My husband and I made wills using LegalZoom. It served the purpose perfectly for us. We have one child; he has no siblings (or parents, now); and I have one sibling and a mom. I can’t imagine there will be much to argue about, and, now that our daughter is no longer a minor, there aren’t any custody issues to worry about. Basically, if my husband dies, I get everything; if I die, he gets everything; and if we both die, our daughter gets everything. That’s probably what would have happened to our assets even without a will, but it was helpful in letting us outline how we’d like to die, and what we’d like to happen to our bodies afterwards.
We made and signed (and had witnessed) several copies, gave one to my mom, one to my brother-in-law (an attorney), and put one in our safe. Cost was less than a few hundred bucks. (We live in PA, U.S.A.)
This wasn’t nearly that simple, and didn’t actually involve an estate.
My father’s trust was to be split evenly between me and my brother. He wrote it so that it stayed in force until his second wife died, since she was supposed to get some of the income, but none of the inheritance. Useless, since she was far richer than he was, but it was hard enough to keep her from screwing up the trust.
My brother died not long before my step mother did, so I inherited everything. However before he died he told me that he wanted for his ex-wife to get his share. (This was about the most amicable divorce in history.) So, to follow his wish, I had to give her that share as a gift.
It wasn’t that much, and could be done with four gifts (my wife and I) over two years.
Right, but the point is that giving a gift while you are alive does not have any additional tax liability above giving it when you are dead (as inheritance) unless your total estate at the time of your death (plus gifts) will exceed $11.2M. And it did involve an estate - it involved your estate (you owned the assets at the time they were given, as I’m reading the story). You could have written one check, filled out the form, and been done with it.
The one caveat is the step-up basis. Giving your heirs assets while you are alive that have appreciated significantly is much worse for them than giving them when you die. They will pay larger capital gains when they sell that asset if they receive it as a gift than as an inheritance.
I’m not following you. It was in my estate in the trivial sense that everything I own which isn’t in the trust is in my estate. That it came from my father’s estate was irrelevant since I now had the money. I suppose I could have written one check, but then there would be gift tax on it, unless there is some magic way of avoiding gift tax I’m not aware of.
If you give under the exclusion amount ($15K per recipient in 2020, and it’s also per person so you and your wife could each give $15K to each recipient) in a particular year, you don’t need to do anything. That’s the annual exclusion. If you give more ( say you give someone $100K ) you file a gift tax return. But you don’t pay any gift taxes if it’s only that one gift - the extra just counts against your lifetime exemption of $11.4 million. ( and your wife has her own exemption). The gift tax return essentially keeps track of the lifetime exemption.
doreen already said it clearly, but there is not really such a thing as “gift tax”. Any gift over $15k has to be reported by the giver, but neither the giver nor the receiver has to pay any tax on it. You just have to reduce your exemption by the excess (so if you gave $16k your exemption at death is reduced by $1k).
There may be other reasons not to do a pre-death gift (basis being the large one I’m aware of) but estate/gift tax is rarely one.
Online wills vary wildly in quality. All 50 US states, DC, VI, etc., have different laws. Any given online will may or may not be fully applicable to the wrinkles in your state. And may be obsolete or low-quality BS to begin with. The only person who can legitimately determine how good / bad / fitting an online will is to your situation is an attorney or paralegal. Said another way, the one person who can’t tell … is you.
The simpler your situation the better the odds are an online form will suffice. You’re married and childless and want it all to go to your wife? Easy peasy; that’s very hard to screw up. You and she have kids, step-kids, special needs kids, extended family, etc.? You’re of vastly different ages? Have lots of money, foreign assets, real estate, etc.? Have a dysfunctional family prone to fighting? Bigger deals, all of them.
One of the values of an attorney (or lesser legal service) is to help you thoroughly explore what you do own, how it will be taxed, and to who you want it distributed under what circumstances. There’s a LOT more involved in a full estate plan than just a will. What happens if you and wife die in a common accident? Who gets what and who takes care of your minor children? Who’s empowered to take action to close out your affairs?
If you have a stroke and are permanently mentally incompetent, who will speak on your behalf as to living arrangements? As to medical care? What instructions will you have written down first for their guidance as to your wishes in this situation? All the same questions need answers for your wife. Both for when you’re there and capable, and for when you’re not.
