Wills, trusts and drama: What to expect when settling an estate
We all face times when we suddenly, necessarily have to become experts on a topic we’d previously given little consideration. Some, like pregnancy, accompany positive changes in our lives. Others, like dealing with funeral planning and estate issues, are entirely the opposite. Yet, there’s a pretty good chance you’ll have to deal with these issues eventually, one way or another.
I want to share what I’m learning as my family deals with estate issues — wills and trusts — to give you a preview of what to expect. I’ll add the usual disclaimer on a piece like this: I am not an estate attorney. That’s kind of the point — I’m just a person, one who knows a bit about personal finance, who has gotten thrown into the estate-settling process and has found myself frequently surprised and confounded.
My Dad’s Passing
My father died in March in Florida. He lived to be 79, an impressive accomplishment after surviving lung cancer 30 years earlier. In some ways, his passing was slow — although he survived cancer and avoided recurrences, he had lingering health issues that made him more reliant on oxygen tanks in the last years of his life. Still, he was surprised by the news in early March that he was terminal.
After that, his passing was, I guess you could say, fast.
My dad left behind four adult children and his wife, our stepmother.
He also — bless him — left behind what at the outset appears to be competently produced estate-planning documents: a will and a revocable trust. A bank is serving as the trustee, with a law firm representing the bank. So far, everything seems to be in order.
That doesn’t make it simple.
Stats on Inheritances
Last year, I wrote a piece for SavingsAccounts.com covering what to do with an inheritance. MetLife had released a survey that found that two-thirds of Baby Boomers may expect some type of inheritance over their lifetimes, with the average amount being $64,000 (a boon for headline writers who remember old game shows, as you can tell).
Of course, those numbers are buoyed by large windfalls from sizable estates. You may have heard in May about Prince William’s inheritance. He’ll get $16 million from his mother’s estate when he turns 30 on June 21st. An enviable amount, certainly, though — as with everything estate-related — tied up with all the negative emotions over loss.
Get Ready for Horror Stories
Earlier, I compared learning about the estate settlement process to discovering everything there is to know about pregnancy. Here’s an unpleasant reason why: You’ll hear other people’s horror stories constantly. Instead of birth horrors, it’s frustrated stories about delays. A coworker pointed to her older child, noting that the estate process had started when he was born — and, while everything recently was closed out, her son is now in grade school.
Even more worrying are the tales of family conflict. One friend told me about family members slipping into the deceased parent’s unmonitored house to remove the prized gun collection. (Yes, it’s Texas!)
It’s fair to say that when money and family meet, the strain will start to show. Immediately. And especially when combined with a significant loss. Estate probate really won’t be put on hold, which means you’ll be interacting with lawyers and signing heaven-knows-what while you’re still receiving condolence cards in the mail.
Keeping Your Own Counsel
One of the first choices you’ll be faced is whether to retain an attorney. In some cases, you really may have no choice, based on how complicated your situation is and the role you have to play. In others, you’ll walk the line that I do — knowing that it may be in my best interest to have my own representation, but struggling with affordability. It’s hard to prioritize paying (possibly optional) legal fees when my house needs repairs now.
Additionally, the estate laws vary from state to state, so an attorney in Texas probably won’t have expertise in Florida law. One lawyer I spoke with offered to help in the short term but indicated she’d refer me to a Florida attorney pretty quickly.
“You Want Me to Sign, What Now?”
The first communication my siblings and I received from the attorneys representing the trustee was an email letting us know to expect a waiver in the mail. If we signed the waiver, the message indicated, the process would go much faster. Mind you: The process wouldn’t start until we either signed or returned the unsigned waiver. So “ignore it and it’ll go away” wasn’t a valid choice.
The waiver was mercifully short for a legal document, and all the experienced folks I talked to indicated “it’s pretty standard.” But it had some worrisome language in it, binding us to agree, for example, not to contest the validity of the will in probate and to give up rights to formal service of documents.
In the end, I took the cheapskate’s way out: I talked to a friend of a friend, a local estate attorney who was willing to eyeball the document as a favor and give me a cursory recommendation. She had her own disclaimer about Florida estate laws being different from those in Texas (her area of expertise), but, after listening to my concerns, she agreed the language was unexpectedly broad and I had no compelling reason to sign it.
I opted not to sign.
Find Some Answers Online
In the meantime, I went online for basic information and definitions. You’ll find some good resources on the Web for basic information. Since my dad’s estate is in Florida, I read the Florida Bar Association’s consumer information on probate in Florida. It assuaged my concerns about how long the process was going to take — and, by “assuaged,” I mean it pretty much confirmed my coworker’s multiyear estimate.
What’s next? Reading the will — which turns out to be nothing like every movie scene you can imagine.
…to be continued…
Become A Money Boss And Join 15,000 Others
Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)
There are 74 comments to "Wills, trusts and drama: What to expect when settling an estate".
Honestly, I thought the whole thing went like it does in the movies. Everyone meets in a lawyers office and while s/he reads the will, everyone gasps in horror or cheers or whatever. And that’s it. Open and shut case. This post had an ominous ending! It’s not like the movies? Looking forward to the rest of the story!
One thing I’d add is that this process is going to be different for everyone. A lot of how the estate is settled depends on whether or not a will was written, and the existence of a surviving spouse can change a lot of things.
