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(Disclaimer: I am making this thread because I want to learn, not because I have any knowledge of this subject.) We getting older goons. We have jobs, houses, kids. Time to start thinking about dying, like in a mature adult way. People might start fighting over your carcass, who gets the scraps? Uncle Sam, lawyers, heirs, creditors, all kinds of birds show up to feast on your gooney mass. May as well give them your thoughts on the matter, maybe you can even prevent them squabbling too much. Or, the opposite, if that's your thing https://en.wikipedia.org/wiki/Great_Stork_Derby Some basics: Power of attorney If you get incapacitated this lets people make legal decisions for you. PoA ends when you die Advanced medical directive Tell them docs to pull the dang plug, don't spend all the money keeping you as a vegetable. Estate All the poo poo you have when you die. Probate The court chaperoned process of divvying up your estate. Can take a while. Intestate You died without making a will. Your state will have statutes that determine who gets what in the probate process. Will Legal document you make that determines who gets what in the probate process. It's generally accepted that a will you downloaded off the internet is pretty much useless, or worse does things you don't want. You really do have to pay a lawyer a small fee to arrange a proper will. Trust A legal entity you create that owns your poo poo for you. Now when you die, the trust still owns the poo poo, so the poo poo doesn't need to go through probate before heirs or whoever can play with it. Maybe an alternative to a will, maybe something to use in combo. Transfer on Death etc. There's also things like life insurance, which pays to the beneficiary when you die, and isn't part of the estate/probate process. You can also make accounts ToD/PoD which maybe means they bypass probate? I dunno, go talk to a lawyer Taxes A couple points on uncle sam's share- INHERITED PROPERTY ASSUMES THE COST BASIS OF FMV AT THE TIME OF INHERITING There's a $12.06M inheritance tax exemption (that's 2022's number). As in, inheritors pay no inheritance taxes unless you're really quite rich.
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Jan 3, 2022 21:52
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I just started this process today (well last week but I was on vacation and just submitted my info at lunch). Going to get a Trust and Will set up. I am mostly doing this at the request of my partner since we are not married. She doesn't want to have to deal with any BS. The hardest part so far is figuring out how to divide the assets. 35 yo with no kids but a bunch of assets. Should be simple? Seems like my lawyer has all the stuff he needs and I will have some stuff to review in 3 weeks. I will report back as it develops.
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Jan 3, 2022 22:30
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I’m interested in learning from people in this thread and glad that the thread was posted. Thanks! I’d be particularly curious if there was a recommended list of questions to ask a lawyer when setting up wills and trust for a family.
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Jan 3, 2022 23:38
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My parents recently switched to a trust from a will. Apparently when you live in California a trust saves a lot of future headaches, moreso than many other states. I should probably start looking into this stuff myself, so looking forward to learning from the experiences of others.
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Jan 4, 2022 02:38
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Chiming in that I'm a trusts & estates litigator from the legal threads and I will likely never unbookmark this and will chime in whenever appropriate, but am also happy to answer any specific questions directed to me.
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Jan 4, 2022 06:00
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I used to adjudicate Medicaid Long Term Care eligibility policy. I have no idea how state specific my knowledge may be and am not going to be giving anyone any specific advice but also if I do gently caress you I'm not your lawyer. Even when I was an adjudicator I couldn't retain all the policy I had to apply I was constantly looking it up. For the record. Anyway. The things I think are most relevant that people might not anticipate are the look-back period to give away assets and setting up an income trust. You don't get assistance unless your countable income is under the limit, no more buying-in.
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Jan 4, 2022 06:09
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Great to see this thread. We are just starting the process of trying to find someone to help us setup a trust/will now that we have a child.
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Jan 4, 2022 06:11
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I'd be interested in learning about this - my mom's told me (exclusively in conversations over the phone where it just kinda was slipped in unrelatedly) that I've been named executor of her and my dad's will. From my understanding, you want a professional in that position but I don't know why, only that people have mentioned it in passing in other BFC threads. Is that dependent on any particular factors? I'd kinda like a reason to ask to see what the will I'd be responsible for says, and if changing the executor to a professional would be feasible I'd like to know what I'm asking them to do and how to best locate one since I live a few states away.
