary designation of a retirement account, these items would never enter probate, a trust, a will, etc.

So now my retirement accounts, bank accounts, automobiles, and all land are handled. Do I need a trust for the rest? How about a will? It is certainly a different conversation when talking about $25,000 worth of crap vs. a multi-million dollar estate. When making your decisions, make sure you have an accurate picture of what you are dealing with.

Minor children add a whole other mix and varies by state.

GettingClose

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Re: DIY Estate Planning
« Reply #44 on: October 10, 2018, 11:59:38 AM »
Unless you want your children to inherit $180,000 (or much more if you have term life insurance) each on the day they turn 18, you'll probably want to set up some kind of springing trust to administer the funds until they turn ... 30? 35? This is not really DIY territory.

Attorneys have also helped us think through various scenarios such as properly handing an inheritance for the disabled daughter of a niece (money should go to her mother, otherwise it will interfere with the disabled daughter's state benefits, potentially even forcing her to leave a good long-term care arrangement), thinking through a specific inheritance for a wonderful son-in-law (only if he and our daughter are married, but what if she has predeceased us?), and bequests to our siblings (what if they have predeceased us, but have children)?   And many more.

As other posters have mentioned, state-specific laws are the real difficulty.  For example, in our state, if liquid assets are more than something like $70k, the estate goes through probate, even if there is a will.  Therefore it's important to have a trust and place everything aside from a day-to-day checking account and retirement accounts in the trust.

Cranky

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Re: DIY Estate Planning
« Reply #45 on: October 10, 2018, 02:57:09 PM »
All my friends think I'm crazy for wanting to spend money on this! I don't have a single friend who has done anything about estate planning or guardianships for their kids. Seriously. Even my old lady friend here in Hawaii just had her attorney sister in FL do it. Not helpful!

I'm just working my way down google results. The seminar I just got back from was given by the firm started by the mother of one of my students, so I thought it would be a great idea, but I just called and got a quote for about $1500 less from the next firm on Google, so...WTF?

So, do you know anyone from church who does estate planning/wills? Because we had wills made last year, and all that POA stuff, by a lawyer we know from church, and he clearly charged us the Friend Rate. (I was a bit embarrassed at how little the bill was.)

englishteacheralex

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Re: DIY Estate Planning
« Reply #46 on: October 10, 2018, 08:12:18 PM »
All my friends think I'm crazy for wanting to spend money on this! I don't have a single friend who has done anything about estate planning or guardianships for their kids. Seriously. Even my old lady friend here in Hawaii just had her attorney sister in FL do it. Not helpful!

I'm just working my way down google results. The seminar I just got back from was given by the firm started by the mother of one of my students, so I thought it would be a great idea, but I just called and got a quote for about $1500 less from the next firm on Google, so...WTF?

So, do you know anyone from church who does estate planning/wills? Because we had wills made last year, and all that POA stuff, by a lawyer we know from church, and he clearly charged us the Friend Rate. (I was a bit embarrassed at how little the bill was.)

I don't think so? But maybe? I'm going to write an email to all my late middle-aged responsible friends at work to ask them for recommendations. Shouldn't be too weird. They think my kids are cute.

Ideally I think my budget for this is like $2k. It looks to me like a will done on the cheap is kind of pointless, but neither do we need this full service revocable living trust where the attorney is basically on call for you (the sales pitch was extremely customer-service oriented, which I kind of liked, but don't really want to pay for).

calimom

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Re: DIY Estate Planning
« Reply #47 on: October 11, 2018, 10:09:00 PM »
Are you on NextDoor.com? If you ask around, you'll come up with some good referrals for attorneys in your price range. The only alternatives are not DIY, $1500, or $4500 (with a slide show) Seriously, just do this. It's easy to be distracted by other shiny things demanding our attention (I know this well) but your children's future care without you - as unimaginable as this may be - is important.

Just do this. Adult! Hopefully it's the best waste of money you'll never need.

AMandM

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Re: DIY Estate Planning
« Reply #48 on: October 12, 2018, 06:23:13 AM »
The quotes I got for making a will bundled the will, healthcare POA, and living will together. But in my state, it is very easy to do the healthcare POA and living will yourself; the state provides forms and clear instructions. So I asked for the price to do only the actual will, and it was a lot cheaper, less than half the total cost. I guess the healthcare stuff requires the lawyer to lead the client through a lot of difficult, time-consuming decisions and conversations.

CowboyAndIndian

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Re: DIY Estate Planning
« Reply #49 on: October 12, 2018, 12:25:18 PM »
- They may not take into account your state specific homestead requirements.  In FL for example, if you own your homestead in your own name and you have minor kids, the property automatically vests in your minor kids at your death and your spouse gets a life estate.  It's not like that in IL.  I have no idea what the rule is in Hawaii.  Neither does Legal Zoom.

- Each state has specific witness and notary requirements.  Some require self-proving affidavits, and some don't.  Some it's not required, but if there isn't one, you have to track down each witness to go to court at your death and provide an oath to the court that they witnessed your document.  It the witness can't be found, sometimes the Judge won't admit your will to probate. 


What to do if you are planning to move to a different state in a couple of years? I plan to move from NJ to FL maybe next year.

How do you make sure that the will is valid in both states? I do not want to pay a second time to make sure I meet requirements in another state.