Most folks suck at thinking about this stuff. Getting some help greatly reduces the odds of making a gross error.
My wife’s second job is as a house attorney for many small town banks. Not a week goes by we aren’t handed a problem where some family has suffered a tragedy and they’d failed to plan, or had planned badly or incompletely, for the scenario they are now in. And they’re trying to limp along as best they can using the money in our client bank. All to often we have to advise the bank to lock the account, sequester the funds and await court guidance a year from now. Because as a matter of law we can’t let the family do what appears to be the right thing.
Conversely, not a week goes by we don’t thwart an effort by somebody, usually a niece / nephew, to steal all of aging infirm aunt’s / uncle’s money. Usually facilitated by a power of attorney somebody got off a website.
Don’t be that guy.
Quality legal advice and quality estate prep is like quality insurance. It looks expensive until you need it. Then it turns out to be a hell of a bargain.
My Dad refused to do proper estate planning. His inaction pissed away nearly a million dollars in completely avoidable expenses and taxes and misdirected another $5M. Gee thanks Dad; you really shouldn’t have.
Don’t be that guy. Your kids deserve better than that.
I recently got a teeny tiny inheritance from a distant relative that nobody in my family knew or had even heard of. It basically pays for a phone that was stolen around the same time as the money came in (well, it hasn’t been paid yet, but we’ve got the settlement amounts).
Most people in the huge long list of people I’d never heard of got between two hundred and a few hundred; my siblings and I got less because my father had a lot of children - which is another story; an unexpected inheritance is one way to discover you have more siblings than you thought. For us it hasn’t caused any problems, but for some families, it could. So that might be worth bearing in mind - you could be causing issues within their families.
The entire estate was small, £85k after debts, fees, etc, and it was split among dozens of people. Even for the one person who got over £2k (before fees), it’s not a lifechanging amount.
If my Dad’s cousin had left that to one person, or a small charity, it would have made a real difference to them. If she’d even got one of those wills from the post office and filled it out properly, it would have been unlikely to have been challenged in court. She had no children, siblings, live-in partners, living parents or grandparents, so it wouldn’t have been a case of anyone being written out of the will.
I’m glad to get the tiny sum, but overall, it would have been better if it had gone to a charity where it could have made a real difference.
The drafts of our wills and our powers of attorney came yesterday. After we review them, we’ll make an appointment to sign them and hand the attorney another pile of money. And that will be that.
I don’t and I’m not sure what would change if I did have one. I’m an unmarried, childless 43-year-old woman who lives in New Hampshire. My parents are both dead and I have only one sibling. By default my brother would get everything, wouldn’t he?
Yes, the default disbursement in NH in your situation is to your only brother. You probably don’t need a will for that. Your brother will have to fill out some forms that say he’s your brother and that there isn’t any other family. But if your brother passes away, you might consider making a will since your estate would go to the state if there are no other relatives.
Depending on where you live, it may be take longer and be more expensive getting a court order to appoint an administrator and probate the estate vs. having a will. That being said, it would be his money (from your estate) paying the lawyer instead of you.
Yes. Being more a computer guy than a law guy, I drew up a flow-chart, covering all the possibilities of my family pre-deceasing me, and gave that to the lawyer. He had a little trouble following it – a law guy, not a computer guy! But both professions treasure logic and the flow-chart was the basis for my will. It’s all nice and modular, so I don’t need to update it as events (tragically) unfold.
This is the story of my friend’s brother, who did NOT have a will…it’s an ongoing nightmare.
Brother calls his children in to a meeting after work, and he is killed by a drunk driver on the way.
The reason he called the family home, was to tell them that he had an illegitimate daughter who he had just found out about, that he wanted to introduce to the family, She is not the same illegitimate daughter from high school who does not know he’s her father. Got that? Two illegitimate daughters, both adults.
He is living with his girlfriend, and separated from his wife for over 3 years. His wife appears to have login privileges to his investment accounts. While his son knows he had investments, but not the name of the company. It’s probable that the wife can’t withdraw or claim the investments since the investment companies are fussy about withdrawing money after a death without a death certificate. The bank account is in his name, but it’s a joint account, so his girlfriend is paying the mortgage on the house all the kids live in from what’s in the account. That means it’s a joint account with rights of receivership.
