Author Topic: Talk to me about wills  (Read 1672 times)

Megma

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Talk to me about wills
« on: January 17, 2019, 02:03:30 PM »
2019 is the year my husband and I put on our big kid panties and get a will.

Please talk to me about DIY wills (cost, ease and how good they are) vs. using an attorney.

About us:
We're in our 30s with no kids and none planned (childless by choice). We own 2, soon to be 3 houses and have retirement accounts (no straight investment accounts as we prefer real estate). My parents are divorced and I don't want to leave it up in the air and a mess to sort out, especially for my in-laws since my parents don't get along well. Making decisions about selling real estate and at what price could be messy.

Can we say something like "all our crap is to be divided among these people; all real estate and cars is to be sold. This guy (probably my FIL) gets to make all sales decisions."

Check2400

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Re: Talk to me about wills
« Reply #1 on: January 17, 2019, 03:06:19 PM »
Can we say something like "all our crap is to be divided among these people; all real estate and cars is to be sold. This guy (probably my FIL) gets to make all sales decisions."

You can, but it probably won't be sufficient to be 'self proving,' i.e. a simple probate vs. a probate where the court has to approve all transactions (at the expense of an attorney submitting those transactions).  Wills vary from state to state.  I think a will is like a taxes, the value you get from hiring a professional is in asking the questions you didn't know you needed to answer, and the benefit will come in the future.  It is at least equally expensive to probate an incorrectly drafted will, or even a half wrong will, as it is to get a properly planned one.  The difference is that one you are paying for and addressing when healthy and aware of the choices, and the other you're doing while dealing with the loss of your spouse. 

A good attorney will address things you may not know--are your properties in an LLC?  Because then you 'will' your business interest and not the property.  Is your primary home owned as tenants in common or a right of survivorship?  Are your accounts and retirement assets an estate asset or are they able to elect payable on death beneficiaries? 

More importantly, an estate package does more than a will.  Do you have a Medical Directive (see, e.g., Terri Schiavo)?  Guardian of your person if you get dementia?  Where and how will you be buried/cremated?  Medical Power of Attorney?  These are things that you get the benefits of directly. 

If you and your spouse both pass simultaneously then guess what, y'alls estate could go to all four of your parents equally.  Who is next in line to probate your estates if you pass simultaneously? 

A will is the one legal document that is made to not be able to have you clarify your intentions if there is a dispute.  I think there is no better use of $1000-1500 to ensure that you don't leave a mess behind when you die. 

MustacheAnxiety

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Re: Talk to me about wills
« Reply #2 on: January 17, 2019, 03:09:38 PM »
If you are trying to save your family the headache, you probably eventually want a trust so they can avoid probate.  A trust and all the associated documents (Powers of attorney, pour over will, documentation to move your assets into the trust) is probably something you want to do with an attorney and shouldn't cost too much (couple thousand).

But if you want something to fill in the gap while you are in your 30s unlikely to die and likely to have your will/trust plans change go ahead and get an online will for some peace of mind.  It should be effective as long as it complies with your state laws. You should be able to prepare it online with legal zoom or  whatever online service you prefer and go to your local bank to get it witnessed/notarized.  Keep copies electronic and hard copy for yourself, but I wouldn't hand any out so you don't need to collect copies when you update your will/trust. Let whoever you pick as your executor/trustee know that you picked them and where you keep the copy of your will/trust.  If your parents could make life a pain for your in laws make sure to include a clause that says anyone who contests the will/trust gets 0.

AMandM

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Re: Talk to me about wills
« Reply #3 on: January 17, 2019, 03:23:13 PM »
This is what I have read about DIY wills that convinced me to hire a pro:  the DIY software may not include clauses relevant to your situation, but unless you're a lawyer you wouldn't necessarily know. Plus, unlike, say, tax software, you don't have anything to check it against and if it's wrong, you'll never find out; it will just make a mess for your family after you die. We decided that a few hundred dollars was worth being (more or less) certain that settling our estate would go smoothly.

