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Posted by joeNOSPAM@bea.com on June 10, 2008, 5:12 am
Hi all.
I got our portfolio by not spending money needlessly,
but I'm getting the idea that a holographic will isn't
going to be enough for protecting my family and
avoiding unnecessary taxes or probate. What are
the main financial benefits to me or my spouse or
kids for a more formal set of legal estate documents?
And what are cost-effective ways for getting them? I
bought a CD/plan from that woman on TV, but it
lasted for 15 minutes of reading and input until it
said I had too much in assets (> $600k). I am balking
(unless convinced) at $3000 or so for 15 minutes of
boiler-plate filling in by a lawyer.
Thanks,
Joe Weinstein
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Posted by on June 10, 2008, 7:45 am
> avoiding unnecessary taxes or probate. What are
> the main financial benefits to me or my spouse or
> kids for a more formal set of legal estate documents?
It depends on what your goals and assets are. If you
and your wife have enough assets that you'll be
triggering estate taxes, there are some things you
can do to minimize the impact of them (ie. a trust
in order to maximize the use of both spouses
exemptions), some things you can do which will help
minimize the impact of probate (ie. if you own
real estate in more than one state, unless that
real estate is held in a trust, your executor may
have to go to probate in each state in question), etc.
Similarly, if you want a separate trustee to watch
over assets your kids inherit while young, that may
require appropriate language or another trust as well.
(ie. if you died and left your kids $3million, do you
want them getting their hands on all of that money
at once at 18?)
So really, nobody can tell you if it make sense unless
they know a lot more about your situation and your
goals.
> said I had too much in assets (> $600k). I am balking
> (unless convinced) at $3000 or so for 15 minutes of
> boiler-plate filling in by a lawyer.
If your plans and assets are such that a simple will
alone will work, a lawyer may be able to boilerplate-fill
it for you for as little as $100 or $200. Have you
actually *talked* to a lawyer?
If you need several trusts, and two wills (usually separate
ones for each spouse), and you want to make sure you have
other things in order - health-care proxy, living will,
durable power of attorney, etc - yes, it all might add up
to two or three thousand dollars - but some of the things
that a lawyer can structure for you (especially that A/B
trust and ILITs for example) can save your estate hundreds
of thousands of dollars or more down the line.
Bear in mind that your estate may, in fact, be a lot
larger than your current assets. If you have life
insurance on each spouse with the other spouse as
the beneficiary, real estate which is getting paid
down, 401k plans, etc - all of that adds up fast and
bear in mind that in all likelihood, your estate isn't
going to be what you have now, but rather what you
will have some number of years down the road.
Most estate attorneys will be happy to talk to you
at no charge in order to see if your situation warrants
the full blown collection of trusts, etc or if a simple
will is all you need. And if the latter, again, the
charge shouldn't be more than a couple of hundred bucks.
Though you might seriously consider some of the other
non-financial documents and the value they may add, too.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
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Posted by Mark Bole on June 10, 2008, 11:28 am
BreadWithSpam@fractious.net wrote:
>
>> avoiding unnecessary taxes or probate. What are
>> the main financial benefits to me or my spouse or
>> kids for a more formal set of legal estate documents?
[...]
> If you need several trusts, and two wills (usually separate
> ones for each spouse), and you want to make sure you have
> other things in order - health-care proxy, living will,
> durable power of attorney, etc -
Not just "usually separate" -- there's no such thing as a joint will
(but I suspect Bread knows that).
Joe... not sure if you remember, but we traded occasional posts over in
the Oracle newsgroups in years past, and now Oracle is your new employer
(having bought BEA -- you *are* posting with a work mail address, after
all).
California is community property state (stepped up basis on inherited
assets from spouse) and last time I checked has no estate tax. You also
stated you have kids, I'm guessing they're at or near college age by
now, meaning they will not be minors much longer.
Here's my take: the worst possible scenario is both your wife and you
dying simultaneously and unexpectedly, say a car crash. Much more
likely are the following: you will both live a long time from now, or
only one of you will die prematurely, and if due to a health problem,
there would be some advance warning. Or, only one of you will become
incapacitated. These scenarios would give you time to set up something
fancy if it seemed appropriate, assuming you set up the basics now.
So, I suggest you stick with the basics and get for you and your spouse:
1) health care power of attorney ("living will")
2) springing durable power of attorney for each other
3) basic living trust, specifying at what age(s) your child(ren) might
receive distributions.
4) pour-over will
Shop around, but I'd be surprised if you couldn't get all this for
$2,000 or less, and you shouldn't need to do anything further for
another ten or twenty years unless your situation changes drastically,
so on an annual basis the cost is pretty small. And you should
definitely expect an hour or two of the lawyer's time to be included!
You asked, what are the financial benefits? I'd say mostly the benefits
are indirect, in that you or your spouse would be able to manage things
with very little extra cost in the future (in other words, you're paying
something now to save a lot more in the future). You also asked, what
are the cost-effective ways of setting this up? Since this is something
you may only do once or twice in your life, I'd say it's not a
do-it-yourself project, and even though the lawyer may seem expensive,
it's probably worth it.
-Mark Bole
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Posted by joeDOTweinsteinATgmailDOTcom on June 10, 2008, 12:38 pm
Hi Mark, thanks (changed the hinting-at-work-address).
Thanks all for the advice.
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
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Posted by on June 10, 2008, 1:04 pm
> BreadWithSpam@fractious.net wrote:
> > If you need several trusts, and two wills (usually separate
> > ones for each spouse), and you want to make sure you have
>
> Not just "usually separate" -- there's no such thing as a joint will
> (but I suspect Bread knows that).
Actually, there is, but nobody really uses them. Google
for "Joint will" or "mutual will".
> So, I suggest you stick with the basics and get for you and your spouse:
> 1) health care power of attorney ("living will")
> 2) springing durable power of attorney for each other
> 3) basic living trust, specifying at what age(s) your child(ren) might
> receive distributions.
> 4) pour-over will
>
> Shop around, but I'd be surprised if you couldn't get all this for
> $2,000 or less, and you shouldn't need to do anything further for
> another ten or twenty years unless your situation changes drastically,
And any decent estate attorney should recommend all of
those documents anyway. Definitely should come out to
less than $2000, especially without ILITs. Much of this
stuff is state-specific and I'd be wary of any off-the-shelf
packages for anything but the most simple will.
Oh, while we're at it, do check the way your various
investment accounts are set up. You'll need to know
what's your, what's your spouse's, what's jointly
held, etc. And in many cases, accounts (especially
retirement accounts like 401ks and IRAs) have
designated beneficiaries already set up. Note that
such designated beneficiaries (a) avoid probate; and
(b) override your will. This may be good or bad -
it's convenient, certainly - but you'll want to take
this all into consideration when you set up the wills.
Lastly, note that life insurance proceeds may or
may not be part of your estate depending on who is
the *owner* and who is the beneficiary of the policy.
This is the time to review that stuff, too.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
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