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Can we talk about planning to die (Estate planning)?

HoggirlHoggirl 1590 replies193 discussionsRegistered User Posts: 1,783 Senior Member
edited August 2018 in Parent Cafe
What sorts of financial estate planning have you done? I realize that different levels of wealth, types of assets, marital status, state of domicile, and family situations can make this a hugely individualized question, but I am curious as to what types of planning others have done. Let’s assume this question is for those who, at least at this point in time given the current tax laws, won’t have estates large enough to require the payment of federal estate taxes and have nothing “unusual,” but a decent amount of wealth. I’m just looking for general things you considered in your planning, and why you made the choices you did.

Fil passed away a couple of weeks ago. He had a will, and things aren’t terrible, but some of his lack of planning and choices of how to title assets is going to necessitate probate/make things more complicated than they need to be. His record keeping wasn’t perfect, we’re having to dig to locate some assets, etc.

Fear not!! We plan to consult with a tax attorney for advice after things settle down with fil’s stuff. His passing is just spurring us consider doing *more* than we have already done. My goals would be for simplicity and as smooth of a transition as possible. We have only one adult ds who is currently single and freshly graduated from undergrad about to start a job.
edited August 2018
172 replies
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Replies to: Can we talk about planning to die (Estate planning)?

  • gouf78gouf78 7773 replies23 discussionsRegistered User Posts: 7,796 Senior Member
    We have wills and pretty clearly marked files. (I hope).
    Make a book that has all the extras in it. Passwords, account numbers, etc. and then make sure someone knows where it is! If needed make sure someone can get into your safety deposit box.
    I know we haven't done everything. It really takes some thinking to plan well.
    My dad (96) has gone through most of his papers and has boxes marked TOD (toss on death). It's all the papers he still wants or needs for various reasons but will be moot after he dies. Huge gift to us!

    The funeral home we used when my mom died had a booklet for all the vital info that might be needed. (Armed forces record, funeral arrangements/wishes, personal family history with important dates). We picked one up for each family member--now we need to fill it out.
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  • rickle1rickle1 1721 replies14 discussionsRegistered User Posts: 1,735 Senior Member
    Wills do virtually nothing to avoid probate (although they are very important for other reasons like determining guardianship, etc.) In fact a Will is a guarantee for probate. It literally is the set of instructions given to a probate judge to settle the deceased affairs in probate court. That's what a will is.

    A Living Trust will handle avoiding probate, as will all contracts with beneficiaries (life insurance, IRA, brokerage accounts titled TOD, bank accounts titled TOD, annuities). A will nor a living trust will have any effect on those items (although they can be owned in trust to provide instructions for beneficiary distribution vs. outright distribution (meaning you can control how a benes receives money vs. simply giving it all to them at once.)

    Lot of misinformation in the estate planning world.
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  • momofsenior1momofsenior1 6232 replies35 discussionsRegistered User Posts: 6,267 Senior Member
    We also have a living trust and our trust is the beneficiary of life insurance, accounts, etc.....
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  • HImomHImom 33966 replies387 discussionsRegistered User Posts: 34,353 Senior Member
    edited August 2018
    We have met with an estate attorney in 2012. He prepared a basic estate plan for us with all the documents—simple living trusts, will, durable power of attorney, advanced directives.

    We gave spreadsheets of all our accts and passwords in our desk and have shown our kids where they are.

    We probably should meet with estate attorney again in the next few years to review our estate plan in light of kids getting older and changes in laws. Since we are both pretty healthy don’t feel great urgency, especially as they’re still figuring out nuances of the tax laws.

    The kids know our CPA’s name. Our estate docs are in clearly labeled folder.
    edited August 2018
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  • gouf78gouf78 7773 replies23 discussionsRegistered User Posts: 7,796 Senior Member
    @rickle1 -- Um, no. I think you have a lot of misinformation. A good estate planning attorney will save a lot of grief and money.
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  • greenwitchgreenwitch 8661 replies41 discussionsRegistered User Posts: 8,702 Senior Member
    Emphasis on "good". I've seen too many thoughtless wills in my own family to leave it all to the so called experts.