As to the will itself: First off, maybe you were just speaking casually, but you and your husband don't make a will together, so there's no "all our crap." Each of you says who gets his/her crap, and you name someone as executor--the person who carries out the instructions. Your executor and your husband's could be different.  You could specify that the real estate has to be sold before the estate is distributed, or you could give the executor the power to get the real estate appraised and allow heirs to buy each other's shares You also have to say what happens if someone named as an heir is already dead when you die: does that share go to his/her descendants, or get divided among the other heirs, or to someone else? Same with executor--you can name a backup if the person you named is unwilling or unable to do it.

FWIW, our wills basically say, "Everything goes to my spouse, unless s/he dies before me, in which case it's divided equally among all our kids," but with all the definitions, contingency plans, etc., they each run to 12 pages. My mother's will was the same idea, but in her jurisdiction it was about twice as long. I'm happy to pay for someone who knows why those 12 pages are needed, but more aren't.


robartsd

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Re: Talk to me about wills
« Reply #4 on: January 17, 2019, 04:38:20 PM »
Most likely DIY would be OK, but you'll never know. DIY is better than nothing at all. A revocable trust is great for keeping things out of the courts and potentially saving on legal fees (in my jurisdiction probate is at least two filings (open/close) at over $400 each).

I'd go the DIY route. The worst that could happen is that you didn't do it right, someone contests, and a bunch of people who shouldn't need your assets waste some of them fighting over them. If you had children or others who you actually plan on depending on you, then a professional's help might be warranted.

Generally, I'd recommend setting up a revocable trust with both of you as trustees and transfer as much as you can into the trust (real estate and vehicle titles for sure, make it the beneficiary of any financial accounts). Name FIL as successor trustee. Indicate how you want assets in the trust distributed. Write a pour over will to transfer anything you missed into your trust upon your death. Know for certain that you have executed your documents properly (notary/witnesses).

Not directly related to property, but probably more important for your family is planning your final arrangements (so they don't have to while grieving). Also prepare an advance medical directive if there is any circumstance that you don't want medical response to make maximum effort at saving your life. Springing power of attorney in case you are alive but incapacitated is also useful if there is anyone you trust to handle the situation correctly.

Megma

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Re: Talk to me about wills
« Reply #5 on: January 18, 2019, 07:50:29 AM »
Thank you all for your really thoughtful responses. It is very interesting to hear from you all about trusts and secondary heirs; I have very little experience in this area having never inherited anything and never done a will.

This will is really just in case myself and DH should die at the same time (in a car crash for example). Since we're still really young, we might go the DIY route to guard somewhat against that possibility for the next 10ish years. Many of our valuable commodities are currently set to pass to other upon an individual death - our houses are deed such that they go to the other spouse if one dies and retirement accounts he is my primary beneficiary and I am his (our individual parents are secondary).

Can anyone point to a DIY will service they have used with good results?

trollwithamustache

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Re: Talk to me about wills
« Reply #6 on: January 18, 2019, 08:50:23 AM »
in our state Nolo Press has some great DIY products.

since you don't have kids, yeah DIY is totally worth it.

robartsd

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Re: Talk to me about wills
« Reply #7 on: January 18, 2019, 09:17:22 AM »
in our state Nolo Press has some great DIY products.

since you don't have kids, yeah DIY is totally worth it.
Nolo Press also tends to have good books to guide you through understanding the law. Check for them at your library.

ReadySetMillionaire

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Re: Talk to me about wills
« Reply #8 on: January 18, 2019, 09:30:04 AM »
Attorney here.  Not your lawyer, this is not legal advice, blah blah disclaimer blah blah. These threads exhaust me. The legal advice is almost always way off, and the people claiming their DIY will is "great" aren't dead yet and have no idea what they're talking about.

If you are trying to save your family the headache, you probably eventually want a trust so they can avoid probate.  A trust and all the associated documents (Powers of attorney, pour over will, documentation to move your assets into the trust) is probably something you want to do with an attorney and shouldn't cost too much (couple thousand).

You do not need a trust to avoid probate.  You need a well-crafted will and other contractual documents in place to have your biggest assets to avoid probate. A lawyer will guide you through this, and there can be a lot of complications with transferring assets, so you want to run things by them.

