Estate planning. What to ask the attorney?

[jamesbond007]

I have finally decided to form a trust, so I am talking to an attorney this Friday. I know nothing about trusts and wills, except those wills must go through probate. Now the attorney would explain the differences but what should I keep in mind when talking to the attorney? What questions should I be asking them? What are the potential pitfalls that must avoid? Do attorneys charge every time I want to make a change/add/remove property from the trust? What is the right way of setting up a trust, so DD doesn't swindle away the money (She is only seven now, but who knows what she'd turn out into? Curious)?


This is all new to me. Anything I should do in terms of pre-work?

[Billy B. Good]

You should get a price quote ahead of time for the whole package. I paid $2,500 for a will, trust, health care directive and a couple other things. That was a friendly rate, and rates can vary by locale. If you have businesses and other complicated financial affairs it could cost more. The process of drafting and revising as you go through the process to set up the initial documents should not be a nickel and dime affair. If it is you have the wrong lawyer.

The lawyer should have an intake form that will inventory essentially your whole life, with questions about your family, your assets, goals (take care of kids, special needs, charitable intentions, etc, etc). If you have decided to execute estate documents then you should have some idea of why you want/need it. Who or what are you trying to protect or benefit?

Give the lawyer the information and he/she will set to work and send you drafts. You read carefully, communicate back and forth with corrections/suggestions until the docs are in final form. Then you sign. Later if you want to revise or amend based on changed circumstances, that will be another cost.

[Dave1442397]

We asked around and found a good attorney. His initial consultation was $450, applied to the total cost once we went ahead. He sent us a detailed questionnaire asking for all financial info, and also asking lots of questions about who would inherit what, etc.

It was well worth it. He also took care of retitling a condo that became part of a trust.

[iris lily]

You need to have an idea of where your estate will go when you die, your attorney will not determine that for you. But of course you know that.

What is very useful, at least it was for us, was having our complete statement of assets in front of us. In our final meetings with our estate attorney we went through them to see what was transfer on death applicable and what other avenues we needed to take for each asset.

The automobiles turn out to be more complicated Then I liked. Our attorney took care of re-titling real estate.

It was a pain in the ass for me to go through each asset after the well and trust was done, and get TOD documents to each brokerage account. After just a few years are already want to change my beneficiaries, but I dread the idea of doing that and so I’m in no hurry.

[Dee18]

You can easily change who gets money from your bank accounts, life insurance, and investment accounts by designating the beneficiaries.  Your trust can be a beneficiary of any of these.  If you designate your daughter by name as a beneficiary, she can inherit as young as age 18 (depending on state law).  So you may choose to have your trust be the beneficiary.  My trust was written when my daughter was 2.  I followed the lawyer's recommendation that until she was 30 the trustee had discretion in giving her money. Once she was 30 she would get 1/3 of the remaining trust, 2/3 at 35 and all at 40. I also had specific sums of money to go to some other individuals, and the remainder to charities.

You will need to think about who should be the potential trustees.  My main trustee designation is still good, but I really should change the backup as she moved away and we are no longer close. (Should anything happen to the main trustee I will certainly do so.)  In my case I also wrote in provisions for the trustee (who would also have been the guardian) to be able to use the money for housing, etc, as my first choice had agreed to move to my city if needed. 

My daughter is an adult now but I have been delighted over the years that the advice the attorney had in how to word both my will and trust made them still valid for over 20 years.  I recently introduced her to a fee only financial planner (that is great) who will guide her as needed when she does inherit. 

I thought my attorney was especially helpful in reminding me that one does not know how a child will be with money in his or her 20s, or even older.  This experienced attorney was well aware of beneficiaries in their 20s having substance abuse issues or or being sought after for marriage because of their wealth.  The latter had not occurred to me. 

At the time of getting a will and trust I was in a long term relationship, but not married, and the lawyer advised me to use beneficiary designations for the money I wanted to go to that person, as they could be easily changed in minutes without any lawyer fees for changing a will or trust.  You can do that for any bequests that you think might change in a few years. 

In short, the price at the time ($1800 for trust, will, and healthcare directives) seemed like a lot but it was worth every penny to go to someone highly recommended as a specialist in trust and estate law. 

[jamesbond007]

Thank you for all your insights. A follow up question. Will this have any impact on the way I file my tax returns each year, if I move all my assets and brokerage accounts to a trust?

[scottish]

In Canada, trusts file a separate and different return (a T3 return) than people (a T1 return).     Have you identified a guardian for your daughter?

[jamesbond007]

In Canada, trusts file a separate and different return (a T3 return) than people (a T1 return).     Have you identified a guardian for your daughter?

Yes I did. I plan to include in a guardianship directive. I am not sure what it is called.

[cchrissyy]

Thank you for all your insights. A follow up question. Will this have any impact on the way I file my tax returns each year, if I move all my assets and brokerage accounts to a trust?

I only know california. estate stuff varies a lot with your state or country.

if you mean a revocable or living trust, no, you still own the assets and handle them the way you are used to. it wouldn't be separate record-keeping or taxes.

the lawyer will give you detailed instructions on how to re-title the accounts - or - they will do it for you - or - some accounts they will tell you to make the trust be the designated beneficiary.

[jamesbond007]

I only know california. estate stuff varies a lot with your state or country.

if you mean a revocable or living trust, no, you still own the assets and handle them the way you are used to. it wouldn't be separate record-keeping or taxes.

the lawyer will give you detailed instructions on how to re-title the accounts - or - they will do it for you - or - some accounts they will tell you to make the trust be the designated beneficiary.

