Do you have a will?

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.

Wife’s an estate attorney.

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.

My will is to see my daughter as an responsible adult with values. That s the best heritage she may have

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.

If you put chocolate chip cookies in front of my face, you’ll see I have no will. :wink:

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.

Has anyone here used any sort of pre-lawyer checklist or flow chart to help prepare?

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.