Trust, new will, inaction, or ???

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Doom&Gloom
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Trust, new will, inaction, or ???

Post by Doom&Gloom »

DW and I drew up our wills several years ago just as our two children were in/approaching early adulthood. Actually they were her two children before we got married. I have no children or siblings or living parents. I have not legally adopted either child.

Our finances have been kept separate for almost everything. The only asset we own jointly is our home--and most (?) of its contents. When we made our wills we assumed there was only an infinitessimal chance that she might predecease me, so her will leaves everything (except any account with a named beneficiary, of course) to me but we had an understanding that I would "do right" by her children regarding the house and contents if lightning struck. Recent events have made it very possible that she could predecease me. I anticipate no issue passing other items along to the two adult children immediately or whenever they want, but the potential issue of the house now has me stumped.

I certainly would want them to have at least half the value of the home. (BTW, my will passes everything to her. In case of simultaneous death or her predeceasing me, everything goes to the two children.) If DW predeceases me, unless something unforeseen happens my will will certainly continue to pass everything I have along to them. However, I am hesitant for them to have any control of the house while I am still living in it, which I would probably do at least for a while. OTOH I do want to protect their interests from my possible future mental incapacity or other unforeseen circumstances. What is my best path here to prevent future issues if worst comes to worst?

Establishing a trust for only the house seems like a lot of effort and possible expense for just one, not terribly expensive, asset. I would be more than a little uncomfortable trying to set up a DIY trust. FWIW probate is not a terribly onerous process in our state.

Selling (mostly) retirement account assets to raise cash to give them fair market value immediately doesn't seem optimal.

I'm really stuck on this, and I definitely hope the situation doesn't come to pass, but I would love to cross this off my list of things to be concerned about right now. Any and all suggestions would be appreciated.
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Re: Trust, new will, inaction, or ???

Post by NYHawkeye »

I was the executor for my mother's estate and she and my step-father had a similar situation. No one thought she would pass first but did. They had kept their finances separate and re-titled their home as tenants in common with 50% ownership for each of them rather than joint tenants. They also left direction that if one were to pass the other could chose to remain in the home as long as they wished. This made it very easy as my step-father took over all the expenses of the home until he also passed. Then we sold the home and split the proceeds between the two estates. I think it may vary some from state to state but this worked very well for them.
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Re: Trust, new will, inaction, or ???

Post by Sandi_k »

This is what a trust is made to do.

Suppose she passes, the house goes entirely to you, with a promise to "make good." Ten years from now you remarry. Your new spouse pushes you down the stairs, and inherits everything.

:) :)

My stepdad's kids probably have voodoo dolls of my mom. He passed in 2000, and half the house, plus his annuity, plus his IRA passed to them. They got the IRA right away. The house allowed my mom to live in it, and to distribute their half upon her death or sale. The annuity allows her to take the growth of $5k per year, whichever is less.

So for 23 years, they've been waiting. The house is now worth about 3x what is was worth in 2000, so their lien will be cleared when she passes or moves into assisted living. The lien is $60k, divided by 4 kids. The annuity is down to $50k or so, divided by 4 kids. Who are now in their 60's.

I would absolutely find a way to pass on the value of the house through inheritance now, and leave you the house in its entirety. Maybe that means you transfer marital funds to a bank account with a TOD designation, and keep the house as coming to you. But find a way to make it clean, and make it done soon. No one wants to wait 25 years to clear the estate plan.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

Sandi_k wrote: Sun May 28, 2023 8:11 pm Suppose she passes, the house goes entirely to you, with a promise to "make good." Ten years from now you remarry. Your new spouse pushes you down the stairs, and inherits everything.

:) :)
Exactly the kind of possibility I want to eliminate.
Sandi_k wrote: Sun May 28, 2023 8:11 pm This is what a trust is made to do.
That was what I was thinking, but then this seems contradictory???
Sandi_k wrote: Sun May 28, 2023 8:11 pm I would absolutely find a way to pass on the value of the house through inheritance now, and leave you the house in its entirety. Maybe that means you transfer marital funds to a bank account with a TOD designation, and keep the house as coming to you. But find a way to make it clean, and make it done soon. No one wants to wait 25 years to clear the estate plan.
And by doing it "now", I presume you mean as soon as I find myself in the dreaded situation rather than literally now?