I got over my initial kneejerk “feh, pregnancy!” reaction and enjoyed this article. I look forward to reading the rest of your articles on this topic. Though I expect my father to live another 20+ years (well, don’t we all), he wants to sit down and talk about logistics soon. I don’t think either of us is looking forward to it, but I know it’ll make things easier if I’m a bit more prepared for the practical/legal aspects.
You Dad is doing a great thing for you. As I mentioned in my post below, my mother and father (mostly my mother as my father had health issues) took care of everything. My mother saw how her own sister struggled to gather up all the ‘important docs’ when her husband died and after helping her sister through it, she was determined to do it all for herself and my father. My Dad has always taken care of their savings/investing, so it was really quite a task to pull it all together.
It’s a huge undertaking, but so worth it. Your Dad is really giving you quite a gift. Good luck!
Thanks for posting. I’ll be curious to read the rest. My mother (widow) and father (deceased) did SUCH a good job with preparing themselves financially and legally (as well as downsizing when appropriate) that we children are extremely thankful.
My husband’s family did not. His mother was ill with a terminal disease, but died suddenly about 6 months to a year before expected. His father is of diminished capacity and one sibling is nearby and has taken control of all things. Four years later and things are literally a mess. One sibling has taken legal action to protect his father’s well being and finances. What they are learning is troubling. The ‘nearby sibling’ took a large personal “business loan” that is slowly being paid back, and they also paid themselves a self-appointed 30k/year salary to take care of him (he lived in his own condo) until recently where he is getting outside help (due to issues when he was alone). It’s a mess.
I think this is one area of personal finance that is totally misunderstood by many people, and one where emotions can truly be heightened for many reasons. Particularly with multiple siblings, second marriages, etc.
Looking forward to reading the rest of your story.
It’s true… You never know what to expect. A lot of estates these days are running into weird conflicts, squabbling between siblings, conflicts with inexperienced executors… attorneys that communicate poorly… all kinds of disagreements with estate planning outcomes and family members. In fact, from my experience, it’s rare to see a family that actually gets along well, and communicates beautifully, and so on.
Which, as the writer here says, causes a great many heirs to go ahead and hire their own estate lawyer on the side. Or as the writer here says, “Keeping your own counsel…” Well said. Estates need an experienced lawyer, going through probate. No one wants to do that themselves, without professional counsel. Too complex… Too exacting. But what many writers of these inheritance articles fail to mention is — one needs to trust that lawyer!
And so these days it’s true, one of the first key decisions estates are faced with is — not so much whether to retain an attorney or not, but for heirs to decide whether or not to retain their OWN personal lawyer, to protect their assets, or to watch out for a corrupt or incompetent executor… or an uncaring, uninvolved attorney. And so we see so many heirs now these days struggling with affordability, that’s true too. And that’s where a special benefit probate allows comes into play –borrowing against inheritance, getting a loan on inheritance… borrowing against our inheritance. If you get yourself a nice big inheritance advance soon after probate has been filed… after getting inheritance advance rates or inheritance loan fees or probate advance fees — you’ll be able to afford your own probate lawyer within a few days, you’ll feel a lot more confident all around; in fact it’s a super fast turnaround – you usually get your inheritance advance 72 hours after your inheritance loan or probate loan paperwork has been received by an established inheritance advance firm that has been providing large inheritance loans or probate loans, or modest inheritance cash advance funds, for decades. Inheritance advance loans or probate advance loans, estate loans or even small probate loan assignments from one of the more established inheritance advance or probate loan, inheritance advance, probate advance companies like http://www.myinheritancecash.com, or similar niche probate advance firms like the old Budget Finance company, for those who may remember, or maybe the original Inheritance Probate Purchase company, both in CA. And we can all get great research info from articles on sites like https://en.wikipedia.org/wiki/Probate_research, or http://www.quora.com. And nothing beats having your own probate attorney watching your back, when you are surrounded by people you can’t trust. Even in your own family. Blood thicker than water? You can forget about that these days! And just stick to a lawyer you can trust.
Emotions play a HUGE role in estate matters. It would benefit you to learn how to identify the personal conflict styles of your family members, so you know how to interact with them in a stressful situation like this. It will make things much smoother for you (and for them).
In Mediations, I’ve observed families argue over the smallest details in wills and other estate documents.
These arguments can quickly escalate into unresolved conflicts and, eventually, into grudges if left to fester.
I hope things work out well for your family.
This makes no sense. If there was a trust in place why are you having to go into probate? Please explain. It would also help if you gave some idea of the size of the estate and the relationship of the family members. Also, any idea why your father chose a bank to act as trustee?
A trust does not replace a will; you need both. (A trust mostly shelters some assets from taxes or reserves their use to specific people or activities.) A will has to be probated.
I am beginning the estate-planning process myself and would have appreciated specifics on exactly one aspect: how is probate initiated?
You almost always need a will to dispose of any property that was not placed in the trust prior to death. Often, trusts are written to be unfunded during life and are not funded until the will leaves everything to the trust upon the person’s death.
As for your second question about the bank, remember that your trust is only as good as the trustee carrying out its directions. A bank trustee will cost money, but will also ensure that your trust is followed to the letter. If you designate one of your children to act as trustee, you run the risk that your kids get together and decide to just bag the trust and divvy up the money now.