    I started to read a book called "Beyond the Grave", that I think I heard about here on cc. It was a library book, and I need to get it out again since I didn't finish it. It has some very specific instructions for all sorts of life possibilities.
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  • BunsenBurnerBunsenBurner 38428 replies465 discussionsRegistered User Posts: 38,893 Senior Member
    edited August 2018
    Check if your state has estate tax. Ours does, and a personal exemption starts at just about $2.2M, but there are no gift taxes... for some, it makes more sense to give things away while they are still alive than after their death.

    Our county has a Will Repository where one can store their original will at one of the Courthouses for a one time fee of $20.
    https://kingcounty.gov/courts/clerk/documents/will-repository.aspx
    Makes the task of locating the will easier. Check if something like this is available in your area.

    Remember, probated wills become public records. So don't say anything embarrassing or nasty in your will.
    edited August 2018
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  • HoggirlHoggirl 1590 replies193 discussionsRegistered User Posts: 1,783 Senior Member
    @rickle1 - TOD? I am familiar wth POD - payable on death.
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  • BunsenBurnerBunsenBurner 38428 replies465 discussionsRegistered User Posts: 38,893 Senior Member
  • MarilynMarilyn 3642 replies123 discussionsRegistered User Posts: 3,765 Senior Member
    We met with an estate planning specialist after we moved from Illinois to California and after our DS was well above the age of majority. We did have a relatively simple will in Illinois. Because of the low probate in California, we created a family trust and put the house title in it. So we have a will and a trust now.

    My mom had a variety of accounts in her living trust and after she passed away, it was a huge pain to get them out of the living trust, into an estate trust, and then to my brother and myself. Each of the five brokerage houses had different rules and paperwork. And she had good records and an attorney and a CPA (neither of whom were as much help as they should have been). So I did not want to leave that kind of work for DS to deal with and did not want to put anything into the trust that I didn't have to. As rickle1 noted, I made sure all of my brokerage, IRA, 401K(k), checking, etc. accounts have a BOD or TOD listed. I tracked down all our old paper savings bonds (from the wedding, mostly), and got them established into a Treasury Direct account and put DS as beneficiary. I had several stocks that I held independently and moved them into one of the brokerage accounts that had resulted from Mom's account. So now I think there are six different places where my assets reside but none of them involve trusts or probate and all of them should be able to go directly to a survivor.

    I'm annoyed that DH has one major brokerage account that allegedly cannot either be put into the family trust nor set up with a BOD or TOD. I'm not sure I believe this, but his broker is a friend of over 50 years so not much I can do to push the matter. Someone will end up dealing with it in probate unfortunately. I think all of his other assets are postioned like mine but I wouldn't bet on it.

    Our attorney provided a couple of CD's with all the account and living will etc info and we sent one to DS. It has all of the estate and account information and contact numbers, and the attorney can help him along as needed.
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  • MomofJandLMomofJandL 1579 replies30 discussionsRegistered User Posts: 1,609 Senior Member
    edited August 2018
    We have each other (primary) and our kids (secondary) as beneficiaries of our IRAs and 401ks, so that should be easy. Our house has a beneficiary deed, so that in the unlikely event that this is still the house we own when we both die, it will go into DH's trust. Other accounts are titled to my trust or DH's trust. DH and I are successor trustees for each other, then the kids.

    The cars do not have TOD designations, so they will go through probate. It has to do with how our state titles cars and how hard it is to sell them with different kinds of titles.

    We have wills, trusts, POAs, Medical POAs and a list of accounts in a place that executor (currently my sibling) and future executor (DD) know where to find. DS could find all of it in a pinch, but this kind of stuff is really not in his wheelhouse.

    I try to keep the list of accounts up to date. I need to add things to the book like how the bills get paid. Most of them are on auto-pay, but a couple are not. It should work well for several months after I get hit by a truck, for instance, but somebody is going to have to figure it out and would probably appreciate a roadmap.

