Will Vs Living Trust

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frotec
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Will Vs Living Trust

Post by frotec »

I have a will and Living trust related question.  Below is a summary of my situation.

(1) If much of what I have is securities (IRA and non IRA) and some cash in bank >>> all with transfer at death assignments.

(2) I own no real estate (I am a renter) and very little items in my home.

(3) I am a single person with adult kids. 

(4) Do I need to make a Living Trust or will a will suffice.

(5) I live in Michigan.

Thank you in advance for your guidance. 
Bogle64Pilot
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Re: Will Vs Living Trust

Post by Bogle64Pilot »

Contact a local estate planning attorney. There’s a lot more to it then you may think.
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cheese_breath
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Re: Will Vs Living Trust

Post by cheese_breath »

If your estate is small enough after disposing of all designated beneficiary assets you might qualify for small estate processing, and probating the will might not be necessary.

https://michiganlegalhelp.org/self-help ... ght-for-me
The surest way to know the future is when it becomes the past.
TravelforFun
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Re: Will Vs Living Trust

Post by TravelforFun »

frotec wrote: Wed Jun 02, 2021 7:24 pm I have a will and Living trust related question.  Below is a summary of my situation.

(1) If much of what I have is securities (IRA and non IRA) and some cash in bank >>> all with transfer at death assignments.

(2) I own no real estate (I am a renter) and very little items in my home.

(3) I am a single person with adult kids. 

(4) Do I need to make a Living Trust or will a will suffice.

(5) I live in Michigan.

Thank you in advance for your guidance. 
Your situation is so simple. A will should suffice.

TravelforFun
tibbitts
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Re: Will Vs Living Trust

Post by tibbitts »

frotec wrote: Wed Jun 02, 2021 7:24 pm I have a will and Living trust related question.  Below is a summary of my situation.

(1) If much of what I have is securities (IRA and non IRA) and some cash in bank >>> all with transfer at death assignments.

(2) I own no real estate (I am a renter) and very little items in my home.

(3) I am a single person with adult kids. 

(4) Do I need to make a Living Trust or will a will suffice.

(5) I live in Michigan.

Thank you in advance for your guidance. 
I'm not an expert, but I'd say that having something (will or trust) would be far preferable to nothing.
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bhwabeck3533
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Re: Will Vs Living Trust

Post by bhwabeck3533 »

frotec wrote: Wed Jun 02, 2021 7:24 pm I have a will and Living trust related question.  Below is a summary of my situation.

(5) I live in Michigan.

Thank you in advance for your guidance. 
My Mom is widowed, lives in Escanaba (a Yooper), and has both a will and a trust administered by the local bank. My Dad had set up a trust for himself, and later a joint trust was created for their combined assets. My Mom I recently met with the head of the bank's trust department, my learnings:
1. The role of the "executor" named in the will is actionable while the owner of the will is alive (Healthcare and Financial POA).
2. The bank takes over and "probates" the trust (distribution of assets per language in the will and TOD terms in financial accounts) upon her death.
3. The bank charges a very reasonable fee to perform their responsibilities.
4. My Mom's house is held in my Dad's trust, which is a firewall to anyone seeking her assets (such as an Assisted Living facility).
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RickBoglehead
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Re: Will Vs Living Trust

Post by RickBoglehead »

bhwabeck3533 wrote: Thu Jun 03, 2021 7:08 am
frotec wrote: Wed Jun 02, 2021 7:24 pm I have a will and Living trust related question.  Below is a summary of my situation.

(5) I live in Michigan.

