Creating a will - estate planning

[DocSnowball]

I find myself as one of the many healthcare professionals creating a will on the fly during these times. Started by looking at a DIY template that needs notification with two witnesses. Legal expertise is available and costs around $750-800 one time, plus 2% of assets as executor fees if the law firm becomes the executor.

 

Major decision points that I can see: who will the executor be, who do you leave the estate to and how, who will be the guardian for children (trying to keep guardian and executor separate), and how will the estate be transferred to (spouse or if spouse not surviving then to children - at what ages, in what proportions over time.

 

Questions:

Did you self-prepare or with a lawyer? What resources did you use for either?

What is the most important advice about do's and don'ts you have to share about this process?

If you saw a will be executed over time, what did you learn vicariously from that experience that you can share?

 

Edit: We live in Connecticut, US just for reference. Trying to learn and create this myself so that it can be updated every 3 years without recurring legal costs.

 

 

[SharperDingaan]

The biggest favors you can do your survivors is 1) NOT croaking!, and 2) making the executor a bank.

Those grieving have just watched you 'depart', disposed of your corpse, and are disposing of your 'stuff' - at the same time that the big payday is bringing out the worst in people. Hard to bully a bank.

 

Lot to be said for a good send off (wake), before the reading of the will.

Evening BBQ, lights/live music, free bar, clowns/bouncy castles for the kids type thing.

 

Keep breathing!

 

SD 

[Jurgis]

Quicken Willmaker https://www.amazon.com/Quicken-Willmaker-Trust-2020-Software/dp/1413326978

 

I've used the past version years ago.

 

However, I have really no clue about how to choose executor, guardian, etc. I did all the "wrong" things: spouse is executor and if spouse does not survive, then X relative. SD might be right that bank/lawyers are best as executors, but hey then you pay the fees.

 

The will I created has clearly not been used (LOL). So no clue what gotchas are there.

 

BTW, also most of my stuff is JTWROS with spouse, so that's a good thing if only one of us dies. And retirement accounts go outside the will. If you count JTWROS and retirement accounts, that leaves very little. So the will is mainly if I and my spouse both die at the same time. In which case, crap hits the fan.

 

OTOH, my situation is rather simple. And I don't care that much what happens when I'm dead.  ;D So FWIW  ::)

[bookie71]

Get a good estate attorney.  After doing taxes for over 55 years you need the comfort that all is well.  I can give you both hero and villain stories in dealing with banks (actually mostly villain).

One thought, if children are involved, give a lot of thought to the guardian as they are probably most important to you.

As to executor, consider someone who can make a decision as to where the $ go.  If one child should come down with a chronic illness the executor should have authority to spend to treat as you would if you were still around.  In real life this would come from the principle and those left would split the balance when they get of age.

GET A GOOD ESTATE ATTORNEY!  Too much is at stake to "do it yourself"

jmho

 

[stahleyp]

I think an estate is attorney is worth it for large enough estates. For the vast majority of people a will and beneficiaries/tod designations will carry most of the heavy load.

 

For me personally, I used will software to do it.

[arcube]

I find myself as one of the many healthcare professionals creating a will on the fly during these times. Started by looking at a DIY template that needs notification with two witnesses. Legal expertise is available and costs around $750-800 one time, plus 2% of assets as executor fees if the law firm becomes the executor.

 

Major decision points that I can see: who will the executor be, who do you leave the estate to and how, who will be the guardian for children (trying to keep guardian and executor separate), and how will the estate be transferred to (spouse or if spouse not surviving then to children - at what ages, in what proportions over time.

 

Questions:

Did you self-prepare or with a lawyer? What resources did you use for either?

What is the most important advice about do's and don'ts you have to share about this process?

If you saw a will be executed over time, what did you learn vicariously from that experience that you can share?

 

Edit: We live in Connecticut, US just for reference. Trying to learn and create this myself so that it can be updated every 3 years without recurring legal costs.

 

You should give this a try as well. These guys have raised some money over lat two years and have some good tools. You can do it online.

 

https://trustandwill.com/

 

Also for general info.

 

https://getyourshittogether.org/

 

 

 

 

 

 

[lnofeisone]

Dos: Avoid probate as much as you can. In other words, try to have your assets distributed without having to go to court.

