OT: Estate planning

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TMF does have an Estate Planning board with experts who generously share their advice.

I’m posting off-topic on METAR since my buddies are here and besides there’s no point preaching to the choir.

The WSJ published an article today on the problems that can result from dying without a will (intestate). Without a will or trust, you’re giving up the opportunity to say who will administer your estate, who will be a guardian for minor children, and who will get what. Dying intestate can have unintended consequences for pretty much every family type, but it is especially painful if there are unmarried partners or stepchildren, who are left out under the law in almost every scenario.

The 5 basic estate documents are: a will, a trust (if you have significant assets), durable power of attorney, health care power of attorney and living will.

In my personal experience, a trust makes estate management simple for the trustee while assets in a will (which need to go through probate) are much more difficult.

I recently rewrote my trust to include a Credit Shelter Trust after learning that Washington State has high estate taxes with a much lower exclusion than the federal estate tax.

After reading several books on estate planning, I recommend " The Complete Book of Wills, Estates & Trusts (4th Edition): Advice That Can Save You Thousands of Dollars in Legal Fees and Taxes," by by Alexander A. Bove Jr. Esq. (Author), Melissa Langa Esq..

Don’t put this off. Life is long but life is short.

Wendy

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Cannot stress enough how important that is. Wife and I had one done primarily because we have a young daughter and were very concerned with whom might raise her if both of us were to die, as well as how (the mechanics of it all) she would get her inheritance. (for example, X% immediately, more at age 25, whatever the case may be).

I have two paper copies of all those documents. Both are in safes (not for theft prevention, but protection from fire and flood damage). The necessary people would know how to find those safes in the house if something were to happen. (for that matter, police would stumble upon them anyway).

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I finally had a will written, to stop my aunt’s nagging. Of course, that will is now obsolete, as my aunt, who would have been executrix, died a dozen years ago. I named her lawyer as successor executor, but discovered what a shyster he is when I had him run her estate through probate. I am confident he would give my estate the “Bleak House” treatment, eventually transferring every nickle of the estate into his pocket.

I have two cousins, who are both in much worse health than me, and irresponsible to boot.

Michigan has another little thing, passed by the Shiny elements: a court appointed conservator for disabled people. The way it works, quite often, is the conservator loots the person’s assets for personal enrichment.

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@steve203 read the book, “The Retirement Nightmare” and watch the TV movie, “I Care a Lot” for more details on this problem. One way to avoid it is to put all your assets into a trust with successor trustees and send a copy to your brokerage.

The problem of not having a successor trustee is tough. I am fortunate to have a “deep team” of smart, caring relatives to act as successor trustees. DH has a problem similar to yours. I’m obviously his successor trustee, but if I die before him he doesn’t have a trustworthy substitute.

Wendy

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Do you have some data for that?

DB2

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I don’t have any data, but it is a pretty well known risk. The executor of the estate can bill the estate for expenses. You can see the potential for abuse there.

@WendyBG thank you for bringing this up. I didn’t know what about WA State inheritance taxes. This is a timely topic, we’re meeting with an estate planning attorney next Thursday to set up our wills.

We’ve already made a list of all our financial accounts and real estate holdings and shared it how to access it with trusted friends and family members.

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After seeing the results of our Norther California firestorm a few years ago, where my BIL lost everything, I don’t put any faith in a firesafe being useful, other than knowing where stuff was, later… I hauled his safe to the local locksmith, vendor, and saw the yard where dozen of the similar safes had been taken, to be cut open. His, as well. What we found inside were globs of melted plants from the jewelry boxes, charred bits of had once been leather, and papers that were black, bottle, impossible to even move, recover. All they were able to recover was some of the jewelry, in this plastic globs, or loose… They sent it all to a connection in Los Angeles who managed to recover maybe half of the stones, gold, in fact the gold bits paid for the recovery services.

Problem was, that safe was in the midst of the home, stucco walls held in the heat for days, the home burned from the inside, so it was like an oven, glass art turned into a frothy glob, pottery cooked down, too… Indian art, pots, rugs, other collections, up in smoke…

We have a small safe, if there’s a need, we’ll scoop it all out, take it with… If we can’t, most likely it’s just gone…

Anyway, Bank/Credit Union vaults are safer, offsite, somewhere at least… No easy answers… Even large 6’ safes had been cooked in this fires…

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Although safety deposit boxes aren’t necessarily safe either. Just have to make a choice, I guess.

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Maybe we should do it (executor) for each other here on the board? I suppose it could only work well if in similar locations, etc.

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The problem is that trusted friends and family members often turn out to be the worst thieves. Having been the son of an estate planning attorney who was Commissioner of Accounts for our county for decades, he often dealt with ‘entitled’ children often take what they think they deserve.

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Proximity is certainly a factor. When my one surviving aunt rewrote her will a few years ago, she made me successor executor should her son Rick pre-decease her. She lives in North Carolina now. When she told the lawyer writing the will I lived in metro Detroit, the lawyer immediately said that was too far.

From time to time, I meet some friends, most of whom are anywhere from 10 to 30 years younger than I, for supper. The last couple years, I have been saying “I need to adopt one of you guys, so there will be someone to wipe the oatmeal off my chin in the nursing home”. I doubt they realize how serious I am.