Thank you in advance for your guidance. 
My Mom is widowed, lives in Escanaba (a Yooper), and has both a will and a trust administered by the local bank. My Dad had set up a trust for himself, and later a joint trust was created for their combined assets. My Mom I recently met with the head of the bank's trust department, my learnings:
1. The role of the "executor" named in the will is actionable while the owner of the will is alive (Healthcare and Financial POA).
2. The bank takes over and "probates" the trust (distribution of assets per language in the will and TOD terms in financial accounts) upon her death.
3. The bank charges a very reasonable fee to perform their responsibilities.
4. My Mom's house is held in my Dad's trust, which is a firewall to anyone seeking her assets (such as an Assisted Living facility).
Sounds like a great plan (#4). What if Mom had passed first? Then Dad's trust wouldn't be a firewall to anyone, right? Pretty much luck how it worked out.
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RickBoglehead
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Re: Will Vs Living Trust

Post by RickBoglehead »

cheese_breath wrote: Thu Jun 03, 2021 12:10 am If your estate is small enough after disposing of all designated beneficiary assets you might qualify for small estate processing, and probating the will might not be necessary.

https://michiganlegalhelp.org/self-help ... ght-for-me
Right.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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bhwabeck3533
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Re: Will Vs Living Trust

Post by bhwabeck3533 »

RickBoglehead wrote: Thu Jun 03, 2021 7:15 am
4. My Mom's house is held in my Dad's trust, which is a firewall to anyone seeking her assets (such as an Assisted Living facility).
Sounds like a great plan (#4). What if Mom had passed first? Then Dad's trust wouldn't be a firewall to anyone, right? Pretty much luck how it worked out.
-------------------------------------------------------------
The Banker said #4 was one of those mistakes that may have a positive outcome.
DarkHelmetII
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Re: Will Vs Living Trust

Post by DarkHelmetII »

non-attorney here so take this with a grain of salt

1) General idea of doing a trust is to avoid probate
2) Cost of a trust is in the neighborhood of a few thousand $$
3) Many scoff at legalzoom for this type of work - which is fair - however I did use them to draft up something for < $400 and attorney was very patient with me asking (and re-asking) 'stupid' questions to make sure I understood what was going on

I think there is an argument that this is too important to do legalzoom for save a few thousand one-time. Said that, if you are absolutely strapped for cash and / or bent on DIY I have a hard time seeing how a trust through legalzoom is worse than a Will only or nothing at all.

My 2 cents.
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cheese_breath
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Re: Will Vs Living Trust

Post by cheese_breath »

DarkHelmetII wrote: Thu Jun 03, 2021 11:34 am ... 2) Cost of a trust is in the neighborhood of a few thousand $$ ...
That must be one complicated trust or one expensive attorney. My attorney charged me $2,500 for revocable trust plus wills, durable POAs, medical POAs, HIPAA authorizations and physician directives for DW and myself two years ago. Granted, except for the trust they were pretty straightforward, but thousands for a simple trust? That's all OP would need, if even that.
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Lee_WSP
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Re: Will Vs Living Trust

Post by Lee_WSP »

@OP
There are not a lot of benefits to a living trust as opposed to a will with regards to disposition of your final assets. The main benefits of a living trust are avoidance of most probate and it's not a public record. If neither of those matter, than a will is easier to execute and maintain.

The above says nothing about the actual planning, for which a competent attorney may offer guidance. But if your wishes are extremely simple and you have a laisez faire attitude towards what the ultimate disposition of your estate will be, a low cost will with very simple bequests is what you are looking for.
cheese_breath wrote: Thu Jun 03, 2021 12:33 pm
DarkHelmetII wrote: Thu Jun 03, 2021 11:34 am ... 2) Cost of a trust is in the neighborhood of a few thousand $$ ...
That must be one complicated trust or one expensive attorney. My attorney charged me $2,500 for revocable trust plus wills, durable POAs, medical POAs, HIPAA authorizations and physician directives for DW and myself two years ago. Granted, except for the trust they were pretty straightforward, but thousands for a simple trust? That's all OP would need, if even that.
Few thousand would usually be held to mean 3 or 4. 2.5 isn't that far from 3. Legal rates vary very considerably between rural and urban areas. Pretty much following the money.
single2019
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Re: Will Vs Living Trust

Post by single2019 »

Bogle64Pilot wrote: Wed Jun 02, 2021 7:45 pm Contact a local estate planning attorney. There’s a lot more to it then you may think.
My situation is identical to the Topic author. Can you expand why he or I need anything more than a will?

