Just popping in to say that this is a very timely thread for us. We are just now working with a financial advisor to consolidate our assets, and with an estate attorney to make a living trust. We are both in our early 60s and are determined not to leave our children with a mess.
Yes, my H’s relative procastinated (as we all do). But finally, when I asked if she wanted to have an estate attorney come to her home to help her heirs save at least $100,000 in probate fees agreed to have the attorney meet her in her home.
We organized her year’s worth of financial documents that was all in one box and made a spreadsheet of all the accounts we could find of hers. She met privately with the estate attorney and shared the spreadsheet of assets with her. That was Friday.
Monday, the attorney returned with an entire estate plan drafted as client had directed, including living trust. Everyone signed. Tuesday, the relative passed peacefully, serene in knowing she had tied up loose ends as best she could. Even with the estate documents, it took over 2 years to fully distribute all assets and close the estate, due to many different accounts in various locations, as well as real estate.
Interesting responses. I never said not to see an estate planning attorney. In fact, I think that’s essential. Work with many of them and they fix so many problems that other attorney’s create (just like you see a specialist physician for specific issues). My comments were narrowly pointed to wills and probate as someone upstream was referring to getting a will and avoiding probate and a will does not accomplish that. Again, doesn’t mean you shouldn’t have one (I do - critical if you have minor children, want healthcare directives, etc.), it just doesn’t prevent probate.
TOD is Transfer On Death and is the beneficiary of a brokerage account. It prevents a brokerage account (non qualified) from having to go through probate. Rather than having a joint account during life (where other party has as much control over assets as you), this is a way for you to control the account but leave it to a specific person or persons upon passing without probate. Bank accounts have something similar but may call it something else (My BofA accounts are ITF - In Trust For - and essentially do the same thing).
The law changes frequently. Estate planning is not an event, it’s a fluid process. See a good estate planning attorney. Set up a plan to meet your needs. Revisit as your plans or needs change. Get input from attorney on new issues or changes in the law.
Not to get off topic but we have a long list of account log in info as well. Although I have all log in info on both a flash drive and on a separate external hard drive, does anyone use a password manager? It seems like good idea, but putting all that info out there scares me to death.
As to important papers: I scan a ton of documents and keep on flash drive with backup copies on separate external hard drive. I was able to empty all banker boxes.
Yeah. Like wills “guarantee” probate. Everyone needs a will to handle those assets that fall thru the cracks of other estate planning vehicles. Most states have simplified estate administration which avoids the probate “horror stories.”
I don’t know where you get this from. But if it is a true joint account, with rights of survivorship, it is not true at all. While living, both own the account equally. Upon death, the living owner becomes the sole owner.
What usually happens is parents will put a kid on the bank accounts “just in case” and when the parents die, the kid may end up with an “inheritance” that was not really intended. If it’s a lot of money, problems can arise with other siblings.
Rule 1 – die broke. It simplifies everything. 
For most, estate planning doesn’t have to be that complicated.
The vast majority of us will be under the taxation limits, so the tax issues become moot. Of course, this is something you have to keep monitoring because they change frequently these days.
Don’t be afraid of probate. Most states have simplified administration. Illinois, for example is $100,000 or less. So you don’t have to “protect” every nickle. Even for regular probate, in simple cases it’s not that bad. Just takes time as there are waiting periods and such. Keep on top of the lawyer and don’t let them drag it out. Mom’s house had to go thru probate because it was taken out of the trust to refinance and never put back in.
Every estate should have a will. Many transfer documents executed during life may fail and the will will catch everything and distribute it appropriately. A lot of living trusts fail because assets don’t get titled properly, especially new stuff acquired after the trust. See mom’s house above.
Transfer as much as possible outside of a will or trust. Things like insurance policies, retirement accounts, etc. should have beneficiary designations. One WARNING – never make a trust the beneficiary of a retirement account (IRA, 401k, etc.). If you do, you may have serious tax consequences because it will likely be considered a distribution.
If you have hard assets, then set up a trust. Just make sure you keep everything up to date. (see mom’s house above).
Stay away from RE in different states. Get that sold or transferred while you are still around. It just complicates matters.
One of the best things you can do is to pick your funeral home and let the kids know. There is nothing worse than an unexpected death and trying to figure what funeral home to use.
@yourmomma In most states, you don’t need a funeral home. You can do direct cremation if that is what you wish. Just call the crematorium and have them pick up the body. You can even arrange a home funeral and burial. I know our states allow you to keep the body for 3 days. I plan to pay up front to the crematorium and to have them pick me up at my passing. Though some friends, are coming up with green burial ideas and services.
^^ again, didn’t say one doesn’t need a will, actually quite the opposite. Also never commented on the “horror stories” of probate, just simply said that wills create probate. If their is a probate estate, a will starts the process of probate. Everything else that falls outside the probate estate avoids probate (beneficiary contracts, JTWROS, etc.) The fact that states have simplified the probate process doesn’t mean one avoids probate. It just makes the probate process easier.
Yeah, not sure what the fear of probate is all about. Tying up the loose ends of someone’s financial life is going to be messy and tedious, but in most states probate isn’t anything to worry about. Actually, it’s helpful in that it provides some structure and some rules that financial institutions know and understand. Debts, for instance. When you enter probate in my state you give creditors 6 months to request payment of debt from the estate, if they miss that deadline they are out of luck.