And in either case, what if the only means of funding that inheritance meant withdrawing from pre-tax retirement accounts (no withdrawal penalties)? Still a recommendation?
Last edited by Doom&Gloom on Sun May 28, 2023 9:57 pm, edited 1 time in total.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

NYHawkeye wrote: Sun May 28, 2023 7:28 pm I was the executor for my mother's estate and she and my step-father had a similar situation. No one thought she would pass first but did. They had kept their finances separate and re-titled their home as tenants in common with 50% ownership for each of them rather than joint tenants. They also left direction that if one were to pass the other could chose to remain in the home as long as they wished. This made it very easy as my step-father took over all the expenses of the home until he also passed. Then we sold the home and split the proceeds between the two estates. I think it may vary some from state to state but this worked very well for them.
Thanks for the idea.

Would retitling like that then require retitling again after one party passes?
Would any retitling at this late date create a taxable event?
Any idea if homestead exemption from property taxes would be affected by the retitling? Possibly state dependent, so I'd have to check here.
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Re: Trust, new will, inaction, or ???

Post by NYHawkeye »

Doom&Gloom wrote: Sun May 28, 2023 9:19 pm
NYHawkeye wrote: Sun May 28, 2023 7:28 pm I was the executor for my mother's estate and she and my step-father had a similar situation. No one thought she would pass first but did. They had kept their finances separate and re-titled their home as tenants in common with 50% ownership for each of them rather than joint tenants. They also left direction that if one were to pass the other could chose to remain in the home as long as they wished. This made it very easy as my step-father took over all the expenses of the home until he also passed. Then we sold the home and split the proceeds between the two estates. I think it may vary some from state to state but this worked very well for them.
Thanks for the idea.

Would retitling like that then require retitling again after one party passes?
Would any retitling at this late date create a taxable event?
Any idea if homestead exemption from property taxes would be affected by the retitling? Possibly state dependent, so I'd have to check here.
In our case we did not need to retitle again. We offered to sell our 50% to my step father but he was not interested. We also knew he was not going to live too long so just waiting was not an issue. Our lawyer recommended putting our 50% into an LLC if the estate was not going to be settled for a while. This of course would require retitling but we just decided to complete probate and wait and see what happened.

Best to check with a lawyer as there can also be property tax implications but I don't believe in most cases there are tax implications of retitling between spouses from joint to tenants in common.

Homestead varies from state to state so again, would check with a lawyer.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

^^^
Thank you!
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Re: Trust, new will, inaction, or ???

Post by Nowizard »

One thought is that it might provide comfort to your wife if there was a formal document that defined the inheritance of the children if your wife predeceases you. That could be a will. A Revocable Trust has advantages in settling estates in my opinion. My mother had one, though the estate was small, and the heirs were simply defined (All to our two children at 50/50). Trust avoids probate and allows access to funds to settle the estate and avoid the children having to use their funds while disposing of the estate. Assuming a level of trust between the two children, they can be named as joint, Successor Trustees.

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Re: Trust, new will, inaction, or ???

Post by hudson »

Doom&Gloom wrote: Sun May 28, 2023 6:43 pm DW and I drew up our wills several years ago just as our two children were in/approaching early adulthood. Actually they were her two children before we got married. I have no children or siblings or living parents. I have not legally adopted either child.

Our finances have been kept separate for almost everything. The only asset we own jointly is our home--and most (?) of its contents. When we made our wills we assumed there was only an infinitessimal chance that she might predecease me, so her will leaves everything (except any account with a named beneficiary, of course) to me but we had an understanding that I would "do right" by her children regarding the house and contents if lightning struck. Recent events have made it very possible that she could predecease me. I anticipate no issue passing other items along to the two adult children immediately or whenever they want, but the potential issue of the house now has me stumped.

I certainly would want them to have at least half the value of the home. (BTW, my will passes everything to her. In case of simultaneous death or her predeceasing me, everything goes to the two children.) If DW predeceases me, unless something unforeseen happens my will will certainly continue to pass everything I have along to them. However, I am hesitant for them to have any control of the house while I am still living in it, which I would probably do at least for a while. OTOH I do want to protect their interests from my possible future mental incapacity or other unforeseen circumstances. What is my best path here to prevent future issues if worst comes to worst?

Establishing a trust for only the house seems like a lot of effort and possible expense for just one, not terribly expensive, asset. I would be more than a little uncomfortable trying to set up a DIY trust. FWIW probate is not a terribly onerous process in our state.