Got it. Thank you. I live in California. I am talking with a few attorneys and will decide after talking with them.

[Dee18]

I was surprised to learn that in my state a parent's designation of guardian was not in any way binding.  The court decides.  The attorney pointed this out to me because the guardian I chose for my daughter was a single male from out of state.  The attorney said the court would be likely to appoint my sister (who had no children, wanted no children, and often talked to me about how having a dog was just like having a child, and was also from out of state) rather than a single male.  At the attorney's suggestion I wrote a long letter to a friend about why the person I chose would be the better guardian.  This was to be used as evidence should there be a court battle. My friend burned it when my daughter turned 18. In my southern state this provision was also used to keep a gay or lesbian partner from becoming the guardian (in the years before gay marriage).

[seemsright]

We just set up a trust for our DD. And did the whole estate process.

The lawyer we talked to advised us in the different types of trusts. We wanted DD's trust under lock and key aka prenup proof. So if she married a person and they got divorced or have other issues he cannot go for her money. It is called a Generational skipping trust, it is involved. But basically she has to have a executor and their job is to protect the money. So if she gets a divorce or anything else that says you need to pay X out of your trust...the executor holds the key and they say no and there is nothing the other person can do. She can still get money out of the trust she just has to meet with the executor once a year to tell them how much she wants. She will have to be organized and operate from a annual budget.

It was clear reading our trust that our lawyer must really like writing them because it was 46 pages and he covered everything and anything. And you can read his passion in it. 

Make sure you get guardian, and health care paperwork also.

[jamesbond007]

We just set up a trust for our DD. And did the whole estate process.

The lawyer we talked to advised us in the different types of trusts. We wanted DD's trust under lock and key aka prenup proof. So if she married a person and they got divorced or have other issues he cannot go for her money. It is called a Generational skipping trust, it is involved. But basically she has to have a executor and their job is to protect the money. So if she gets a divorce or anything else that says you need to pay X out of your trust...the executor holds the key and they say no and there is nothing the other person can do. She can still get money out of the trust she just has to meet with the executor once a year to tell them how much she wants. She will have to be organized and operate from a annual budget.

It was clear reading our trust that our lawyer must really like writing them because it was 46 pages and he covered everything and anything. And you can read his passion in it. 

Make sure you get guardian, and health care paperwork also.

This is great advice. Thank you.

[scottish]

We just set up a trust for our DD. And did the whole estate process.

The lawyer we talked to advised us in the different types of trusts. We wanted DD's trust under lock and key aka prenup proof. So if she married a person and they got divorced or have other issues he cannot go for her money. It is called a Generational skipping trust, it is involved. But basically she has to have a executor and their job is to protect the money. So if she gets a divorce or anything else that says you need to pay X out of your trust...the executor holds the key and they say no and there is nothing the other person can do. She can still get money out of the trust she just has to meet with the executor once a year to tell them how much she wants. She will have to be organized and operate from a annual budget.

It was clear reading our trust that our lawyer must really like writing them because it was 46 pages and he covered everything and anything. And you can read his passion in it. 

Make sure you get guardian, and health care paperwork also.

Is the executor the same as a trustee?    Who did you choose?    And how much did they charge?

[Duke03]

Who do you buy life insurance with?  I ask because Metlife has a program that I used a couple years ago that will pay for your will and estate planning.  Basically if you buy life insurance through your employer with Metlife you just call them up and say you want a will and estate planning done.  They will then give you a list of several lawyers in your area that work with the insurance company.  We went and the attorney didn't charge us a penny. Saved us a couple thousand dollars!!!

[seemsright]

We just set up a trust for our DD. And did the whole estate process.

The lawyer we talked to advised us in the different types of trusts. We wanted DD's trust under lock and key aka prenup proof. So if she married a person and they got divorced or have other issues he cannot go for her money. It is called a Generational skipping trust, it is involved. But basically she has to have a executor and their job is to protect the money. So if she gets a divorce or anything else that says you need to pay X out of your trust...the executor holds the key and they say no and there is nothing the other person can do. She can still get money out of the trust she just has to meet with the executor once a year to tell them how much she wants. She will have to be organized and operate from a annual budget.

It was clear reading our trust that our lawyer must really like writing them because it was 46 pages and he covered everything and anything. And you can read his passion in it. 

Make sure you get guardian, and health care paperwork also.

Is the executor the same as a trustee?    Who did you choose?    And how much did they charge?

While we are alive My husband is the executor. DD's children are the trustee. If we die her guardian will be executor and DD's children are the trustee. Once DD takes ownership of the trust she can decide who the executor is. This will have to either be a Lawyer, a CPA or a fiduciary. But a requirement of the trust is to have a executor.   We are skipping her in order to protect the money. There are also a tax benefit to this type of trust. But the prenup part was important to us. It also states in there that she will have to have a generational skipping trust for her kids...so that line goes on. She will have access...she just will need to meet with the the executor once a year and tell them how much she wants out of the trust. She just has to be be organized and operate from a annual budget. We put a ton of thought into this trust and our lawyer really did a good job in laying it all out. It was involved. It cost us right around 3K to have it done. It took months. And a few meetings to make it happen.

Hubby and I have worked damn hard to get to our level and we refuse to not protect it. This type of trust may not be the right answer for everyone. Please do your own research and get guidance from a lawyer. This is just what WE DID!