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Jan 4, 2022 10:27
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I should look into this. I only recently started to have a positive net worth, and don't have any spouses or kids to squabble over it, so should definitely set up some structure so all my horded goonbucks go to my friends and not the state.
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Jan 4, 2022 11:19
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Power of Pecota posted:I'd be interested in learning about this - my mom's told me (exclusively in conversations over the phone where it just kinda was slipped in unrelatedly) that I've been named executor of her and my dad's will. My parents made me executor of their wills and included a provision that I can hire a lawyer with the estate funds to help me fulfill the duties. They also provided me a copy of the will and we have discussed their wishes multiple times, so I do suggest having those discussions with your parents if they are open to it. It would suck to be surprised when they pass.
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Jan 4, 2022 17:34
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I asked this in the insurance thread, but maybe this is a better place: would love a good sense of what's an appropriate life insurance policy vs. income/mortage/etc. Also starting to think about this in the context of some family members and who is going to be in charge of their care. Are there any good guides of "if you're responsible for someone, you should make sure you xyz?"
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Jan 4, 2022 18:47
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Upgrade posted:I asked this in the insurance thread, but maybe this is a better place: would love a good sense of what's an appropriate life insurance policy vs. income/mortage/etc. Here's my take: It depends. You have to look at your specific situation and figure out what works best or what options are available. For example: I'm 40 years old, married, with a 10 and 12 year old kid. If something happens to me, I need to replace my income for the next 10 years or so, so my wife can finish raising our kids without any sort of financial difficulty. She also works, so after the kids are raised, she'll need to survive on her income, and anything left over until retirement. I'll gross about 140K this year, so 100K a year worth of insurance (no taxes) would replace my income without issue (not even counting any gov benefits my kids would get). So I figure I need 1 Million dollars worth of life insurance. If I die after my youngest is 20, my assets should be at the point where I don't need life insurance anymore. My wife should have no issue if I die anytime after I'm 50. So a 10 year term life policy of 1 Million dollars is perfect for my needs. Now I'm making the decision to just replace my income until my kids are adults. Some people might want more life insurance to help pay for the kids college, or if their spouse doesn't work they'll need income replacement for a longer period of time. Then maybe a 20 year policy of 1.5 or 2 Million might be better. My wife has a good career though, and she'll be ok if I die early. She won't be living in luxury, but she should be able to maintain our current standard of living without any issues. We already have healthy retirement accounts, so she's set for retirement. I've given this a fair bit of thought, as my family has a history of dying early, and her family lives well into their 90's. My dad passed at 52, his dad at 57. It's morbid but I don't anticipate ever retiring, but I do want to make sure my kids and my wife are taken care of if something does happen. Now things like Elder Care costs, a Special Needs Trust, or Long Term Care insurance is another discussion. Not sure what context you are talking about regarding your family and who is responsible for their care.
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Jan 4, 2022 19:24
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Thats good advice. For family, my wife and I have decided we're going to look after her mom for whatever that entails. I know she has a living will, but not sure what she has beyond that. Kind of asking if there's a good guide of things to have in place incase something happens. Less concern about money (she has a pension and good insurance) and moreso about legal documents/things to know.
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Jan 4, 2022 19:30
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I'll just repost this life insurance post I made ages ago in the long-term investing and retirement thread. It's mostly yelling at people about term vs. whole life insurance, and I am not an expert. Leperflesh posted:Here's the thing. Everyone is guaranteed to die. Imagine you're an insurance company. Why would you want to sell an insurance policy that 100% of your policy holders will end up making claims against? I have questions for the thread, too. Here's a big one: my wife and I have no kids. If we both die in a car accident or something, without a will, and all our assets go into probate, who specifically would have claims on our estate? We live in California, if that matters: -My natural parents? My wife's natural parents? -My step parents? My wife's step parent? -My former step parents? My wife's former step parent? -My wife's twin brother? -My half-siblings? -My wife's twin brother's step-children? -Children, step-children, etc. of my half-siblings? -My wife's mother's (deceased-) father's last wife and her kids? As you can see that's a whole mess of complications, it's very obvious that we need a will and should probably set up a trust too.