Ace, I would be interested in knowing why anyone would want to go through probate if they can avoid it with a trust. Another important point that I think is accurate (please correct me if I am wrong) is that anything probated is public information. I know that the laws in each state vary, but in North Carolina and California you can avoid probate if you put all of your assets into a trust. You would be surprised at how many people forget to transfer assets.
As regards the bank as a trustee, I have found that an expensive and frustrating experience. Bankers just don’t care as much as a family member. I would use this alternative only if there was no one in the family who could handle the responsibilities or if there was such friction amongst family members as to make this impossible.
The simplest answer to each of the issues raised in your post is, “it depends on the circumstances.” 🙂
To really answer your question about probate, one must understand that a trust is not a replacement for a will. They are different instruments designed to do different things. While you can often use a trust to accomplish the purposes of a will, it is not necessarily the best vehicle for doing so. So depending on what you are trying to accomplish and what your concerns are, there may be many reasons to have a will and go through probate, rather than have a trust.
And, as you pointed out, many times people simply forget to transfer their assets into a trust. If that happens, a will and probate are probably your only choice. If a home, for example, is titled in the name of the deceased alone, it will have to be disposed of through the courts in some fashion (whether by probating a will or by intestate succession). The deceased cannot sign a deed transferring the home to anyone or anything after the deceased has died.
Hmmm…my dads will has taken 5 months to probate 1 month in al and still in probate in NC. What is the deal!
Agree. There were too many extraneous details and anecdotal horror stories and very little of informational value. I don’t need to know about some random person stealing guns in Texas; did this happen with her family? Did she talk to the estate lawyer at all or research Florida estate laws? Such a missed opportunity to give readers good information from a practical standpoint.
I find it hard to start the conversation about wills with my parents and in-laws as death is a subject you never want to talk about with your nearest and dearest.
Yet I know if I don’t, I will have to sort out everything later on. My father-in-law is a hoarder, not quite as bad as the TLC series but 50% there.
One thing to discuss with parents/in-laws, if they have children with disabilities, is if they’ve put something in place specifically for those family members. I know where I live, if someone with a disability is left an inheritance, the state will claw back all of their disability benefits until the inheritance is spent. There are specific things that can be put in place, however, that allow someone with a disability to inherit money without this happening (it’s a specific type of trust… and setting it up requires having a lawyer who is familiar with these kinds of things).
That’s an excellent point. In a lot of cases, family resources have to be exhausted before government long-term-care or disability benefits will kick in.
Very good point. And it’s one of the things that my husband’s family is working thru, due to decisions made unilaterally and without input from the rest of the family and/or a qualified financial planner that specializes in this type of thing.
I think the biggest take away for me as a 1-step-removed from the family (as a daughter-in-law) is that no matter how awkward it may be to start having the difficult discussions, if your gut is telling you that you need to, or that something is amiss, you should absolutely act on it. Waiting only complicates things.
If a trustee is appointed can the beneficiary still become his/her own trustee
We had to specifically “disinherit” our granddaughter in our trust documents because of this. It felt awful, but it was necessary. Sadly, she died not that long after we finished our trust.
My annoyance is that some banks, like Smarty Pig, won’t let you put your account in the name of the trust. I should probably look into another targeted savings institution that will let me put the accounts into the name of the trust.
Hmm. I never know what to do with information like this. My father’s finances are a mess and he has no money, so I’m kind of assuming that I don’t need to worry about any of that.
My mother has some money but needs to keep working. I think her will leaves the house to her partner (they own jointly) and split everything in thirds. Do I need to know more?
My in-laws – cannot imagine trying to figure this out with them. We just had credit card companies calling us for their info because they’re overdue. If no one leaves us anything, do we need to worry about all this?
It sounds like you need to assume that your improvident relatives will be moving in with you at some point! Yikes.
Well, my dad is already essentially a ward of the state, I think, complete with legal requirement that he has a conservator. He’s a bit … scary so not ever going to live with us.
My in-laws are very clearly defined as not living here ever.
And I’m not worried about my mom. I am 99% sure that her partner will care for her. If my sisters and I needed to help, we’d split it.
If you are the executor of the estate and your parent(s)/in-laws die with debts, speaking strictly from practical experience here in MA (no legal background), you are expected to pay out any assets from the estate towards debts. You are not PERSONALLY responsible for debts. Creditors have to file a claim against the estate.
However…
In practice, what happened with us was when my dearly despised m-i-l finally died, she stiffed BoA for a princely sum (which IMHO they deserved as they had no business loaning that much money to an 83-year-old on SS – clearly they expected to get it from the sale of her house, but she had a reverse mortgage). Long and short of it is that they failed to file a claim in time and the probate judge threw it out. BoA promptly sold the debt to collectors and we have been harassed ever since. Thank God for caller ID, as we now never pick up the phone unless we recognize the phone number. We know how to deal with the legitimate collectors; the problem is that when they can’t collect, they pass the debt on to other collectors, and most of them try to skirt the law. So even 4 years after her death, we’re still dealing with trouble related to her. 🙁
The standard document that you are asked to sign is an Acknowledgement of Service. It states that you are receiving a copy of the Petition to Probate along with a copy of the Will. Yes, this is standard. By not signing, you are telling the court you prefer to be personally served by the sheriff’f office. Your choice- but if you are not contesting the validity of the Will then just sign. No hidden agenda. It’s the state’s form.
