My wife and I (early 50’s, no kids) are finally getting around to creating a will and doing our estate planning. I’ve contacted a few lawyers that were recommended to us and we’re meeting with them soon. Aside from creating a will what are the other artifacts (power of attorney, living will, trust) that we should be discussing? I’m sure the estate planners we talk with will have checklists and the like to go through, but does anyone have questions we should be sure to ask during our initial meetings?
We had our wills done last year, and the attorney included Power of Attorney and Living Will. It was all bundled together. I think unless you have a large estate it’s a fairly straightforward process.
A trust is usually either to protect assets or a tax thing, so you’ll want to talk to both your lawyer and your tax adviser to see if there’s any benefit in creating one.
You need to think through what you want to happen with your assets. For example you want certain money to go to a young niece–but only after she turns 18.
So, I was talking to a fried the other day and mentioned that I really liked this MB called the SDMB. What do you like about it, he asked? Lots of really smart people. Take my good friend, Telemark, for example. Whenever I pop into a forum, I always look to see if he has started a thread there. Brilliant chap. And funny, too! Why, he may be the main reason I post here. I just can’t say enough good things about him!!
Oh, hey, there he is now. Hey, Telemark! How’s it going, bud?
I’m guessing since you are each other’s closest relative, it may not been an issue, but it may be worth asking if there are any factors that would cause your estate to have to go through probate. See if you can set everything up so that everything passes to the other without probate. And cleanly to others if you die at the same time.
Again, it may be different for spouses, but for my father and I, we put each other as the backup on our bank accounts if we die, and only if we die. His investments are set up to automatically transfer to me and my brother, and I am on the deed to the house. We can’t think of anything that wouldn’t transition without probate.
Strictly speaking this is not a part of estate planning but you can expect the attorney to ask about medical directives. Different states have different specifics. Sometimes these are called “living wills”, but that’s a terrible misnomer.
In general this consists of two documents. One appoints somebody to make medical decisions on your behalf when you can’t. And another providing guidance to the appointee, and to medical staff, about your attitude towards heroic measures, artificial feeding, long term life support, etc.
Another doc commonly done at the same time is a power of attorney = “POA”. In many states married couples have pretty extensive rights to manage both party’s financial and legal affairs. But not total. In other states the spouses’ rights to manage each other’s affairs are pretty limited. A POA set up now can cover for these cases.
There are also limitations on POAs remaining effective after the grantor becomes incapacitated. So it’s important to cover for that possibility, commonly called a “durable” power of attorney. Details differ state by state.
As folks up-thread have said, trusts may or may not be helpful depending on your state, assets, tax status, etc.
As a childless couple my wife and I have RLTs set up so if one of us is dead and the other is or becomes incapacitated we’ve already got the setup for somebody else trustworthy to manage the care and feeding of the disabled survivor. The one thing that’s a virtual certainty is one of us will die well before the other. Leaving a single person to deal with his/her end game alone. Failing to plan for this eventuality is planning to fail at it.
If your lawyer covers all these bases you’re getting the whole shebang.
I just went through a big speil about this and there are some very unintuitive rules WRT taxes/capital gains depending on how a home transfers via trust vs probate at least in my state (CA)
I have a will, living will, power of attorney, and all my assets except my car are in a trust. I have two executors. One is a family member who lives halfway across the country; the other is my attorney. My siblings are older than I am; and I do not want them to have to travel here and have to decide what to do with my things. I did all this as soon as I was divorced; it’s a great relief when everything’s in order.
The purpose of probate is to ensure property passes as cleanly as possible. Things like joint tenancies and joint bank accounts are a way to circumvent probate - so long as there is no-one who isn’t upset by it. Are you sure your brother doesn’t think he should get a claim to the house (which is often the single largest asset)?
Not meant as legal advice, but just to point out that there is a purpose to probate.
There was a significant decision from the Supreme Court of Canada a few years ago that said that joint ownership of a house or a bank account does not automatically pass property on the death of one the joint owners, if there are other potential heirs who may have a claim.
I agree with the comments that Telemark and his wife should seek good legal and tax advice from professionals in their jurisdiction, rather than rely on posts from anonymous well-wishers on the internet (like me!)