Since there’s no will the eldest son has to go to probate court to be selected as the executor. 5 months after the death that has not happened.
The wife (3 year separation remember) claims she should be the executor and get everything (none of the children are hers) since she’s wife #3. The wife also is claiming his life insurance from his job since he never updated it after the separation. Now after a 3 year separation, the probate court reportedly acts like the wife is divorced (this is a little uncertain since I don’t live in that state) for inheritance laws.
Also, the two former girlfriends who are mother’s of the 2 illegitimate daughters are laying claim to the estate on behalf of the girls. (The girls are adults so I doubt the mother’s can pull it off–the Daughters will have to do it)
So 2 illegitimate daughters, 3 adult children who live in the family home, a girlfriend too. A separated wife who’s trying to claim the estate. Investment funds unlocated. The life insurance is not updated (I think the wife may win this one). And a probate court is going to have more lawyers on Zoom than you can shake a stick at. And to tell the truth, I think I left out some stuff.
I can’t speak to NH law specifically. And all this stuff varies by state law. But there are some common themes that most states implement plus/minus minor variations is terminology or threshold amounts.
In your situation there are a bunch of low-cost things you can still do to make your bro’s life easier after your demise. If you own any real estate or any investment accounts you can arrange for them to pass outside of probate. That avoids delays and expenses.
For real estate there’s a thing generally called a beneficiary deed or a transfer on death deed. In a nutshell the property owner fills it out, records it at the local county recorder/courthouse, and it sits there doing nothing until the owner dies. At which point it becomes active and viola! The other person owns the property that afternoon. It’s 100% yours until it’s 100% his. And you can change or revoke these arrangements without his approval, so nothing is irrevocable until you die.
For financial accounts of all kinds, from checking & savings, to investments, to IRAs & 401Ks there’s a similar concept commonly called transfer on death (“TOD”) or pay on death (“POD”). Same idea. You fill out a form with the bank, investment firm, whatever designating who gets the money. One person or many. You maintain 100% ownership and control while alive but it instantly goes to them once you’re dead.
Done thoroughly, that leaves your legal “estate” to pretty much be your car and your personal effects inside your home. In most states there is a vastly simplified, shortened, and cheapened procedure for handling “small estates”. The definition of “small” varies by state, but numbers in the $25K to $50K bracket are common. People with 7- and 8-figure net worths can whittle their legal estate down to “small” just using nil-cost POD/TOD orders.
One thing NOT to do is put your bro as a co-owner or co-signer on your accounts. No matter how good your relationship, that invites trouble later.
Small estate or not, it’s still smart to have a will simply to name your executor. By designating your brother as executor, you avoid the need for him to approach the court to ask to be appointed, have them conduct a search for anyone else, then eventually agree to do what you & he wanted anyhow. just 6 months and a couple grand later. Don’t leave an unkempt bucket of crap for him to clean up any more than necessary.
Beyond a will there’s the other issues I mentioned upthread:
As a single person you’re especially vulnerable to disability, whether sudden after a car crash or stroke or creeping due to disease, senility, or simple old age. Not that you’re more likely to have these things happen, but absent a capable spouse living with you, your life situation degrades farther faster for the same disability than a married couple’s would.
Having written plans for who will do what if it becomes necessary will be hugely helpful to their state of mind and to your medical care at a time when it matters most to you. Do both you and he the favor of planning for this.
And of course everything I said for you applies to him as well. If he’s single and childless he should be doing these tings so you don’t end up dealing with his unkempt bucket o crap when he passes.
Even if he has wife, kids, and all the rest it’s still valuable for you to know a) that he has a plan, and b) at least generally what it is. Many folks are prickly about financial privacy beyond the point where it’s actually helpful. Frank discussions about uncomfortable topics before there’s a crisis are hugely beneficial. He (and his putative wife) knowing your plans is also important.
Oh, yes. Insurance plans, IRAs, other retirement plans, bank accounts - if there’s a beneficiary listed, the beneficiary gets it. It is not part of the estate and does not go to court. It is critical to keep your beneficiaries updated.
There can be more than one beneficiary. Not sure about real estate. I know you can leave real estate to one POD, not sure if it can go to multiples.