I’ve commented about our situation here before, and I am so very thankful for all that my parents have done to make this process go as easily as possible for my brother and me.
1. They had their trust(s) drawn up over 20 years ago, and after my mother died, it passed to my father, with relatively little to be done. He became the sole trustee at that point.
2. Every year they would update us on the status of any changes, review investments,etc.
3. Father’s house sold 2 years ago, and he’s now in assisted living. His Long Term Care insurance covers about 95% of his expenses currently. We’ve done the major downsizing, though he still likes to buy nice clothes when he goes shopping 🙂
4. I’ve spent considerable time with his files, know what he has for insurance, investments, etc. It’s all mapped out, so we know what to expect from those, along with SS, VA and pensions.
5. My brother and I are equal, co-trustees, and we talk about this as much as needed to stay on the same page.
I will be very sad when my father passes away, but I feel his estate is set up really well. He and my mother were very open about what they had, what we could expect to receive, and so there really shouldn’t be any surprises when the time comes. Above all, he doesn’t want my brother and me fighting. I think that’s the best gift you can give your children.
Sounds like the best one could hope for. And kudos for #5. The lack of openness between the ‘care taking’ sibling and the rest of my husband’s family has created a huge mess with my father in law and what is left of his life savings. No doubt the child that lives closest has carried more burden/responsibility, but there have been no check and balances. It was a recipe for disaster under most circumstances but with his failing health/dementia, it’s move into legal issues now.
Of course, both sides (my husband is currently Switzerland) claim the other person is out for the money.
Well, just wondered how often a parent disinherits 4 out of 5 children? My cranky father in WA state died at 92 and allowed our sister to control the last few years of his life. My father told an old friend of his that he was going to change our parent’s joint will (even though I thought that wasn’t allowed) at a time when my mother was in assisted living. My mother expressed her anger at the time to this same friend, with disinheriting 4 of her 5 children. She wanted all her children to inherit equally. He decided to disinherit 4 of us and leave all of it to our sister. We are talking about a substantial estate of $5 to 6 million. She avoided all her siblings during that time and would not talk to any of us. She was his Power of Attorney. Now she wants to appear as if this didn’t happen but so far she hasn’t disclosed the contents of the will and the trust. She wants to give us a token keepsake from our parent’s house but not a word has been said about the money and real estate. There is a new will and a trust and no disclosure of what is in it. Her attorney said to my brother “just wait …it may take several months..but the will and trust document may not ever have to be disclosed, depending upon what the trustee (the sister) decides to do.” Could he just want us NOT to contest the will/trust until it becomes too late to contest it? That is my thought. My father had dementia which included paranoia and suicidal thoughts after my mother died. It appears he had my sister arrange for a death with dignity –after she put our mother to her own death with dignity–but we can’t get her to tell us any details of his passing (or her passing). Her initial story of his massive heart attack while driving was proven to be false. Oh so much drama. While 4 of us were busy working (as none of us were retired) our never-employed sister went about the work of undue influencing our father, and now will have all of it. Is this fair? Is this right? If you are an attorney that understands joint wills in WA and would like to help us, please respond here ASAP.
I was thinking the same thing. All I walked away with is that sometimes things are complicated after someone dies.
My family and I are dealing with the probate process for a dear friend who recently passed. It’s horrible (he left a will with the belief everything transferred seamlessly under that – in California, it doesn’t). Perhaps the most disillusioning part of the process have been the ambulance chasing real estate agents/etc. who have solicited us by phone and mail.
The NOLO books have been extremely helpful although we did retain a lawyer (against my recommendation – in California, the court mandates a percentage of the estate for the attorney and law firms have cleverly drafted a contract which essentially makes this a retainer – they bill hourly for everything).
Lesson learned: put everything in a trust and make sure all beneficiaries on all accounts are in the trust name as well.
Here’s just one of the things I’ve learned since starting my estate-planning process. A 401(k) or 403(b) type retirement plan, in California, will default to spouse as beneficiary. If you are not married, do not have a will, and do not designate a beneficiary, the plan’s assets will be distributed by the state. So if you have a partner to whom you are not legally married in CA, for heaven’s sake, designate your beneficiary!
Here’s another. A non-401(k) type retirement plan e.g. an IRA does NOT default to spouse. That is, you don’t need your spouse’s consent to leave the asset to somebody else. That means a spouse can exclude such an asset from his/her estate, potentially without anyone in the family knowing about it.
Since the four most common assets involved in an estate are a) real estate, b) life insurance, c) employer retirement plan, and d) private retirement plan, it really is necessary for people to understand these assets and how they are handled in estates.
I hope this is the first of MANY articles on estate-planning here at GRS.
Spare us the second hand stories about texans…..I moved from that state to another in the north and can assure you where I live now, often leaves me longing for the civility of the south. So again, come up with real experiences of your own, not second hand, unconfirmable gossip.
What I want to know is – how is this going to change YOUR estate planning? I hear so. very. little. about people who put get their estates in order (and then do the rest of us a favor and explain how they did it). I’d LOVE to hear more about that. I realize it probably varies from state to state, but surely some things are similar.