Selling (mostly) retirement account assets to raise cash to give them fair market value immediately doesn't seem optimal.

I'm really stuck on this, and I definitely hope the situation doesn't come to pass, but I would love to cross this off my list of things to be concerned about right now. Any and all suggestions would be appreciated.
Your wishes sound reasonable and fair.
How do you make it work?
I'd hire a local attorney.
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Re: Trust, new will, inaction, or ???

Post by bsteiner »

Doom&Gloom wrote: Sun May 28, 2023 6:43 pm DW and I drew up our wills several years ago just as our two children were in/approaching early adulthood. Actually they were her two children before we got married. I have no children or siblings or living parents. I have not legally adopted either child.

Our finances have been kept separate for almost everything. The only asset we own jointly is our home--and most (?) of its contents. When we made our wills we assumed there was only an infinitessimal chance that she might predecease me, so her will leaves everything (except any account with a named beneficiary, of course) to me but we had an understanding that I would "do right" by her children regarding the house and contents if lightning struck. Recent events have made it very possible that she could predecease me. I anticipate no issue passing other items along to the two adult children immediately or whenever they want, but the potential issue of the house now has me stumped.

I certainly would want them to have at least half the value of the home. (BTW, my will passes everything to her. In case of simultaneous death or her predeceasing me, everything goes to the two children.) If DW predeceases me, unless something unforeseen happens my will will certainly continue to pass everything I have along to them. However, I am hesitant for them to have any control of the house while I am still living in it, which I would probably do at least for a while. OTOH I do want to protect their interests from my possible future mental incapacity or other unforeseen circumstances. What is my best path here to prevent future issues if worst comes to worst?

Establishing a trust for only the house seems like a lot of effort and possible expense for just one, not terribly expensive, asset. I would be more than a little uncomfortable trying to set up a DIY trust. FWIW probate is not a terribly onerous process in our state.

Selling (mostly) retirement account assets to raise cash to give them fair market value immediately doesn't seem optimal.

...
Unless it's community property, a 2-person trust is complicated.

Also, you said you want then to get at least half the value of the house, not half the house.

While it's not simple either, you could enter into an agreement in which you agree that if she dies first, you'll leave her chlldren half of the value of the house as of your death. You could always leave them more than that. You would have to decide what the agreed amount would be if you were to survive your wife but sell the house during your lifetime. It could be, for example, half of the net proceeds, perhaps indexed for inflation.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

bsteiner wrote: Mon May 29, 2023 9:14 am
Doom&Gloom wrote: Sun May 28, 2023 6:43 pm DW and I drew up our wills several years ago just as our two children were in/approaching early adulthood. Actually they were her two children before we got married. I have no children or siblings or living parents. I have not legally adopted either child.

Our finances have been kept separate for almost everything. The only asset we own jointly is our home--and most (?) of its contents. When we made our wills we assumed there was only an infinitessimal chance that she might predecease me, so her will leaves everything (except any account with a named beneficiary, of course) to me but we had an understanding that I would "do right" by her children regarding the house and contents if lightning struck. Recent events have made it very possible that she could predecease me. I anticipate no issue passing other items along to the two adult children immediately or whenever they want, but the potential issue of the house now has me stumped.

I certainly would want them to have at least half the value of the home. (BTW, my will passes everything to her. In case of simultaneous death or her predeceasing me, everything goes to the two children.) If DW predeceases me, unless something unforeseen happens my will will certainly continue to pass everything I have along to them. However, I am hesitant for them to have any control of the house while I am still living in it, which I would probably do at least for a while. OTOH I do want to protect their interests from my possible future mental incapacity or other unforeseen circumstances. What is my best path here to prevent future issues if worst comes to worst?

Establishing a trust for only the house seems like a lot of effort and possible expense for just one, not terribly expensive, asset. I would be more than a little uncomfortable trying to set up a DIY trust. FWIW probate is not a terribly onerous process in our state.

Selling (mostly) retirement account assets to raise cash to give them fair market value immediately doesn't seem optimal.

...
Unless it's community property, a 2-person trust is complicated.

Also, you said you want then to get at least half the value of the house, not half the house.