PS: I have absolutely nothing against paying for legal assistance, the question is why (in this particular situation)?
Bogle64Pilot
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Re: Will Vs Living Trust

Post by Bogle64Pilot »

single2019 wrote: Thu Jun 03, 2021 1:23 pm
Bogle64Pilot wrote: Wed Jun 02, 2021 7:45 pm Contact a local estate planning attorney. There’s a lot more to it then you may think.
My situation is identical to the Topic author. Can you expand why he or I need anything more than a will?

PS: I have absolutely nothing against paying for legal assistance, the question is why (in this particular situation)?
Contact an estate planning attorney. They can tailor products to whatever situation you are in. They do not only produce trusts. They are the experts and can give you the exact answer you need as opposed to asking random people who don’t know anything about you on the internet.
DarkHelmetII
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Re: Will Vs Living Trust

Post by DarkHelmetII »

single2019 wrote: Thu Jun 03, 2021 1:23 pm
Bogle64Pilot wrote: Wed Jun 02, 2021 7:45 pm Contact a local estate planning attorney. There’s a lot more to it then you may think.
My situation is identical to the Topic author. Can you expand why he or I need anything more than a will?

PS: I have absolutely nothing against paying for legal assistance, the question is why (in this particular situation)?
The argument is that leaving it up to probate is leaving the process up to the courts and state laws which could be costly, lengthy, and against your wishes.
senex
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Re: Will Vs Living Trust

Post by senex »

single2019 wrote: Thu Jun 03, 2021 1:23 pm My situation is identical to the Topic author. Can you expand why he or I need anything more than a will?
This question tends to get contentious on bogleheads.

If your goals and family are simple, you can absolutely transfer most liquid assets with beneficiary/transfer-on-death (TOD) designations. Some states allow TOD titling on homes, and many states allow very simple "small estate procedures" if your only probate asset is a car. The most basic "software will" may fully satisfy your goals. I have seen several estates easily settle in which a handwritten or software will existed, but was not even needed, because all meaningful assets were joint titled or had beneficiary/TOD, and there was no probate.

A living trust is usually recommended in these cases:
(a) you have assets that will go through probate (for instance, own a home and your state doesn't offer TOD titling) AND you live in a costly/burdensome probate state or have public record concerns, or
(b) you want to arrange the easiest way for a trusted relative/friend to manage your assets while you are alive but incapacitated (note, you can accomplish this with a financial power of attorney, but that may be harder for the relative/friend to manage)

Outside those cases, the experts I've read suggest little reason to have a living trust.

Some reasons an attorney consultation can be helpful include:
  • your family situation is complicated (blended families, children from multiple marriages, etc)
  • you have a lot of money and want to do nontrivial tax optimizations or asset protection structures for your heirs
  • you're leaving money to someone who can't legally or competently manage it (a minor, a drug user, etc)
  • you want someone to do an extra sanity check that you aren't screwing up the basics
  • you want to ensure your plan isn't defeated by things you don't know (*)
(*) some states have restrictions against doing atypical things. For instance, if you are married and leave nothing to your spouse, the state might step in and override your desires, I think, unless you follow special procedures.

Good luck.
Jablean
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Re: Will Vs Living Trust

Post by Jablean »

frotec wrote: Wed Jun 02, 2021 7:24 pm I have a will and Living trust related question.  Below is a summary of my situation.

(1) If much of what I have is securities (IRA and non IRA) and some cash in bank >>> all with transfer at death assignments.

(2) I own no real estate (I am a renter) and very little items in my home.

(3) I am a single person with adult kids. 

(4) Do I need to make a Living Trust or will a will suffice.

(5) I live in Michigan.

Thank you in advance for your guidance. 
Unless you want your securities and bank cash to go into a trust instead of directly to your kids you really don't have to do anything. Even a just a will isn't going to change anything other than personal items. Make sure your TODs will really do what you want - for example what if you and one kid both die in same car crash. Does their share get split between the other kids or handed down to their heirs (per strips).
Topic Author
frotec
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Re: Will Vs Living Trust

Post by frotec »

Thank you for the inputs.. Greatly appreciated
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