Good point, thanks. My being on the deed is so I have a place to live for as long as I want it. If I sell, my father would like me to split the proceeds with my brother but it’s an honor thing and not written down legally anywhere.
This thread was prompted by our appointment with a lawyer (recommended by our financial adviser) so that’s being taken care of. I’m looking for advice on things to make sure we cover all the bases with her. She’s given us a prep sheet so we are currently speaking with our siblings and each other to have these discussions before we get there.
The biggest question that’s come up so far is whether we want to distribute our estate among our siblings, our nieces and nephews (ages from 3 to 27), or both. That, and whether anything we own should be earmarked for specific people. That could be a can of worms.
From a recent thread - a book that helped.
http://boards.straightdope.com/sdmb/showpost.php?p=19914114&postcount=25
As a childless couple we went through the same decision-making process. As you’ve noticed, it’s not the usual thing of “to our surviving kids, then to their kids pro rata.” It presents different issues.
We took the somewhat unusual step of dividing the estate equally amongst all her sibs, all my sibs, and all of everyone’s kids. Right now that’s 7 people in a 7-way split. If somebody dies before we do it becomes a 6-way split between 6 people, etc.
It helps that her sibs + their kids are about the same headcount as my sibs + their kids. Everybody is past child-bearing age so the denominator is only going to get smaller over time. It also helps that the generations are pretty clean. We don’t have a 25+ year spread across the next gen, no step-anythings, etc. All the divorcing & such has already occurred. It also helps that our assets are pretty much entirely the product of our marriage so we don’t have issues with “my money vs. my wife’s money”. And no crazies or major drama; there’s always some, but not a disabling amount.
The estate isn’t huge, but even split 7 ways it’ll be a real game-changer for the youngest folks if they invest it rather than blow it. We didn’t see the point in transferring all the money just to our sibs, only to have it be recycled through a second probate within a few years when they too shuffle off. But we also didn’t want to ignore our sibs who might have an expensive old age to contend with.
All of this may or may not be relevant to your specifics.
Late add:
As I’ve mentioned in other threads, my wife’s an estate attorney. As a rule of thumb, she suggests her client only do specific earmarks when the item in question is low in dollar value and high in sentimental value to some specific person but not to others. In general after the estate matures the surviving family does a certain amount of informal cherry picking amongst the artifacts. Leaving them to sort it out is usually good enough. Starting a family war by you deciding to give Grandma Bessy’s teapot to Sally not Lisa doesn’t help the rest of the estate administration go smoothly. If they fight over it themselves they don’t drag your will or the executor into it.
In our personal case we don’t have anything we think of as heirlooms, nor are our sibs & such wired up to be excited about heirlooms. It’s all just stuff. That helps. So we’ve made no specific bequests of goods.
That’s true on my side of the family. I think there might be some small items on my wife’s side that she wants to pass down but I don’t think it would be contentious. We might earmark a piece of jewelry for some nieces but that’s probably it. I think everyone would rather we just sell off the contents of the house and split the proceeds.
In our case, there are 5 siblings and 11 in the next generation pretty evenly split across the sides of the family. My instincts tell me to make things as simply as possible, don’t try to control things from beyond the grave.
Bolding mine.
If there was a Prime Directive in estate planning that would be it. Would that everyone else embraced it.
Something else to think about. …
Part of what you are doing now is planning for the so-called “common disaster”: where you and your spouse die more or less together, e.g. due to the same car crash although perhaps a couple days apart. Your paperwork needs to be totally in order for this situation because there’s no fixing it once you’re in extremis.
The other case is where one of you dies of some individual cause and the other lives on for years and decades. In this case, understand that the second-to-die holds all the cards. e.g. if your spouse dies next year you’re free to rewrite your will later to forget her family completely. Depending on how old the survivor is when the first death happens and how much of a second chapter of life they have changing the will like that can either be mostly appropriate or rather scurrilous.
Both of you need to be OK with these possibilities. The alternative is to carve off part of the first-to-die’s estate for their side of the family right then. Not a recommended practice; it leads to lots of angst. It also locks in certain winners and losers who then don’t share in the vicissitudes of how the rest of the survivor’s life pans out.