But if you want something to fill in the gap while you are in your 30s unlikely to die and likely to have your will/trust plans change go ahead and get an online will for some peace of mind.  It should be effective as long as it complies with your state laws. You should be able to prepare it online with legal zoom or  whatever online service you prefer and go to your local bank to get it witnessed/notarized.  Keep copies electronic and hard copy for yourself, but I wouldn't hand any out so you don't need to collect copies when you update your will/trust. Let whoever you pick as your executor/trustee know that you picked them and where you keep the copy of your will/trust.  If your parents could make life a pain for your in laws make sure to include a clause that says anyone who contests the will/trust gets 0.

I could not disagree with this more emphatically.  I have yet to have a client bring in a DIY will that didn't have major flaws with what the client intended.

The worst that could happen is that you didn't do it right, someone contests, and a bunch of people who shouldn't need your assets waste some of them fighting over them. If you had children or others who you actually plan on depending on you, then a professional's help might be warranted.

Spoken from someone who has no idea how expensive a will contest is, or how bad/expensive things can get when the will is invalid, or how expensive estate administration fees can be if things need to go through probate (when a well-crafted will would have avoided that), or how expensive taxes can be if things weren't properly set up, etc.

Generally, I'd recommend setting up a revocable trust with both of you as trustees and transfer as much as you can into the trust (real estate and vehicle titles for sure, make it the beneficiary of any financial accounts). Name FIL as successor trustee. Indicate how you want assets in the trust distributed. Write a pour over will to transfer anything you missed into your trust upon your death. Know for certain that you have executed your documents properly (notary/witnesses).

Out of all the bad posts already in this short thread, this one takes the cake. I'm absolutely gobsmacked at someone giving blanket legal advice like this.  Like, I can't be the only lawyer reading this and freaking out about it. 

This is so, so, so bad to post when you're (a) not a lawyer and (b) know absolutely nothing about the facts. Just blanketly telling someone to put stuff in a recovable trust.  I just can't even respond to this without my fingers burning off my hands.

This is what I have read about DIY wills that convinced me to hire a pro:  the DIY software may not include clauses relevant to your situation, but unless you're a lawyer you wouldn't necessarily know. Plus, unlike, say, tax software, you don't have anything to check it against and if it's wrong, you'll never find out; it will just make a mess for your family after you die. We decided that a few hundred dollars was worth being (more or less) certain that settling our estate would go smoothly.

This is emphatically true.  The relevant software is awful at putting in contingencies because the software isn't even aware that those contingencies exist.

since you don't have kids, yeah DIY is totally worth it.

A good lawyer will be able to craft your will to take care of future kids so you don't have to re-do your cheap DIY every time your family compilation changes.


Bottom Line:  This is something you do a couple times in your life.  Probably three tops -- once in your 30s, once when your kids are older, and once when your older and think more about charitable giving and the like. 

Think about how much money you will make over your life (including investment returns).  Probably millions and millions.  There is absolutely no point in cheaping out $300-400 when the consequence could be tens of thousands of dollars in estate administration fees, taxes, etc. And I've seen the consequences go all the way into the hundreds of thousands.  All so someone could save a couple hundred bucks.

Honestly, as a lawyer, these threads exhaust me. Pay a lawyer. Assuming you just need a basic will, you should be able to get an estate planning package for $300-500.  If you need something more, you'll be glad a lawyer told you so, because it will save you tends of thousands of dollars.

Otherwise, your "peace of mind" isn't worth the paper it's printed on. And anyone telling you "oh my DIY will is great" is obviously still alive and has no idea what they may be getting their family members into if/when they die and have what may be a non-compliant will.

Sorry for the rant.

oldtoyota

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Re: Talk to me about wills
« Reply #9 on: January 18, 2019, 09:44:00 AM »
TL / DR: Get a lawyer.

Other

What is your family structure? Do you have kids from previous relationships?

Would a trust be better than a will?

I worked with a lawyer so am familiar with some of the considerations yet there are many more to be taken into account. Instead of asking here, I'd look for referrals to an attorney with experience drawing up wills and planning estates. It can be a real mess if this is not set up.

In the short term, my non-lawyer advice (but from the lawyer I worked for) is to have your cars, house, etc in BOTH names.  The other thing I learned is to have your trusted person designated as your 401K, IRA beneficiary as that designation will likely take precedence over a will.