While it's not simple either, you could enter into an agreement in which you agree that if she dies first, you'll leave her chlldren half of the value of the house as of your death. You could always leave them more than that. You would have to decide what the agreed amount would be if you were to survive your wife but sell the house during your lifetime. It could be, for example, half of the net proceeds, perhaps indexed for inflation.
It is not a community property state. I was thinking of both scenarios--either establishing a trust while we both are living or establishing one after her death in the event that she dies first.

Yes, that is the gist of the verbal understanding we had at the time we were making our wills. The entire conversation as I recall was:
"I want to be sure my kids don't get left out if I should die first."
"Of course they won't."
"OK."

I am looking for a way to cement that promise should she pass before me. Neither now-adult child will have any desire or need for our current home. I can't imagine that my finding a generously fair value would be an issue. Should I have adequate liquid post-tax cash and/or investments at the time she passes, I could solve the problem immediately should it present itself. Right now I do not, and I probably won't for at least a few years. In a few years I could well have one foot in dementia; who knows?

Perhaps getting a HELOC if/when needed for 50+% of the value of the house would be a decent option if rates fall closer to previous levels? At least that would solve the problem of getting the funds to the kids in a timely manner which a trust or my will would not do.

Thank you and everyone else who has responded.
I very well may see our attorney or an elder law attorney if/when this seems like it will become imminent. It is a situation I never anticipated actually finding myself in so I hadn't give much thought as to how the mechanics of it might look.
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Re: Trust, new will, inaction, or ???

Post by bsteiner »

Doom&Gloom wrote: Mon May 29, 2023 10:46 am ...
I very well may see our attorney or an elder law attorney if/when this seems like it will become imminent. It is a situation I never anticipated actually finding myself in so I hadn't give much thought as to how the mechanics of it might look.
A trusts and estates lawyer would probably be a better fit since this is more of an estate planning matter than a Medicaid or guardianship matter.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

bsteiner wrote: Mon May 29, 2023 10:59 am
Doom&Gloom wrote: Mon May 29, 2023 10:46 am ...
I very well may see our attorney or an elder law attorney if/when this seems like it will become imminent. It is a situation I never anticipated actually finding myself in so I hadn't give much thought as to how the mechanics of it might look.
A trusts and estates lawyer would probably be a better fit since this is more of an estate planning matter than a Medicaid or guardianship matter.
Thank you!
I will make a note of that for future reference.
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Re: Trust, new will, inaction, or ???

Post by CAsage »

IMO you need to ensure that your future needs (housing, medical, retirement) are taken care of first. If you are sufficiently flush to gift them a chunk of future inheritance when their Mom passes, well and good. Otherwise, set up a will or trust for the house when you pass. If you kept your assets separate, I would guess that her assets will pass first (if the bad things play out), and yours are enough for your support? I would want the house free and clear, with Joint tenants right of survivorship now.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
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Re: Trust, new will, inaction, or ???

Post by Big Dog »

your scenario is ideal for a Trust. See a local estates/trust lawyer.
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Re: Trust, new will, inaction, or ???

Post by Lee_WSP »

There's three main ways to tackle this issue:

1) Trust each other - everything to the other and trust each other to leave to the children (fairly popular, but not robust in safeguards)
2) Leave wife's share in trust to husband to enjoy for life, remainder to wife's children
3) X% of wife's share goes to children outright and there's a clean split.

1 & 3 are the easiest to draft and even a doc preparer can do it for you. Option 2 requires knowledge to reduce the friction.

Option 2 can have any number of variants to it as well. A fourth option is to put the house itself into an irrevocable trust, but that's not a great option unless you anticipate needing Medicaid.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

Thanks to CAsage and Big Dog chiming in. Perhaps their comments will be addressed in my reply here.
Lee_WSP wrote: Mon May 29, 2023 11:20 am There's three main ways to tackle this issue:

1) Trust each other - everything to the other and trust each other to leave to the children (fairly popular, but not robust in safeguards)
2) Leave wife's share in trust to husband to enjoy for life, remainder to wife's children
3) X% of wife's share goes to children outright and there's a clean split.

1 & 3 are the easiest to draft and even a doc preparer can do it for you. Option 2 requires knowledge to reduce the friction.

Option 2 can have any number of variants to it as well. A fourth option is to put the house itself into an irrevocable trust, but that's not a great option unless you anticipate needing Medicaid.
I didn't realize that not including the following info would affect the replies, so I apologize.
My retirement accounts should be more than sufficient for my future needs--and then some. I can't predict the future, but I feel quite comfortable about it.