Dos: If there are two individuals with equal standing (say two children: A and B) and you want to give 100% to child A, consider giving child B 1-10%. Child B can really impede the process by challenging the will, etc. The process will grind through the challenge (likely without any change) but the time and $ expense is just not worth it.

 

Don't: Don't find yourself in the situation where you have to go to Probate over simple stuff. Probate court is a sh*tshow that culminates in $ suck and timesuck. I've met exactly 0 lawyers that went to law school wanting to be probate attorneys/judges. It shows in the courtroom (I'm currently dealing with this in NY and very much frustrated by the process).

 

How does one avoid probate:

1) Assign beneficiaries to all of your accounts (most places will let you do % splits)

2) Joint account holders also bypass probate

 

Get an attorney if:

1) Got complicated assets?

2) Are you worried about asset protection?

3) Are you trying to navigate tax implications?

4) Want to designate how much your beneficiaries have access to and at what age?

 

Executor:

Banks and attorneys are expensive. Banks will take the most conservative approach even if they have discretion. For some reason, banks also have extra fees. Attorneys (in NY anyway) charge a % of the estate and that % goes down as value of the estate goes up.

If you choose a family member (e.g., a spouse), when the time comes, they can decline to be an executor. It introduces all sorts of fun to the process but the process will move forward with a lot more paperwork and time delays.

 

 

[DocSnowball]

Thank you all for sharing! Those are some great pieces of advice. Getting on my way with Quicken WillMaker from Costco online, and will engage an estate attorney one time to make them an executor if only children are surviving. I really appreciated the advice to reduce % paid to executing attorney as estate size goes up, makes a lot of sense.

[LC]

To echo lnofeisone's point:

 

The main objective is to avoid a conflict after you have passed, where beneficiaries are fighting amongst each other.

 

Therefore, perhaps an option is to inform everyone prior to your passing and address any conflicts while you are still around to make decisions.

[Read the Footnotes]

Dos: Avoid probate as much as you can. In other words, try to have your assets distributed without having to go to court.

Dos: If there are two individuals with equal standing (say two children: A and B) and you want to give 100% to child A, consider giving child B 1-10%. Child B can really impede the process by challenging the will, etc. The process will grind through the challenge (likely without any change) but the time and $ expense is just not worth it.

 

Don't: Don't find yourself in the situation where you have to go to Probate over simple stuff. Probate court is a sh*tshow that culminates in $ suck and timesuck. I've met exactly 0 lawyers that went to law school wanting to be probate attorneys/judges. It shows in the courtroom (I'm currently dealing with this in NY and very much frustrated by the process).

 

How does one avoid probate:

1) Assign beneficiaries to all of your accounts (most places will let you do % splits)

2) Joint account holders also bypass probate

 

Get an attorney if:

1) Got complicated assets?

2) Are you worried about asset protection?

3) Are you trying to navigate tax implications?

4) Want to designate how much your beneficiaries have access to and at what age?

 

Executor:

Banks and attorneys are expensive. Banks will take the most conservative approach even if they have discretion. For some reason, banks also have extra fees. Attorneys (in NY anyway) charge a % of the estate and that % goes down as value of the estate goes up.

If you choose a family member (e.g., a spouse), when the time comes, they can decline to be an executor. It introduces all sorts of fun to the process but the process will move forward with a lot more paperwork and time delays.

 

This is all good advice. I'd like to build on it.

 

I wanted to add a reminder of what is likely obvious that estate planning is local and there is jurisdictional variation by country, by state or region.

 

The best situation in the USA is to avoid probate to the extent that you basically don't need a will or that the will is only to clean up loose ends, to take care of any mistakes, or unforeseen issues, and for distribution of lower value assets, etc. Sophisticated planning avoids probate and can have the benefit or confidentiality, speed, cost savings, etc.

 

A bit of low hanging fruit is to realize that you can make things easier for survivors by being organized and clear in your records, so that is a bit of low cost, low hanging fruit. Another piece of low hanging low cost fruit for couples, is to think about how accounts and assets are held. As lnofeisone suggests, how you hold title, or who is named on accounts helps to pass easily to a surviving spouse. People quickly think of brokerage accounts and bank accounts, but real estate and cars should also be considered.