Again, I am NOT a lawyer, and the above is what the lawyer I worked for recommended doing.

Trusts are not always recommended. However, they can make life much simpler in certain circumstances. Good to ask an expert.
« Last Edit: January 18, 2019, 09:45:42 AM by oldtoyota »

Check2400

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Re: Talk to me about wills
« Reply #10 on: January 18, 2019, 01:52:40 PM »
Write a pour over will to transfer anything you missed into your trust upon your death. Know for certain that you have executed your documents properly (notary/witnesses).

Also a lawyer, and I feel no need to put a disclaimer that DIY will is a bad idea.  DIY trusts are just as bad. 

The above post in full is remarkable, but to follow the quote's recommendation to do a DIY will and DIY trust with the statement that you should "know for certain that you have executed your documents properly" is ... bold.  How are you going to know you've executed them properly?  More importantly, how are you going to know whether the properly executed document is proper? 

I'm not going to validate my law degree as imbuing me with superior specific knowledge, but I have learned that the legal world is the most tangible profession I know of where another person's sole job is to review your work in order to invalidate your work and make you suffer the consequences of that invalidation. 

DIY Trusts are even worse than DIY Wills since they require ongoing maintenance, upkeep, and obligations.

Some War Stories:

1) DIY Will--real estate owned before marriage.  Wife dies, her interest in property goes to husband under Will.  Will is laughably inadequate, so her interest in property goes to Daughter.  Daughter is 3 years old.  Rather than wait 15 years until she can legally sign documents to sell a house Dad can now no longer afford, we spend 4 Months and $5000 to get the Court to grant him permission to buy his daughter's interest in the property in order to then sell the property.  As a cherry on top, those funds are now sitting in the registry of the Court until she turns 18 earning almost no interest, since, you know, her mom Did it Herself.

2) DIY Trust--Man owns property, man hears that trust is a good thing because rich people have them, makes a trust and then transfers property to a trust, but doesn't have trust documents, arguably transferred it improperly to the trust instead of the trustee, and then goes to evict my client from the property but files the petition personally instead of as trustee 'because it is his property' and I win because he doesn't actually own the property he's looking to evict someone from. 

3) DIY Trust--This guy actually paid a lot of good money to get a trust for his sizeable assets in order to streamline the multistate ownership issues and tax shelter them as he actually had potential estate tax ramifications (spoiler, MMMer's probably don't have $12 million dollars to worry about estate tax issues to validate a trust).  Good for him on being a good fit for a trust, and getting it done.  If only he would have paid the extra money to implement the trust instead of simply signing the trust documents, putting them into his safe deposit box, and never actually transferring or funding the corpus of the trust with his sizeable assets.  But the zero assets he held in that trust were seamlessly transferred without the need for probate, I guess.

4) DIY Will--Older woman lived with her same sex partner most of her life, but was never able to get legally married.  Partner owned the house they lived in and an investment property acquired during the relationship.  After her partners death, the long distant and greedy nephew, who is the sole heir of the childless partner by statute, isn't interested in doing the right thing, so a lifetime of assets lands in some ingrates lap.  Telling her that the email from her partner 'giving' her her properties upon death wasn't sufficient was a very hard conversation to have. 

I hope this doesn't come off as some war drum from a lawyer to churn fees for the profession, it is not.  That is reserved for large asshole clients and/or corporations fighting petty battles on pride and principal at the expense of good business decisions and optimized returns on investing in a lawsuit.  /s

The probate cases I see are some of the saddest.  Sad because I am dealing with the survivor, who thought that things were taken care of and, if they're lucky, get to pay me for the pound of cure because they didn't properly do the ounce of prevention.  I say if they're lucky because I won't take someone's money in a case I can't see a legal basis for. 