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Jan 4, 2022 19:42
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I chuckled a bit looking at my regdate, how long I've been on here, and then seeing this thread and going "oooooh that's me, I should check into this!". We old, goons. Here's my basic Step 1 question -- who do I talk too / how do I find someone 'good' to talk too in my area? I've got to feel that for 30-somethings with similar asset types / no kids / 'simple' setups, there are younger lawyers / firms that specialize in churning these out in a cost-effective fashion because we're not as complicated as folks who have kids, multiple properties, known medical conditions, etc. I already have my TODs / beneficiaries set on my 401(k), brokerage accounts and things like that, but gently caress if I know for my house / mortgage / etc. How much should this cost / what's a general number above which you're getting taken to the cleaners? I've got to imagine it's around $2-3K for a few hours of partner/lawyer time + paralegal time?
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Jan 4, 2022 19:49
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Leperflesh posted:
The keyword/term you want is "intestate" for this situation. Laws vary by state, so here's a link to California's laws covering intestate succession. I had to learn about this when my younger brother died without a will. He didn't have any assets though, so I didn't have to deal with anything. https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=PROB&division=6.&title=&part=2.&chapter=1.&article= A will or trust would be a good idea if you wanted certain things to happen in the event you both pass at the same time. Wills can be contested though, and money brings out the absolute worst in people.
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Jan 4, 2022 20:26
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Upgrade posted:Thats good advice. You should call your county bar association and ask for a referral for an estate planning attorney who can also do a general durable power of attorney. The consult and POA won't cost much if the rest of EP isn't what she needs right now and the POA will be a good guide for things you can expect to encounter, e.g. it'll say words like "representative payee" and "Medicaid spend down" and you can then just educate yourself on everything that's unfamiliar. Also for the love of god if she favors y'all in her will or otherwise for taking care of her paper your file endlessly because "oral agreement to give you the house but it's not in the will" results in a fight that destroys the family, uh, a lot of the time. Leperflesh posted:I'll just repost this life insurance post I made ages ago in the long-term investing and retirement thread. It's mostly yelling at people about term vs. whole life insurance, and I am not an expert. Most states have specific statutes about having to survive someone for a certain amount of time to inherit from them. That will be your guidepost for what happens in simultaneous death. movax posted:I chuckled a bit looking at my regdate, how long I've been on here, and then seeing this thread and going "oooooh that's me, I should check into this!". We old, goons. See my response to above for finding someone, but the biiig caveat for people in your situation is that no matter what you put in a will, that will still has to go through probate, and probate will be more expensive than a trust by a factor of at least 2-3x if everything is right and 10x+ if anything is wrong if your net worth is at least like even low six digits. And your assets will be locked up with the court until everything resolves, which may be a year or more. And all your everything becomes public record for "take-advantage-of-people-whose-loved-ones-just-died" industries to
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Jan 4, 2022 20:28
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TY both for the info, it's along the lines of what I expected. Hopefully on this first page of the thread it also serves as a reminder for everyone else, that even if your family isn't as complicated as mine, there's a pretty good chance that if you die intestate, the court is gonna not do what you particularly wanted it to do in terms of handing out your assets, so get a drat will. In my case, if my wife and I are taken out by a meteor next month, I don't want my serial philanderer deadbeat manipulative father to inherit one red cent, and I also don't want my ("former") stepmother left destitute because she divorced him (although of course my siblings would take care of her with my money if they had to). And I don't want any of my beneficiaries and inheritors to have to wait years for courts to work poo poo out before they can get their hands on my life insurance money, which they could seriously use right now.
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Jan 5, 2022 00:34
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Nonexistence posted:See my response to above for finding someone, but the biiig caveat for people in your situation is that no matter what you put in a will, that will still has to go through probate, and probate will be more expensive than a trust by a factor of at least 2-3x if everything is right and 10x+ if anything is wrong if your net worth is at least like even low six digits. And your assets will be locked up with the court until everything resolves, which may be a year or more. And all your everything becomes public record for "take-advantage-of-people-whose-loved-ones-just-died" industries to So, if I understand correctly I think you're saying that I might actually want to find someone to help me out with a trust not a will?