And there are different opinions on how much should transfer outside of wills or trusts. TOD designations can speed things up, but if you don’t keep up with them they can skew payments. Like leaving your ex as a TOD on an account or beneficiary for life insurance. If everything goes to the trust you only have to update the trust.
Trusts can be structured to receive IRAs and 401Ks and still allow the payments to stretch out, but they have to be specifically designed for that, which is why you need an estate attorney. We don’t plan to do it that way, but if you have young or spendthrift kids you might want to. Lots of options out there.
45 from @yourmomma is correct -- at least in California. When Mom died, I notified the bank immediately, but that had no effect on my rights as a joint owner.
So, the whole joint account getting frozen seemed “wrong” to me, but as I did some googling, I did find ONE exception that can cause that to happen. I read that if a SS payment had been direct deposited into the account (whether joint or not), that it can be frozen until that amount is reimbursed back to SS. My understanding (limited) is that you do not get a check in the month you die, so if it’s already been deposited, it has to be returned - not sure how that process works, though we will be finding out. Let me see if I can find the article that talked about that…
Here it is: https://finance.zacks.com/can-bank-hold-funds-joint-account-spouse-dies-9396.html. You can scroll down to read the exceptions on the joint accounts.
ETA: it appears the bank is responsible for returning any amount of SS that was direct deposited.
Whether it’s a funeral home, creamatorim, or something else – who’s going to handle the body. Mom dies in her home. Found about 9 pm. First ambulance then cops to investigate. By 11 pm they are all done and basically wave goodby with mom lying there. We have to call the funeral home to pick her up. I look at my brother, he looks at me and we both say WT heck. Here it is almost midnight and we are trying to figure out who to call. Kind of sucked. If you let your kids know who to call it’s one less thing to
@Hoggirl : No. I checked in with SSA and Mom’s annuities the same day I called the bank. Every one of them said “thanks & no problem.” Her account stayed active, not frozen, and all of them were able to pull back the automatic deposits [Mom died about five to 14 days before they were scheduled, so they could not be stopped and all went through]. They needed a copy of the death certificate [not a certified one, which was nice because those are $$] and other paperwork to do so and to terminate the ongoing payments, but were willing to accept my representations to suspend further payments and were grateful to have the heads up. The Social Security Administration gets a lot of grief, but I was very impressed by their professionalism, and it was very easy to Google for how to report Mom’s death to them.
@yourmomma : Kinda agree. Mom died in the hospital [broken hip at 96 is not a good thing] but I still had to find a solution rather than leaving her lying in the hospital morgue. Methinks me and the missus need to address this – and update the trust, since the provisions for looking after a 16-year-old don’t have much relevance to a 27-year-old married grad student. Thanks for the wake up call.
My dad died in the hospital(somewhat unexpectedly) but we knew who to call. The local longtime funeral home was always going to be the obvious choice.We set up things in advance though with the funeral home for my mother. She was in hospice care at home and the hospice nurse called the coroner’s office first to report the death (middle of night) and then the funeral home. The hospice nurse arrived about an hour after we called , the funeral home arrived about an hour later. My mother was out of the house before sunrise, and the neighbors were none the wiser! She was shy and would not have liked a spectacle!
My mom dies before my dad, and her estate went it to probate because of a fraudulent lawyer. Everything was held jointly except her car. My son was 16, and could inherit the car directly. The lawyer put that as a few dollars over probate to make money. He was disbarred while I was trying to fight him.
So, I took everything they joint owned and added it into fidelity or vanguard accounts. I added my name to bank account and box. I had my dad sign a realtor agreement to sell his condo, even tho,he really didn’t understand what he was doing. In all fairness, I didn’t list his home u til,after he was deceased. In sum, I never needed a lawyer for his estate. A few death certificates was enough. I still lost $1600 to the state, for $ listed under Fa in control of Mo’s estate, prior to,his resigning and leaving me in charge.
I started to updat e my Will and Trust 2 weeks ago. I will feel,better when it is done. I’ve learned a lot from the Bag a Week thread. I can mark,all,the boxes as to which he can just throw, and which need to be saved for a few years.
Does anyone have a good resource for a living will? I have heard of the Five Wishes website and might do that. We do have a lawyer and we will be reviewing our estate planning (such as it is) shortly but I thought the living will might be something we do on our own.
Every single time I go to a doctor appointment or have a routine blood test, they ask me if I have a living will and I am tired of saying No!
Here is the link to my state’s statutory forms. https://www.dhs.wisconsin.gov/forms/advdirectives/index.htm. Your state might have something similar.
Note that there is a difference between a living will and a health care power of attorney. My feeling is that it’s more important to have a health care power of attorney, because it covers more topics and it actually gives power to another person (e.g., a family member or friend) to make health care decisions on your behalf. Whichever document you decide to use (and you can do both), make sure to talk to family members or friends about what your end-of-life wishes are.
Nearly everything financial in a ToD/PoD account. All will avoid probate.
California is a community property state that allows the property to go ToD, so no need for a will to cover assets.