What is so wrong with a reference to something that happened to someone in Texas?
It seems the author may be in Texas and dealing with an estate in Florida. References to the two states in question point out that the laws differ state to state.
We have lived through three of our four parents’ passing.
First, if you are not the “close in distance” relative- do not moan over a salary for the one doing the care taking. The estate paid my bil $30,000 a year to do that for my mil. She was in an assisted care facility- but that did not mean that he said us oodles of $ by taking her to the doctor and doing her laundry. By visiting twice a week he found out things going wrong I the place. Unless you are willing to either move you loved one near you, or quit you job and move there, quite complaining! There is a heck of a lot more to do than you could ever imagine.
If you are the executor your legal bills and time can be paid for by the estate. The courts recognize that doing it on your own is not easy. Remind a seeing sib that they will get far less of it all taken to court- since the bills come out of the estate unless they win(which os more rare than you would think).
If you are left with nothing but bills-remember that you are not responsible for them even of you have to change your phone number!
Last, please make a will, assign an executor and a back up exectuor. Even if you go on line to Susie Orman and get something going ( and then take it to the bank to notorize your signature) it is better than the mess my bil (an attorney) left my sister….
I don’t disagree with any of what you’ve said. But there are right and wrong ways to handle this. First, you have to consider the size of the savings before you can just decide to pay yourself 30k/year. 30k/year is one thing if the savings is a million dollars, and it’s a totally different thing if it’s $150k.
The most important thing is to be open about how an elderly parent and their finances are being managed. You’re absolutely correct, if siblings don’t like the arrangement, they should step up. But it should be an open discussion, not 1 person with all of the burden and all of the control.
What happens if there is an execut. and back up one and the first exect. sells the house of your mom’s before she passes? He said the will is nul and void since there is no house there is nothing to split? My mother too was in a private assisted living but with what she had in her personal account and the sale of the house there is still $211,000.00. As she just passed 4 wks ago, where’s that money? I asked for n accounting and he refuses to give one because he says there is no thing to account for….what then???
Interesting, because I love the anecdotal portions of this and every post the most amidst all the drier facts, and found the “To Be Continued” irresistible.
Pleased and Intrigued.
J.D.
I hope that before you refused to sign the waiver, you at least asked to review the will and trust. Do you have reason to believe that you or anyone else will want to contest the estate? Does the trust appear, as far as you know, to inaccurately dictate your father’s wishes? If not, then you may have just exponentially increased the duration and cost of the estate settlement for no good reason.
The attorney you spoke with did you no favor. Of course the waiver was broadly drafted–it is attempting to avoid any contest. The point it, what do you care if it was broad if you have nothing to contest? (And more importantly, is the estate worth enough that you would spend likely $100,000 in legal costs contesting the estate if you did disagree with something?)
Waivers are not bad things. There is no harm in waiving a right that you don’t intend to exercise.
More disappointed than “unimpressed and annoyed” here. This site typically tries to give comprehensive stories, regardless of subject, and this article doesn’t meet that standard.
To give a bad comparison: this felt more like a book with the back ripped off than part one of a trilogy. There’s an introduction that references what to expect, but it doesn’t tell you that this will be a two (or more!) part article, and without that to me it implies that it’s going to cover the entire subject mentioned in the intro, not just the first few bits.
I’m interested in this story, but I have no idea when this writer will come back up in the audition process, so it falls flat. I’d prefer the story all at once, but if that’s not the case, I’d at least like to know when the next part is due to come out.
That said, I liked the tone of the story. It has good flow. I think once we see the other bits it will tie together very nicely.
Hopefully this doesn’t come off as extremely negative… it’s not meant that way.
I thought this was too choppy, actually. It felt like the author was told she had to include certain info, like the stats on inheritance.
I have a revocable trust and a will. I am not married, don’t have kids and probably never will, being age 55. My nearest relatives live 1200 miles away in a different state, so I wanted to make disposition of my assets as easy as I could for them. Also the smaller the amount of assest that has to be probated, the smaller court fees there will be as they are usually based on some percentage of the probated assets.
My will is called a pour-over will and says that any asset not already in my trust should go to my trust and be distributed according to the terms of the trust.
Not everything can be put into a trust. Like my personal possessions. I had an online checking account once that would not let me have the trust be the owner. I have a paper I-bond in my own name that is not in the trust. My electronic I-bonds are in the trust name. I have my condo and other bank accounts in trust name. I need to put a few taxable Vanguard accounts into my trust but have not gotten around to it. My Vanguard Roth IRA cannot be in a trust name for tax reasons, but I have the trust as beneficiary.
I used to have the trust as the beneficiary for my TSP (govt 401K) retirement money until my sister-in-law warned me that more money could be lost to taxes if I did it that way. My estate would have a whopping amount of tax-deferred money in it and the tax rate would be higher. So I changed the TSP beneficiaries to be various family members.
So with estate planning, you need to think about tax issues involving tax-deferred retirement accounts. Also need to keep track of all the various beneficiary forms you have filled out over the years and make sure they don’t conflict with your plans in the trust and/or will.
I also created within my revocable trust, two trusts for my minor niece and nephew, to whom I would leave some money.
