Author Topic: Estate Planning  (Read 2045 times)

Sugaree

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Estate Planning
« on: February 21, 2019, 09:29:53 AM »
I know this is kind of morbid, but what steps have you taken in regards to estate planning?

If something happens to me, I'd like to name my minor son as beneficiary of both my life insurance policy as well as any TSP/IRA funds, with whoever ends up with custody of him being a trustee.  This would likely be my husband, but could be my parents or my best friend if something happened to him as well.  I'd also like to set it up so that part of the money goes to an educational and/or age-based trust for him and the rest be doled out, say, monthly to whoever has him, possibly with a small lump sum at the beginning to help set things up.  I've watched said best friend blow through thousands of dollars of life insurance money on grief spending in the last year and a half and I'm afraid her kids aren't going to have anything left.  TBH, my husband and my parents aren't the best with money either and I'd like to limit the damage they could do if given unfettered access to a large sum of money.  I also want to avoid taxes and outrageous fees if at all possible while having the option to change things later, i.e. when my son becomes an adult. 

ReadySetMillionaire

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Re: Estate Planning
« Reply #1 on: February 21, 2019, 11:08:22 AM »
This is one of those areas where doing anything other than going to a lawyer is cheap and generally stupid. Go hire a lawyer.

AMandM

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Re: Estate Planning
« Reply #2 on: February 21, 2019, 11:16:09 AM »
Custody of your son and authority over your money are two separate issues. Don't confuse them.

Assuming your husband is your son's legal father, there's nothing to be done about custody if you die before your husband. You only need to name a guardian for your son in the event that your husband predeceases you.

You need to find someone who you trust will handle money reliably. Name that person as the trustee/executor. Also name a backup in case the first person predeceases you.

I can't speak to whether a trust is actually a good idea, especially if you plan to dissolve it in a few years when your son becomes an adult. (Why do you think the trust won't be needed then? Won't your son be subject to the same dangers as your husband/friend/parents?)

In any case, you will need an estate lawyer to set this up. The more control you want over how the money will get spent, the more conditions you need to put on it in advance, and the more an experienced expert is necessary--which probably also means the more it will cost.

In my case, I trust my husband and my adult kids to handle money well, so I have left everything to him. If he dies before me, everything is divided equally among the kids and the two oldest are guardians of any remaining minors. Very simple, my will cost only $400 to draw up.

Kay-Ell

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Re: Estate Planning
« Reply #3 on: February 21, 2019, 06:46:35 PM »
I’ve been thinking a lot about this subject too. I recently adopted my daughter and two of my
closest friends lost significant family members recently so it’s been on my mind. My suggestion: get a lawyer to set it up and get beneficiary designations to all of your main accounts. I’d also suggest keeping an account with a small amount of money available immediately upon your death. There are a couple of ways to structure this but your lawyer would be able to advise you there. A lot of times it’s the immediate aftermath coupled with loss of income and inability to access funds that are so difficult. In your estate planning you’ll also want to consider your SS death benefit. Good luck.

nemesis

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Re: Estate Planning
« Reply #4 on: February 27, 2019, 01:11:05 AM »
This was a pretty bad ass thread about this topic, with lots of practical and easy ways to handle your estate planning:

https://forum.mrmoneymustache.com/welcome-to-the-forum/mustachian-estate-planning/

I used tips from that thread to manage my estate... and feel pretty darn at ease now.

Sugaree

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Re: Estate Planning
« Reply #5 on: February 27, 2019, 04:21:41 AM »
This was a pretty bad ass thread about this topic, with lots of practical and easy ways to handle your estate planning:

https://forum.mrmoneymustache.com/welcome-to-the-forum/mustachian-estate-planning/

I used tips from that thread to manage my estate... and feel pretty darn at ease now.


Awesome.  Thanks!

Leisured

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Re: Estate Planning
« Reply #6 on: February 28, 2019, 06:33:51 AM »
I am 73 and have been through this with my parents.

Consult a legal estate specialist. It is worth it, because they can see pitfalls where you cannot.

Put the bank account which receives income as a joint account, so that if one partner dies, the other partner can use the account. Otherwise the account goes into probate. Important.

Same for the house. Put the house in joint names, so that the surviving partner can live in the house.

Good thread.