    Edited to add:
    Fear not!! We plan to consult with a tax attorney for advice after things settle down with fil’s stuff. His passing is just spurring us consider doing *more* than we have already done
    I highly recommend this. The executor for FIL's estate had his regular CPA do the tax return for FIL's estate and trust (not estate tax, just the taxes for the estate accounts), and she made a mess of it. Paying a tax attorney that does this stuff all the time would have saved a bundle.
    edited August 2018
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  • HoggirlHoggirl 1590 replies193 discussionsRegistered User Posts: 1,783 Senior Member
    @BunsenBurner - thanks. @rickle1 must have been using it for transfer on death, since what you linked is only applicable to real estate. I guess the terminology used varies from state to state. Not unlike the porch, deck, patio discussion on another thread!
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  • gouf78gouf78 7773 replies23 discussionsRegistered User Posts: 7,796 Senior Member
    Just to be clear--my dad's marking of TOD on boxes means "Toss into the garbage and no need to save all this paper or sift through it after I'm gone..."
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  • HoggirlHoggirl 1590 replies193 discussionsRegistered User Posts: 1,783 Senior Member
    @Marilyn - interesting info about the difficulty of getting assets out of the living trust. I thought that was supposed to be the function of it - ease. But, then you say you have a family trust, so if your mom’s was difficult to deal with is yours somehow different than hers was?
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  • momofthreeboysmomofthreeboys 16616 replies66 discussionsRegistered User Posts: 16,682 Senior Member
    We had simple wills when we were in our thirties, but we moved to trusts a couple decades ago. We go in this year because trust law has changed so much in a couple decades...it's more of a "check up." I have not told any of the kids where "everything is" in the house....and I really should do that now that we're in our early 60s. My mom is in her 90s but we did that together when my dad died a few years ago plus she added me to all her secret accounts that exist outside the trust (which she has which I wish she didn't have LOL). I am her trust and estate executor. I did move one of H's and my annuities to pay directly so the kids will have some quick access to cash during the process. We haven't secured a grave plot either and I do want to do that in 2019.
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  • BunsenBurnerBunsenBurner 38428 replies465 discussionsRegistered User Posts: 38,893 Senior Member
    edited August 2018
    The last letter - D - is for "deed." The first letters stand for "transfer on death." You are correct, it is for deeded assets (real estate including some time share ownership).

    Speaking of real estate, this is what we learned. If you own a vaca place or another piece of real estate somewhere in a different state, it will have to be probated in that other state unless it is in a trust or an LLC.
    edited August 2018
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  • MarilynMarilyn 3642 replies123 discussionsRegistered User Posts: 3,765 Senior Member
    @Hoggirl - I guess Mom's living trust was easier than going through probate, but it wasn't easy because of all the paperwork and signatory requirement. Most everyone needed to see the language in the trust before they could tell us what we needed to do. That language is critical as to what will be needed. Some of the companies required a medallion signature guarantee to do an ownership change to move the money into my brother and my names in our own accounts. We didn't have any local accounts in California, or national accounts with a local office, so had to do that when we were back in Illinois. A couple of the accounts were fairly small so I just sold my share instead of retitling. I would have needed to do the medallion signature guarantee to retitle but only needed notarization to sell; go figure. And of course zillions of copies of trusts and death certs etc. And at some point we had to get a bank to agree to resign as co-trustee, I think to sell her condo. I've studied accounting but this was a whole new experience. Plus I had my eye on the calendar because I wanted to clear everything out of Mom's name within a year to avoid two years of post-death tax returns.

    I'm pretty sure if memory serves that it will be very easy to move the house between DH and me (whoever goes first) and not too difficult to retitle to DS. But the details escape me at the moment.

    I use TOD to mean Transfer on Death.
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  • mathmommathmom 32027 replies158 discussionsRegistered User Posts: 32,185 Senior Member
    My parents - bless their hearts - managed to have real estate in four different states. They had trusts, but it's been over two years since my Mom passed away and things are still not wrapped up! We know we need to do some estate planning, but the thought of trying to deal with my 1/3 share of all this stuff is daunting. Well actually we sold one piece already, and there was a long standing law suit for another one that finally got resolved. Florida down-zoned the property to make it worth a tenth of what it had been worth. We lost, but at least now we can just get rid of it too.
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  • PublisherPublisher 7391 replies76 discussionsRegistered User Posts: 7,467 Senior Member
    Share a list with your adult children or other adult beneficiary of the contents of any safety deposit boxes.

    Curious as to any others' experience with inherited safety deposit box contents.
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  • rosered55rosered55 4164 replies124 discussionsRegistered User Posts: 4,288 Senior Member
    Don't keep your estate planning documents in your safety deposit box. I'm sure you can guess why.
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