Keep in mind here that assets with their own internal beneficiary designation (like a bank account, IRA, mutual fund account, etc.) do not pass through a will or a trust so long as you have a beneficiary designated. They pass automatically on their own. (Of course, you can leave them to your trust if you wish, and then they will be administered according to the terms of the trust. But if all you want to do is leave them to a relative, simply designate the relative as the beneficiary or co-owner of the account, and forget about it.)
Hopefully I won’t have to deal with settling an estate anytime soon. But I am intrigued by your ending (or lack of one…)
Jenna, “hoping” you won’t need to do this soon is exactly why you should begin the planning process now. Unfortunately, accidents happen. The more prepared you are, the less stressful and unexpected death will be. Good luck, and get started 🙂
“Hoping” more for my family. My parents are still pretty young and have a plan. I’m still in my 20s and have my beneficiary all set up.
Estate planning is all about control. If you want to control how your stuff is distributed, without question, create an estate plan with a qualified attorney. Otherwise, you will be a victim of circumstance and will lose control of how your money is handed down. Same goes for your parents, so just ask them if they want to control what happens to their money. Both of you should seek the advice you need and set up a plan… this will give your family the peace of mind they deserve.
My family is almost two years into a very similar process. Charles Dickens’ “Bleak House” springs to mind. I can’t wait to read more about your family’s experiences.
This is such a tough subject for families and it always seems to take most folks by surprise once it happens. Even though, as they say, the only inevitable things are death and taxes. (And both are clearly implicated here!)
Nice to see an article that tackles this tough subject from a lay perspective. Every situation will be VERY different (not just a little different) so it’s impossible to go into much detail, but it gives us a good jumping off point for our own personal research. Thanks!
The most loving thing my mother ever did for me was make sure I had all documents necessary before I actually needed them. Occasionally, she would hand me something and say, ‘Here, put this with the rest.’ When the time came, I had everything I could have ever needed: the name and phone number of her chosen attorney, will, passwords, account numbers, original insurance policies, powers of attorney, etc. She logically realized there was no reason to keep the originals herself because an emergency could come at any time and I’d need those documents ASAP. That ‘survival packet’ helped me when I needed it most and I’m grateful she loved me enough to help me through the hardest days I’ve ever known.
This sounds absolutely helllish. I am sorry. My parents like my little sisters more than me and I married an only child…maybe I can avoid this altogether…
I want to thank the writer for sharing her story and experience. I want to do right by my parents and in laws when the time comes, but the reality is I have very little control over they have chosen to set up their estates.
I think the writer’s experience is fairly common. Wills, trusts, probate can be rambly drawn out affairs that we are terrified of screwing up because we don’t know what’s coming next, mistakes are expensive and they’re always some insensitive lout in the bunch who’s deeply critical of how it all goes down.
As a reader I was suprised at how the writer chose to present this without any indication from the outset this piece would be in two parts. A longer piece would have been more satisfactory than a cliffhanger in this case as there was no indication of what is coming and why two parts are necessary. Wasn’t that the point? To give you a preview of what to expect?
I thought the piece would continue the next day and thought it was weird that there wasn’t an indication of when to expect the second part.
First to the author, my condolances, my remaining parent also passed this March. I have also heard, and seen, horror stories. Fortunately to date nothing approaching the horrors has occurred, but what has become obvious is that this is a slow process even for a fairly straight forward situation. I expected this based on my friend’s parents passing. It was weeks for the court to confirm my sibling as executor, before which we technically were not supposed to divide up any property (decisions were made though). It will be months to over a year before the primary asset (parent’s home) is likely sold and then another month or two before all the final paperwork is settled with the court. My sibling is getting more advice than they know what to do with, much of it exaggeration and a good chunk flat out BS. So be careful of what you hear and check it out before acting on it.
excellent advice.
Sorry about the Poster’s Loss.
I am the executor when the time comes and am 1st on the POA’s.
As things have happened, I ended up moving in with my Parents, I was in between jobs, can do my work over the ‘net and was in the process of moving. So my Dad approached me as to moving in and that he needed help. Dad is 92 and Mom is 89 and she is rated moderately to severe Alzheimer’s Dad had a Stroke in December that fortunately was classified as mild. Though he has cognitive problems that manifest themselves in short term memory problems.
I have one sibling, a younger sister.
They prepared their Wills, POA, Medical Instructions and such years ago and made periodic changes. While Mom was lucid we redid the POA’s to make sure they complied with current laws. We also took her out of the equation if Dad were to pass first. That is I would have POA and not have to go to court to establish Guardianship, which I understand can take up to 30 days and cost in our area up to $3,000.
Because of all this the POA was written to become active as soon as it was signed and while my Dad was in the Hospital I “activated” it. Since he is having some problems understanding his financial affairs he is gladly turning over the grunt work to me. What that means is that I am becoming more aware of all of the documents and instruments. We are also making some minor tweaks, like adding/changing beneficiaries now. On Stocks, Car, Insurance, Annuities and such. I have gotten to know all of their various advisers and have read all of their financial documents.
He still signs the checks but the boring stuff I am doing. I do all the shopping and driving.
They are going to live many more years and they have lived a good life. They are actually in fairly good health, other than the Alzheimer’s and we are having them age in place. They have a nice one level Condo that is inexpensive to live in. They do have Long Term Care Insurance when they need it. And it could be 6 months or 3 years or more before we look at the next move into Assisted Living.