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Jan 5, 2022 00:43
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movax posted:So, if I understand correctly I think you're saying that I might actually want to find someone to help me out with a trust not a will? Find a lawyer, tell them what you want to happen, and ask what they recommend. They will likely recommend a trust. If they recommend a will instead, ask them why, and ask them whether probate is a concern. If their answers seem reasonable and make sense, sure. If they sound like a lunatic, get a second opinion.
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Jan 5, 2022 00:53
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movax posted:So, if I understand correctly I think you're saying that I might actually want to find someone to help me out with a trust not a will? I don't know the law of your state, but in most the estate plan includes a trust and a will. Assets that are practical to fund into the trust while you are alive are, and you get a "pourover" will that puts anything missed into your trust, though those assets still have to go through probate. This may include transfer-on-death wills for real estate, making the trust the pay-on-death beneficiary of your financial assets, and other legwork in the funding phase. The best question to ask whoever you meet with is "After you draft my estate plan, what are you going to do to make sure I have funded my trust correctly?" The goal is to have either nothing go through probate, or so little you can use whatever abridged administration for small estates your state has.
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Jan 5, 2022 04:09
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Nonexistence posted:The goal is to have either nothing go through probate, or so little you can use whatever abridged administration for small estates your state has. Thanks for sharing your expertise. I had a question about this goal. If, hypothetically, a couple with one child didn't care what happened beyond the three of them, what does avoiding probate do? Is it just less time and money to settle the estate? Or, do you give less avenues for meddlesome extended family to meddle in the survivor's affairs?
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Jan 5, 2022 23:33
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Epitope posted:Thanks for sharing your expertise. I had a question about this goal. If, hypothetically, a couple with one child didn't care what happened beyond the three of them, what does avoiding probate do? Is it just less time and money to settle the estate? Or, do you give less avenues for meddlesome extended family to meddle in the survivor's affairs? Keeping things private does wonders to deter would-be Sackville-Bagginses, and since a trust costs you less than probate, not getting a trust is you paying more in order to give said relatives more to work with. At the end of the day meddlers will meddle, so being proactive about keeping it as toothless as possible will help.
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Jan 6, 2022 00:13
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Right on, thanks again Hmm, doing more of my homework, I learned I already have a trust. When I opened a brokerage account, I filled out the Transfer On Death thing. I didn't really internalized the fine print that this was a Big Decision and I should Consult My Estate Planner first. Anyway, the only other assets I have are retirement accounts and a house. I'm hearing that getting the house to skip probate is cheaper, but the privacy thing seems irrelevant since people know we own a house. Is there another reason to get a tailor made trust?
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Jan 10, 2022 19:00
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Transfer on death isn't a trust, I don't think? I want to do some monte carlo projections for my retirement, anyone got a preferred tool for doing that? Ideally it would include things like: expected social security payout, a way to model appreciation of a home, take into account tax status of various retirement accounts, etc. I've seen several tools just googling around, but I have no idea which ones are any good.
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Jan 11, 2022 23:52
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The sidebar of the fatFIRE subreddit has some good tools this
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Jan 12, 2022 00:36
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Do I have to make a login on reddit to see it?
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Jan 12, 2022 01:28
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I have a reddit login but I couldn't find the tools (I don't know how to use reddit very well though) There is a financial independence thread here in case you hadn't seen it https://forums.somethingawful.com/showthread.php?threadid=3560269 and I think they were posting those tools too As for ToD, I don't know if it is technically a totten trust but it sounds indistinguishable to me. Probably depends on which state you're in and whether you signed in blue or black ink
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Jan 12, 2022 02:26
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Leperflesh posted:Transfer on death isn't a trust, I don't think? Monte Carlo sims are okay but not great because returns aren't necessarily independent. Check the spreadsheet/tools from EarlyRetirementNow.
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Jan 12, 2022 04:20
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I just reviewed all my documents. It is a lot of pages and a lot of legal stuff. After reading through all of this stuff it definitely makes sense to not just "legal zoom" it and hope for the best. I sent back about 25 questions to my lawyer. Once I get those answers back and can update the documents appropriately I will probably be able to answer any questions on the process and what it gets you at the end/how it all works when you die.