DW's assets, not so much. She has had a lifelong spending problem. She had great control of it for several years, but during the past three years she has gotten herself in enough debt that she may not dig herself out of it despite having a nice COLA-adjusted retirement income.
She will be 62 next year and was disappointed that I showed her the output of the SS calculator here (apologies for not recalling the name) which was recommending that she defer SS until 70. After recent medical diagnoses, I think her claiming at 62 will be a no-brainer. Though she would not admit it to me, I think her get-out-of-debt plan this time depends upon her 95 y/o mother's trust being distributed eventually. That should net her low-mid six figures plus her mother's home. That will all pass per stirpes if she should pre-decease her mother. So depending upon the timing of things, she could have next to nothing or moderate assets if she doesn't manage to spend them almost immediately or MIL's trust doesn't get spent down. My name will not be attached to any of her possible future inherited assets--even as a beneficiary--at any point in time. (DD is currently working with DW to pay down her current debt aggressively, but it's a slog.)

Your #1 seems to be where we are now, and I am currently seeking safeguards.
We seem to have neither the need nor the ability for #2.
Are you suggesting that I could confidently do #3 via commercial software?

As to #4, my plans include no need for Medicare--probably couldn't qualify anyway without some shenanigans which I wouldn't bother with. I will do anything within my power to avoid LTC. Of course things could happen, but not worth considering imo.

Thanks for the detailed response!

eta: Our house has been paid for.
Medical expenses have kicked up, but we (insurance and I) should be able to deal with those.
Last edited by Doom&Gloom on Mon May 29, 2023 12:10 pm, edited 1 time in total.
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Re: Trust, new will, inaction, or ???

Post by Lee_WSP »

Doom&Gloom wrote: Mon May 29, 2023 12:00 pm Are you suggesting that I could confidently do #3 via commercial software?
I’m not entirely sure what options are available via commercial software such as Nolo or LegalZoom. I would advise against it regardless.

I think the $1,000 - $1,500 or so a licensed attorney would charge to do it is well worth it, but if you can’t afford to swing it, a document preparer is possible, but I’m hesitant to recommend one over intestacy. If you are dead set on spending as little as possible, there is free software out there, but be advised that you may make things worse. Intestacy in many states already provides for the split, so doing nothing may be your best option.

What state are you in? I or someone else can look up your state’s intestacy statute.

For example, in Arizona (my state), if wife predeceased, half of her estate would go to her child and half to you. If you predecease her, then all your estate would go to her.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

Lee_WSP wrote: Mon May 29, 2023 12:08 pm
Doom&Gloom wrote: Mon May 29, 2023 12:00 pm Are you suggesting that I could confidently do #3 via commercial software?
I’m not entirely sure what options are available via commercial software such as Nolo or LegalZoom. I would advise against it regardless.

I think the $1,000 - $1,500 or so a licensed attorney would charge to do it is well worth it, but if you can’t afford to swing it, a document preparer is possible, but I’m hesitant to recommend one over intestacy. If you are dead set on spending as little as possible, there is free software out there, but be advised that you may make things worse. Intestacy in many states already provides for the split, so doing nothing may be your best option.

What state are you in? I or someone else can look up your state’s intestacy statute.

For example, in Arizona (my state), if wife predeceased, half of her estate would go to her child and half to you. If you predecease her, then all your estate would go to her.
My bad. I misinterpreted "doc preparer." I'm in MS and can afford an attorney if that is the best route.
We both have current wills. Mine leaves everything to the two kids, split equally, should DW predecease me. That doesn't seem to protect them from me doing something goofy later in life though.
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Re: Trust, new will, inaction, or ???

Post by hudson »

Doom&Gloom wrote: Mon May 29, 2023 12:00 pm
Are you suggesting that I could confidently do #3 via commercial software?

As to #4, my plans include no need for Medicare--probably couldn't qualify anyway without some shenanigans which I wouldn't bother with. I will do anything within my power to avoid LTC. Of course things could happen, but not worth considering imo.
Commercial software? A friend was a trust officer for a decade. He has several nightmare stories of folks that tried this. You don't know what you don't know. I'd want my final papers prepared by someone with long experience.

Avoid LTC? Me too but I realize that that's probably a pipe dream.