Steve

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Cosigned. It is a definite risk. But if the worst happens somebody has to know how to access our accounts (and even be aware that the accounts exist). At the moment, they are just aware the accounts exist, since we don’t yet have a will. We’ll figure out how to pass off the access when we meet with the estate attorney.

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@syke6 since you live in WA State, take the time to Google and study “WA State Credit Shelter Trust” since there are several pages written by law firms with good info.

The problem with my old trust was that it was written with a bypass trust referring to federal estate tax. I paid a local lawyer to change the language to include state taxes and make it general in case we move later.

Here’s the key section:

Credit Shelter Trust

A.  The trustee shall hold as a separate Credit Shelter Trust, that portion of my estate equal to the smaller of (1) the amount of property which can pass free from federal estate tax pursuant to Section 2010 of the Internal Revenue code as it presently exists or as subsequently amended (applicable exclusion amount), or (2) the amount which can pass free from state estate tax of the state in which I am a resident on the date of my death. 

B. In funding the Credit Shelter Trust, the Trustee shall take into consideration all property in which I may have an interest, including property which passes to beneficiaries outside the terms of this Trust and dispositions which do not qualify for the marital deduction.  The Credit Shelter Trust shall be satisfied with assets valued as finally determined for estate tax purposes, the aggregate fair market value of which is fairly representative of the appreciation or depreciation in the estate.

The Credit Shelter Trust section is followed by a QTIP trust that holds any overflow.

Wendy

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If you are at home when a fire breaks out, GET OUT IMMEDIATELY and don’t stop to open your safe and scoop stuff out!

I keep a paper copy next to my desk, but I keep a copy in my safe deposit box, at my lawyer’s and also at my brokerage.

Wendy

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Good thread. YES, write your last W and T, and write it in such a way to make it easy (using codicils) to keep it current. Choose executors carefully and

  1. know that writing a Will is emotionally and ethically useful even if there are no significant assets

  2. Keep it as SIMPLE as possible

  3. Avoid trying to dictate from the grave what people do with what they inherit.

david fb

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The situation when my BIL lost there home was seemingly controlled, so they went to sleep, but were awakened by the light of the flames as the home next door burned… They had both battery & wired smoke/CO detectors, even the remote service, but since the fire had destroyed the wiring, and no power, they were all useless, the service company called after they were out and on the road, so, again, useless. No power meant the garage door opener wasn’t helpful, they did release it, got it up enough to get the car out and head down the hill through the embers, smoke, fire… They tried calling us, I had ignored it as just more late night spammers, so it wasn’t until they were banging on our front door at 3 AM, that we realized what was going on… It was several days before we had access to the property, we sifted through what we could, I did find one bronze art piece, but two others we never found. They managed to have it restored by the original artist… So much destroyed… Once a 2 story home, among many…

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IMG_06271920×1440 690 KB

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That looks terrible, really really terrible!!!

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Most of them are rated for some ~hot temperature for 15 or 30 minutes. So when a home is completely destroyed there is no chance of much inside not being destroyed.
Decades ago I had a software business and I kept all my master backups on floppy disks. I got a small safe to store them in but when I read the specs I also got a safe deposit box because I knew the floppies would melt quite quickly.
I still put important papers in the safe, just in case of a minor fire. But it is unlocked so I can grab them in a hurry.

Mike

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We, in our naiveté didn’t have a safe, and over the years had collected some nice bits of jewelry foe my DW. Well after retiring, we did more traveling, I never gave them much thought, so DW had tucked them away before we left home for somewhere, maybe an early Viking River cruise… Back home, she went to look for one of them, and discovered where she’d tucked them was empty… Sadly it was a spot up under the hall bath’s vanity… Well there was a small trash can just below it, and odds are the stuff had fallen in, and my weekly cleanup, never spotted them, and off they went to the landfill… Oops, we did find one velvet bag that had missed the trash, but I about took the vanity apart, looking, before giving up… I had no idea they were there, so thought to watch out for them… A tough loss, some were gifts from many years earlier… Anyway, that was really why we bought the safe, a central, known depository for valuable trinkets, and since those days, the fire dangers have become another reason, but grabbing, leaving is the most important choice… But photos, genealogy docs, cloud storage… But a go bag if needed…

But back to the original topic, we did a Living trust, many years ago, after my parents deaths, mostly to simplify, as well as direct how our assets will be distributed, and who will control these events… We’ve redone in since, a few years back, need to recheck, since the loss of our DD, but that should be OK…

DNR’s along the way… I still recall my mother’s last weeks, the final days were a mistake, no DNR, she had ALS, and in the process of moving her by ambulance from one rest home to another, she left us, in the ambulance, but, doing their job, they brought her back, and in the ICU for another month… Never should have happened… ALS is a terrible disease… Definitely needed a DNR…

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I’m not sure how many folks here are Fidelity customers, but this is a FREE service from Fidelity that folks can sign up for to securely and safely store their important documents and give access to those that would need them in the event of your demise.

For those that have Fidelity accounts, this seems like a useful and safe alternative to a safe deposit box held at a bank.

Hope this is helpful!
'38Packard

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