 

Making sure that there is a record of all accounts and passwords is also another low cost easily rectified situation.

 

Trusts, Partnerships, and LLCs can all be used to avoid probate in more complicated situations, but a bit of thoughtfulness in records and the titling of assets, and naming of beneficiaries can go a surprisingly long way especially if you assume there will be a surviving spouse.

 

I'd also like to suggest that trying everything including extreme measures to make sure there is a surviving spouse makes sense. Plus in many cases if you can protect one spouse, then that healthy spouse could serve as a healthy caretaker or advocate in the event of serious illness in the more at risk partner.

 

Best wishes for everyone on the front lines.

[Jurgis]

I'd also like to suggest that trying everything including extreme measures to make sure there is a surviving spouse makes sense. Plus in many cases if you can protect one spouse, then that healthy spouse could serve as a healthy caretaker or advocate in the event of serious illness in the more at risk partner.

 

Can you elaborate?

Do you mean not travel in the same car, plane? Sleep in separate houses during pandemic?

 

Just curious.  8)

[gfp]

Sadly, I've had two friends die in the last year that both had real shit-shows with their estate settlement.

 

One appointed his long time accountant as executor, who promptly cut off his long time girlfriend's health insurance and basically kicked her out of their house immediately.  The cold letters put everyone off and destroyed any hope for cooperation.  Additionally, one of the 4 sons - each of whom was made an equal voting member / heir - had been diagnosed as schizophrenic and was spiraling out of control.  But nothing had been updated in the will to account for this, so the schizophrenic is just as involved as the other brothers in making decisions.  Lastly, the deceased had been misrepresenting his wealth to family and girlfriend - basically spending 100% of a very high income with near zero assets / savings - which led to the heirs making life decisions thinking they had a wealthy father when it turned out they stood to inherit relatively little.

 

The second person died in a car crash simultaneously with his second wife.  There were numerous conflicts between the prenuptial agreement, the husband's will, and the wife's will.  There was a separate executor for husband and wife.  Wife's executor tried to claim husband pre-deceased wife by seconds (impossible to prove but one was declared dead minutes before the other) - thus triggering clauses where wife instantly inherited everything before being declared dead herself (this will not hold up in court but poisons the well of cooperation). 

One lesson learned the hard way on this one is: Don't let your regular corporate lawyer who does typical business work for you draw up pre-nups and wills if that is not what they normally do.  It was amateur hour and will probably involve courts for some time.  Lots of potential to destroy relationships between surviving step-siblings, etc...

 

Likely none of these issues apply to you, but just wanted to pass along some stories of all the ways the best laid plans can go awry. 

[oddballstocks]

Another story, have a friend who is a lawyer whose father passed unexpectedly.  There was no will, a partial divorce, girlfriend, kids etc.

 

I want to say the estate is still open five or six years later and my buddy said this is just a constant drag on his time.  He's been in and out of court trying to clean things up, but there are so many catch-22 situations that take months to resolve, it's just a big mess.  It's not even a sizable estate, his father owned a single commercial building and had little in the way of assets.

 

Since it was his own father and he has the expertise to do this there are no billable hours, just mental anguish and time taken from other things he could be doing.

[SharperDingaan]

Another story, have a friend who is a lawyer whose father passed unexpectedly.  There was no will, a partial divorce, girlfriend, kids etc.

 

I want to say the estate is still open five or six years later and my buddy said this is just a constant drag on his time.  He's been in and out of court trying to clean things up, but there are so many catch-22 situations that take months to resolve, it's just a big mess.  It's not even a sizable estate, his father owned a single commercial building and had little in the way of assets.

 

Since it was his own father and he has the expertise to do this there are no billable hours, just mental anguish and time taken from other things he could be doing.

 

This is why you pay up for a professional accountant, and attorney to set up your will, and a bank to execute it. You will only be paying executor fees on anything in probate (accountants job to minimize), and the money will go where intended (attorneys job to ensure). There is a reason why a dentist doesn't do his or his neighbors teeth, and it is the same reason that beneficiaries should have no involvement in the distribution process (bank as the executor job).

 

Yes it's expensive, so it putting you in a box.

You get what you pay for, and this is a dumb time to be cheap.

 

SD