We are currently working with an Elder Law Attorney to setup some Safe Harbor Trusts for the if and when.
I will say this, it is not for everyone. It is a lot of work and things are changing every week and even every day. I do have Caregivers coming in up to 4 days per week for 4 hours at a time, if needed.
Fortunately I had done Volunteer work over the last 15 years involving the elderly that provided training in those areas. And I have, since moving in, taken some Care giving Classes, that have been a great help.
So hopefully when the times some, it will not be a cakewalk, but I will have had some experience to lessen any horror stories of my own.
They have some decent assets, but are just middle class. My sister and I will probably get a few bucks. But I am counting on nothing. I have enough passive income to cover me in the future. Plus with Medicare not covering Assisted Living costs, it will be up to Long Term Care Insurance and their savings/assets to be paid down before being eligible for Medicaid.
So my point is that I feel that I am lucky that I am able to see the financial picture at a time that is a little more leisurely and less hectic.
From many experiences with the Elder law, and countless dollars, it has been a total waste of money. Estate lawyers and Judges out weigh Elder Care Attorneys in my state of Indiana. Personally they are a rip off and costly. They do Wills, Trusts, Living Wills things you can do yourself, but when it comes to Estate planning be very, very, careful. I learned the hard and costly way. I shredded every paper and did most myself, and the Estate from an attorney that does nothing but Estates for far less the cost of an Elder Attorney.
I too do not support intellectual property’ being stolen & others profitting from it.. BUT I do not want to see the internet being constantly policed’ & arbitrarily controlled by CYBER-COPS’
Where can I get the documents to draw a Safe Harbor Trust for the State of Washington. I am a Para-Legal in Estate Planning for Wills and Trusts. Is there a Law Office in Washington State I can contact about these documents.
the trustee said I didn’t have a crust_ .NO rights to my dad trust.
Anyone have any insight with NC laws on trusts? Do you have to start probate… I thought a trust kept you from having to do this & also not be responsible for any debts??? How much do things likeththis cost… I’ve heard $2,000 & then also $5,000-$10,000 plus it could take 1+ yes to settle!
I am not sure that I agree with the trust in that the trustee can or not distribute with disgresion. How can we just receive our parts of the oil and cotton like we have been currently and just obsorb the owners part and still have a trustee to negotiate and/or act on our behalf and sure with pay but for me I want to be the one to say when where and what will happen with my part and how I spend or save it not someone else. We started this to avoid the irs crush but mom always muttled through it so I believe I can as well. It has been six months now and when asked for an even draw for each of us was denied because waiting on attornys fees and another sibing being sued well that just draws out everything. I just want to receive my part monthly and yes I would like t have the taxes taken out and I would be willing to pay salary to the one who speaks for us all but to get paid at their disgression no I don’t think so I want that part in my name and coming to me not wondering when it will come and exactly what are they investing in. What can you suggest?
I signed a waiver last year on behalf of my late brother and normally would not, being so shocked; heart hurting heavily, depressed and uncontrollable crying, I signed. I hate I did to this day as its been chaos with the county in which he lived. During his life time he mentioned his will to several family members and ironically there was not one when we learned of his death nearly 24 hours after he was found in his home. When my sisters and I made it to the county in which he lived, his home was locked up and we were never able to go inside as Independent Administrator were given keys and still has them to this day. We are in Texas and he (my brother) lived in Texas as well. I hired another Attorney and it did absolutely no good. He contacted Independent Administrator and the rest is history. He got some of the documents we asked for from IA but conducted no independent research of his on. Still in need of legal assistant but have no funds now. The legal/justice system in Texas is not fair or right.
My mother released a trust through the probate court, on august the 25 this year, but apparently the holding bank does not want to obey the court order and send the money to me, I was planning to use it to pay off some bills and put the rest into a savings account. But every time I call the account manager they are not there. This is considered the 4th largest bank in the world and so far its been a month since the probate court released the trust. How long can a bank draw this out, I thought once the court released the trust it was supposed to be sent within ten days.
My two brother would like to take a step mother to court to comfy with a will but I dont want to can they force me being a trustee of will just the same as them
I am having difficulty going on 5 years. Now the trustee has stopped communication with me all together. Very frustrating. I guess I need to hire an attorney. By the way the trustee is my uncle imagine that.
We just started going through probate for our relative’s estate. She left a will. The executors are brothers at a CPA firm. They won’t respond to emails. We are not being kept informed, my father being the last immediate next of kin is concerned. The executor and their attorney keep asking our relative’s neighbor for information when we have said we don’t want them involved. My dad got that waiver request but no one else (those in the will) did. We hired an attorney. Not sure what to expect next.
Being a Trustee is a license to steal.
This sounds dramatic and cliche’,the fact is a trust has no oversight.
I was a 50% beneficiary of a family trust of $2.3 million cash, I was asked by My Grandmother to live with her, she had never been alone in 65 yrs,used a walker, had relied upon my Grandfather 100%.
I was born when she was 40 and she was more of a Mom to me than my poor Mom who was 17 for 2 months when I was born.