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Jan 18, 2022 06:00
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I enjoy DIY including taxes, but this seems like a job that is really bad to try and hack together on your own. You'll never know if you screwed up, but your loved ones might get an unpleasant surprise. For me I still wonder if I need a tailor made one. My net worth was zero my whole life until a few years ago, and maybe I'm still psychologically in that mindset. Also I think the only reason it isn't zero today is not buying stuff I don't need. Do I need a trust? I might be broke again tomorrow anyway! Here's TOD failing someone (though not getting married seems to have set the stage) https://www.reddit.com/r/legaladvice/comments/s8wcfu/financial_accounts_closed_by_sos_family_to_avoid/ quote:Financial accounts closed by SO's family to avoid paying me through probate. What can I do?
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Jan 22, 2022 01:11
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Epitope posted:I enjoy DIY including taxes, but this seems like a job that is really bad to try and hack together on your own. You'll never know if you screwed up, but your loved ones might get an unpleasant surprise. Trusts can help with creditor protection as well, especially for financial watershed life events like divorce and incapacity. Contemporary estate planning contemplates all of that, not just what happens after you pass.
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Jan 24, 2022 22:42
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My lawyer mentioned something about needing to file taxes for my deceased grandma's trust. The trust generated no income last year, do we need to file taxes? And for TY2022, the only income is liquidation, such shouldn't generate taxes on inherited items/real estate, right?
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Mar 8, 2022 13:32
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My mom has a defined benefit pension option and is going to annuitize it, there’s a survivor option and she’s planning to choose that, I told her to nominate my younger brother since he’s likely to outlive me but I’m wondering if she can name a trust as the survivor beneficiary?
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Mar 15, 2022 07:49
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Hey thread! Looks like my wife and I need to start thinking about what to do in the event that we both die, now that we have a son.  It sounds like step 1 is finding a local attorney who can help us set up a trust/will. Is contacting the local bar association the best way to do this? I have a friend who's a corporate lawyer: surely he'd know someone "good?"
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Mar 15, 2022 17:42
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How does one actually convince a stubborn old man to write an advance health care directive & DPoAHC?
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Mar 15, 2022 17:55
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Jows posted:My lawyer mentioned something about needing to file taxes for my deceased grandma's trust. The trust generated no income last year, do we need to file taxes? And for TY2022, the only income is liquidation, such shouldn't generate taxes on inherited items/real estate, right? https://blog.taxact.com/filing-form-1041/#:~:text=If%20the%20estate%20has%20no,a%20return%20must%20be%20filed. quote:Estates Note that this is for estates that have not made any distributions to beneficiaries. If distributions have been made, K1s have to be distributed, and form 706 may also be needed, etc. To actually answer your real question, though: the estate should hire an accountant and pay that accountant out of the estate, to handle all this tax poo poo for you. Your estate lawyer should be able to recommend an accountant/tax person familiar with trusts.
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Mar 15, 2022 18:08
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Residency Evil posted:Is contacting the local bar association the best way to do this? This and checking reviews Skinnymansbeerbelly posted:How does one actually convince a stubborn old man to write an advance health care directive & DPoAHC? Good luck pal, but the best you can do is lead a horse to water. Just document where the assets are.
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Mar 15, 2022 22:31
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I have one from the receiving side. My aunt recently passed. Her estate is basically two houses, well all of hers and part of her parents' (she was co-owner of her parents' house with my mother and my other aunt). It sounds like she's leaving part of it to her sisters but also to me and my sibling and two cousins. So this would be co-ownership with 6 people. She also wanted them to be rental properties, not just sold. The others seem to be interested in keeping with that plan. I don't think I want to be co-owner of rental properties, especially since they will likely be disfunctionally managed. I definitely don't want to be liable for renters getting hurt through owner negligence. If I can't see a path to sell my share, should I disclaim my inheritance?
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Nov 15, 2022 20:23
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Ask your attorney about brokering a deal for the other beneficiaries to buy out your share, with the nuclear option being to partition.
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Nov 15, 2022 21:47
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