If you want to DIY it knock yourself out, you won't be around to experience the fallout.  As someone who has to try and put the pieces back together, who knows the cost to meet with a lawyer and get an actual estate plan, hopefully I can convince you that this is a prime example of being cheap over being frugal.  http://www.mrmoneymustache.com/2012/10/24/frugal-vs-cheap/

robartsd

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Re: Talk to me about wills
« Reply #11 on: January 18, 2019, 04:10:24 PM »
In the short term, my non-lawyer advice (but from the lawyer I worked for) is to have your cars, house, etc in BOTH names.  The other thing I learned is to have your trusted person designated as your 401K, IRA beneficiary as that designation will likely take precedence over a will.
You are correct that a designated beneficiary on a financial account generally takes precedence over a will; however, if you have a "trusted person" named as a beneficiary on financial accounts, but want them to distribute to others; you are setting up two transfers which likely will have tax consequences. Also, they don't have to do what you wanted them to do (unlike your executor or trustee who has fiduciary responsibility).

Heinz

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Re: Talk to me about wills
« Reply #12 on: January 18, 2019, 06:57:37 PM »
I disagree with having items in both names.  Assets can be frozen.  We have:  a trust in my wifes name, for 90% of our assets; durable power of attorney; medical power of attorney; living will (directive for end of life).  I have about 10% of assets in my name only so if my wife dies first I can access them.  This is an area it is worth spending money on — mistakes are hard to cure. 

ReadySetMillionaire

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Re: Talk to me about wills
« Reply #13 on: January 19, 2019, 11:34:23 AM »
I disagree with having items in both names.  Assets can be frozen.  We have:  a trust in my wifes name, for 90% of our assets; durable power of attorney; medical power of attorney; living will (directive for end of life).  I have about 10% of assets in my name only so if my wife dies first I can access them.  This is an area it is worth spending money on — mistakes are hard to cure.

Pretty much what I was trying to say, but in way less words.

oldtoyota

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Re: Talk to me about wills
« Reply #14 on: February 23, 2019, 09:27:15 PM »
In the short term, my non-lawyer advice (but from the lawyer I worked for) is to have your cars, house, etc in BOTH names.  The other thing I learned is to have your trusted person designated as your 401K, IRA beneficiary as that designation will likely take precedence over a will.
You are correct that a designated beneficiary on a financial account generally takes precedence over a will; however, if you have a "trusted person" named as a beneficiary on financial accounts, but want them to distribute to others; you are setting up two transfers which likely will have tax consequences. Also, they don't have to do what you wanted them to do (unlike your executor or trustee who has fiduciary responsibility).

Yes. In my own case, my beneficiary is the person I want to have the money. I've since learned that a will does not  (can not?) dictate who will receive retirement accounts. That is done with the beneficiary designation on each retirement account.


iris lily

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Re: Talk to me about wills
« Reply #15 on: February 24, 2019, 09:39:58 AM »
DH and I also have no children. That is actually why we went to an attorney because I wanted to say where assets go, not use the state’s formula.  We did use an attorney and set up a trust. It was more complex on attorney’s  end and my end then I would like.

It was complex are on our end because we have assets spread over too many places, way too many places, and it took us in more than a year to get all that stuff re-titled and even then, right now, we have a batch of individual stock that is not in the trust because it just hasn’t been titled properly.

Our attorney covered contingencies that, frankly, I don’t care about but I understand that if I had children, I would definitely care about them. I look at my assets as hey, some people will get a windfall and that is nice but if they don’t get it so what. Mainly Inwanted our estate to be easy to dispose of.

robartsd

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Re: Talk to me about wills
« Reply #16 on: February 25, 2019, 09:22:15 AM »
In the short term, my non-lawyer advice (but from the lawyer I worked for) is to have your cars, house, etc in BOTH names.  The other thing I learned is to have your trusted person designated as your 401K, IRA beneficiary as that designation will likely take precedence over a will.
You are correct that a designated beneficiary on a financial account generally takes precedence over a will; however, if you have a "trusted person" named as a beneficiary on financial accounts, but want them to distribute to others; you are setting up two transfers which likely will have tax consequences. Also, they don't have to do what you wanted them to do (unlike your executor or trustee who has fiduciary responsibility).
If you don't have valid beneficiaries designated but do have a will, the retirement account would likely be subject to the will. Assigning beneficiaries is preferable because it makes the process of transferring the funds much easier.
Yes. In my own case, my beneficiary is the person I want to have the money. I've since learned that a will does not  (can not?) dictate who will receive retirement accounts. That is done with the beneficiary designation on each retirement account.