No need for Medicaid? I'm probably in the same boat...no shenanigans for me.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

hudson wrote: Mon May 29, 2023 12:25 pm
Doom&Gloom wrote: Mon May 29, 2023 12:00 pm
Are you suggesting that I could confidently do #3 via commercial software?

As to #4, my plans include no need for Medicare--probably couldn't qualify anyway without some shenanigans which I wouldn't bother with. I will do anything within my power to avoid LTC. Of course things could happen, but not worth considering imo.
Commercial software? A friend was a trust officer for a decade. He has several nightmare stories of folks that tried this. You don't know what you don't know. I'd want my final papers prepared by someone with long experience.

Avoid LTC? Me too but I realize that that's probably a pipe dream.

No need for Medicaid? I'm probably in the same boat...no shenanigans for me.
Yes, I posted earlier that I wasn't comfortable with any DIY stuff. I simply misinterpreted something in Lee's post. Completely my fault.

Pipe dream or not, that's my plan. And I really have nobody other than DW, DD, and DS to try to preserve an estate for. They're all in decent shape already (or will/should be), so I'm not contorting myself with trying to comply with any Medicaid requirements for services I don't even want.
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Re: Trust, new will, inaction, or ???

Post by Lee_WSP »

Doom&Gloom wrote: Mon May 29, 2023 12:14 pm
Lee_WSP wrote: Mon May 29, 2023 12:08 pm
Doom&Gloom wrote: Mon May 29, 2023 12:00 pm Are you suggesting that I could confidently do #3 via commercial software?
I’m not entirely sure what options are available via commercial software such as Nolo or LegalZoom. I would advise against it regardless.

I think the $1,000 - $1,500 or so a licensed attorney would charge to do it is well worth it, but if you can’t afford to swing it, a document preparer is possible, but I’m hesitant to recommend one over intestacy. If you are dead set on spending as little as possible, there is free software out there, but be advised that you may make things worse. Intestacy in many states already provides for the split, so doing nothing may be your best option.

What state are you in? I or someone else can look up your state’s intestacy statute.

For example, in Arizona (my state), if wife predeceased, half of her estate would go to her child and half to you. If you predecease her, then all your estate would go to her.
My bad. I misinterpreted "doc preparer." I'm in MS and can afford an attorney if that is the best route.
We both have current wills. Mine leaves everything to the two kids, split equally, should DW predecease me. That doesn't seem to protect them from me doing something goofy later in life though.
No, but that costs extra and unless your estate is extremely large, it's probably not worth the cost.
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Doom&Gloom
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

Lee_WSP wrote: Mon May 29, 2023 12:40 pm
Doom&Gloom wrote: Mon May 29, 2023 12:14 pm
Lee_WSP wrote: Mon May 29, 2023 12:08 pm
Doom&Gloom wrote: Mon May 29, 2023 12:00 pm Are you suggesting that I could confidently do #3 via commercial software?
I’m not entirely sure what options are available via commercial software such as Nolo or LegalZoom. I would advise against it regardless.

I think the $1,000 - $1,500 or so a licensed attorney would charge to do it is well worth it, but if you can’t afford to swing it, a document preparer is possible, but I’m hesitant to recommend one over intestacy. If you are dead set on spending as little as possible, there is free software out there, but be advised that you may make things worse. Intestacy in many states already provides for the split, so doing nothing may be your best option.

What state are you in? I or someone else can look up your state’s intestacy statute.

For example, in Arizona (my state), if wife predeceased, half of her estate would go to her child and half to you. If you predecease her, then all your estate would go to her.
My bad. I misinterpreted "doc preparer." I'm in MS and can afford an attorney if that is the best route.
We both have current wills. Mine leaves everything to the two kids, split equally, should DW predecease me. That doesn't seem to protect them from me doing something goofy later in life though.
No, but that costs extra and unless your estate is extremely large, it's probably not worth the cost.
Thanks! I certainly wouldn't consider it extremely large.
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Sandi_k
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Re: Trust, new will, inaction, or ???

Post by Sandi_k »

So two things:

1) Medicare is not something you have to qualify for - that's Medicaid.

2) MS has what's called a Transfer on Death Deed. You and your wife could quitclaim now to a TODD, for the benefit of her kids.

https://ltams.org/transfer-on-death-deeds/
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Doom&Gloom
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

hudson wrote: Mon May 29, 2023 12:25 pm
Doom&Gloom wrote: Mon May 29, 2023 12:00 pm
Are you suggesting that I could confidently do #3 via commercial software?