My Grandmother never liked women and I knew she had a bad side and seemed to read into others thoughts and intentions, as she got older she was imagining attributes about people she never met! I only learned this by being around her 24-7 which began after our 2nd year, Pradaxa overdose destroyed her health and took her life over a 2 yr period of strokes and profound changes, more than I knew. I find she has made 6 codicils each one punishing me and for no reason and secretly and while I was providing 24-7 care in my home thinking my contract with her not to revoke my trust or reduce it was respected. She lived with me until her last 4 months which she spent at 3 different care homes! Her tax man now trustee thought nobody knew how much the trust had, he tried to say it was only $400k and my Sister fell for it and was ecstatic! I told her its $2 million plus! she didn’t believe me! even after I mailed her a statement.
It took me to file a probate and they now try saying I missed a deadline to file but they never sent me a rejection form to fill out! My atty wants 405 and really wants to settle, contingency attorneys really never go to trial, they try to ask for $10k if you want to fight to win , they only want easy money with no effort, they do not care about getting what you deserve unless it is easy money, they want only effortless windfalls, and our $2.3 million is now $1.9 million and guess who is benefitting? The lawyer who helped my Grandmother destroy our family
tried to a stale B trust that was irrevocable disenfranchising the B trust beneficiaries !
She gets to represent the trust which the trustee threatened me with doing!
He said do not challenge me or I will use all the trust funds defending myself , he tried to hide $1.5 million for a year and yet is to be even reprimanded for it!
The guy as Grandmothers POA came to me trying to stop her from moving to LA from Nor cal, he had no idea what she wanted , never asked her, I did and she wanted to go and I did nothing to stop her, I never would. imagine my horror to learn my entire future is impoverished now even if I win.
I say BRAVO to you for telling it like it truly is. indeed being a Trustee is a license to steal. ALWAYS ask for supervised will, ALWAYS!!!
Hello Mam
If I were you I would pray about it and give it to Lord, He will sort out the problem. Remember there are many things in life that man cannot solve but the good Lord can.
Have faith and trust in the one above because He makes every thing possible. I will keep you in our daily pray and every thing will work out just fine for you and your family.
Take care
Ann Margaret
PS:
I never go on the Internet in a hurry I just don’t know how I stumbled on this story and it really caught my attention. I guess it was for a special reason I’m sure.
I am praying for you already.
I have a court appointed trustee which is a lawyer. I should have had my final payment 7 months ago on my 40th birthday. The lawyer is sending it in pieces instead of one check and still owes me a considerable amount of money. Since my last dispursement he kept telling me the check will be in the mail on Friday. This went on for the past 4 months.He now stopped returning my calls. I’m going to start by putting in a complaint form with the ethics committee. Any ideas on what to do next? The Will was probated in NJ.
I live in Texas and I am being told since my son is a minor his portion of the sale of the home has to go into the registry of the courts and I am having a hard time with this as he is only 4 and I would like the money to be somewhere it will grow. Ineed to see if it is true since it is realestate that it his portion of the sale has to go into the courts instead of a trust or a utma account
I live in New York City. My Aunt ( My Fathers Sister) just recently passed away and I received a phone call from her sister ( My Other Aunt ) stating that My Sister and I need to sign a waiver proving that she ( My Aunt ) is the owner of the house that both of my Aunts live in and belonged to My Grandmother.
20 Years ago My Father passed away and right after him his Mother ( My Grandmother ) passed away as well.
We were asked back then to sign a waiver.
We were young and naive so My Sister & I did so without any legal representation.. Now 20 Years later we are both being asked to sign a waiver again proving My Aunt has ownership of the said house. ( Mind You, this is what they are telling us). Something didn’t sit right with me 20 years ago and NOW again it still isn’t sitting right. I am not sure what us signing this waiver has to do with that house and I really would rather not do so. Any suggestions or advice ?
I live in Texas and my relative made it very clear over the years he was never close to kids and learning more he even began telling me how the only time he spoke to them is when they called to borrow money. And they never were around for many years. One of them freeloaded well into his 50s and never stopped hitting him up for big lump sums to pay debts and buy trucks. After a while I started to hear him repeat remarks that sounded like verbal abuse. One of them was kicked out by the police also for getting upset when Daddy wouldnt let him borrow money. While the other was a heavy drug user and was caught pulling some shady schemes against her father until he decided to disinherited them all. The verbal abuse got so bad he cut off contact. He gave several warnings but the harrassment and bullying continued. He has many health issues and he stressed strongly he didn’t like the way he was treated over the years and he had enough so he removed them from the inheritance and choose to leave it to me. I was really shocked but after watching how bad they spoke to him and threatened his welfare I really no longer felt sorry for them. Now Im getting lies and threats and thats no suprise. But since everything is in a trust even if they contest it the trust revokes all older will and trusts. And he had modified it five times because he was unhappy with their abuse the more toward the last years. Now they are making up all kinds of stuff to make someome feel sorry for them when he told me many times how they ve always lied and are just horrible people. They also made fun of his mental state but he passed a dementia test well before his passing on. He also was a very strong willed man that was in independent care and paid all his bills on time. Probably one of the most responsible person you’d ever meet. Any advise on this?
Thanks for pointing out that each state has a different regulation that is why the lawyer in one state can’t also be an expert in another state. With that in mind, I will tell my mom to choose a lawyer who is a local in our state. She just needed the help of a lawyer already since she said that she is already old that is why she needs to prepare her will while she is still strong.