As to #4, my plans include no need for Medicaid--probably couldn't qualify anyway without some shenanigans which I wouldn't bother with. I will do anything within my power to avoid LTC. Of course things could happen, but not worth considering imo.
Commercial software? A friend was a trust officer for a decade. He has several nightmare stories of folks that tried this. You don't know what you don't know. I'd want my final papers prepared by someone with long experience.

Avoid LTC? Me too but I realize that that's probably a pipe dream.

No need for Medicaid? I'm probably in the same boat...no shenanigans for me.
Carefreeap
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Re: Trust, new will, inaction, or ???

Post by Carefreeap »

Doom&Gloom wrote: Mon May 29, 2023 12:36 pm
hudson wrote: Mon May 29, 2023 12:25 pm
Doom&Gloom wrote: Mon May 29, 2023 12:00 pm
Are you suggesting that I could confidently do #3 via commercial software?

As to #4, my plans include no need for Medicare--probably couldn't qualify anyway without some shenanigans which I wouldn't bother with. I will do anything within my power to avoid LTC. Of course things could happen, but not worth considering imo.
Commercial software? A friend was a trust officer for a decade. He has several nightmare stories of folks that tried this. You don't know what you don't know. I'd want my final papers prepared by someone with long experience.

Avoid LTC? Me too but I realize that that's probably a pipe dream.

No need for Medicaid? I'm probably in the same boat...no shenanigans for me.
Yes, I posted earlier that I wasn't comfortable with any DIY stuff. I simply misinterpreted something in Lee's post. Completely my fault.

Pipe dream or not, that's my plan. And I really have nobody other than DW, DD, and DS to try to preserve an estate for. They're all in decent shape already (or will/should be), so I'm not contorting myself with trying to comply with any Medicaid requirements for services I don't even want.
Hi Doom and Gloom,

One other planning issue is whether your wife's diagnosis would likely involve LTC. Good ones are expensive. Does she have LTC insurance?
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Re: Trust, new will, inaction, or ???

Post by TN_Boy »

NYHawkeye wrote: Sun May 28, 2023 7:28 pm I was the executor for my mother's estate and she and my step-father had a similar situation. No one thought she would pass first but did. They had kept their finances separate and re-titled their home as tenants in common with 50% ownership for each of them rather than joint tenants. They also left direction that if one were to pass the other could chose to remain in the home as long as they wished. This made it very easy as my step-father took over all the expenses of the home until he also passed. Then we sold the home and split the proceeds between the two estates. I think it may vary some from state to state but this worked very well for them.
I've also seen situations where the order of deaths was not "expected." And it might have had some negative financial impact due to the erroneous assumption.

In general I strongly believe that if a couple's estate plan assumes one spouse will predecease the other, it's a bad estate plan. If you are going to the trouble of putting together an estate plan, go through all the permutations. It's unlikely to cost you more to get the will to handle all the cases.
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Doom&Gloom
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

Sandi_k wrote: Mon May 29, 2023 1:12 pm So two things:

1) Medicare is not something you have to qualify for - that's Medicaid.

2) MS has what's called a Transfer on Death Deed. You and your wife could quitclaim now to a TODD, for the benefit of her kids.

https://ltams.org/transfer-on-death-deeds/
Rats! I almost missed this post as it showed up while I was writing another post.

1) Dang it! I know the difference but often unintentionally interchange their names. I try to double-check when I write either of them, but I missed at least once in this thread. I edited that one, but I can't promise there aren't others. Thanks for pointing it out. I apologize for my oversight.

2) I never heard of such a thing. I had no idea ...
I just went and read the linked article. That seems to be almost exactly what the doctor ordered. I really don't want to broach this subject now and see no need to do so. However, if I find myself widowed, it seems like an obvious thing to do whether or not I can distribute half of the value to the kids at the time. It isn't perfect, but it does put up an extra guardrail for my subsequently going against my own intentions.

Thank you so much!
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Sandi_k
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Re: Trust, new will, inaction, or ???

Post by Sandi_k »

Doom&Gloom wrote: Mon May 29, 2023 1:48 pm
Sandi_k wrote: Mon May 29, 2023 1:12 pm So two things:

1) Medicare is not something you have to qualify for - that's Medicaid.

2) MS has what's called a Transfer on Death Deed. You and your wife could quitclaim now to a TODD, for the benefit of her kids.

https://ltams.org/transfer-on-death-deeds/
Rats! I almost missed this post as it showed up while I was writing another post.

1) Dang it! I know the difference but often unintentionally interchange their names. I try to double-check when I write either of them, but I missed at least once in this thread. I edited that one, but I can't promise there aren't others. Thanks for pointing it out. I apologize for my oversight.

2) I never heard of such a thing. I had no idea ...
I just went and read the linked article. That seems to be almost exactly what the doctor ordered. I really don't want to broach this subject now and see no need to do so. However, if I find myself widowed, it seems like an obvious thing to do whether or not I can distribute half of the value to the kids at the time. It isn't perfect, but it does put up an extra guardrail for my subsequently going against my own intentions.

Thank you so much!
So maybe not now, but soon. My FIL was on top of all of this...until he wasn't. The cognitive decline was slow, and subtle, but it manifested in an inability to understand legal documents, and stubborn pride that prevented asking for help. So many things that he had put in place have been superseded by bank buyouts, tax law changes, one son's divorce, etc.

There is no need to wait. If you do it soon, you will have assuaged your wife's concerns, and you won't be planning on some "future" date that might never come.

I encourage you to print out the TODD article, and leave it laying around for your spouse. And then make an appointment and get it done.
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Doom&Gloom
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

Carefreeap wrote: Mon May 29, 2023 1:38 pm
Doom&Gloom wrote: Mon May 29, 2023 12:36 pm
hudson wrote: Mon May 29, 2023 12:25 pm
Doom&Gloom wrote: Mon May 29, 2023 12:00 pm
Are you suggesting that I could confidently do #3 via commercial software?

As to #4, my plans include no need for Medicare--probably couldn't qualify anyway without some shenanigans which I wouldn't bother with. I will do anything within my power to avoid LTC. Of course things could happen, but not worth considering imo.
Commercial software? A friend was a trust officer for a decade. He has several nightmare stories of folks that tried this. You don't know what you don't know. I'd want my final papers prepared by someone with long experience.

Avoid LTC? Me too but I realize that that's probably a pipe dream.

No need for Medicaid? I'm probably in the same boat...no shenanigans for me.
Yes, I posted earlier that I wasn't comfortable with any DIY stuff. I simply misinterpreted something in Lee's post. Completely my fault.

Pipe dream or not, that's my plan. And I really have nobody other than DW, DD, and DS to try to preserve an estate for. They're all in decent shape already (or will/should be), so I'm not contorting myself with trying to comply with any Medicaid requirements for services I don't even want.
Hi Doom and Gloom,

One other planning issue is whether your wife's diagnosis would likely involve LTC. Good ones are expensive. Does she have LTC insurance?
No, she doesn't.
Another thing I hadn't even considered. Thanks for bringing it to my attention. I wouldn't think LTC would be very likely, but I'll need to do some research--including whether she would even be eligible at this point.
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

Sandi_k wrote: Mon May 29, 2023 1:55 pm
Doom&Gloom wrote: Mon May 29, 2023 1:48 pm
Sandi_k wrote: Mon May 29, 2023 1:12 pm So two things:

1) Medicare is not something you have to qualify for - that's Medicaid.

2) MS has what's called a Transfer on Death Deed. You and your wife could quitclaim now to a TODD, for the benefit of her kids.

https://ltams.org/transfer-on-death-deeds/
Rats! I almost missed this post as it showed up while I was writing another post.

1) Dang it! I know the difference but often unintentionally interchange their names. I try to double-check when I write either of them, but I missed at least once in this thread. I edited that one, but I can't promise there aren't others. Thanks for pointing it out. I apologize for my oversight.

2) I never heard of such a thing. I had no idea ...
I just went and read the linked article. That seems to be almost exactly what the doctor ordered. I really don't want to broach this subject now and see no need to do so. However, if I find myself widowed, it seems like an obvious thing to do whether or not I can distribute half of the value to the kids at the time. It isn't perfect, but it does put up an extra guardrail for my subsequently going against my own intentions.

Thank you so much!
So maybe not now, but soon. My FIL was on top of all of this...until he wasn't. The cognitive decline was slow, and subtle, but it manifested in an inability to understand legal documents, and stubborn pride that prevented asking for help. So many things that he had put in place have been superseded by bank buyouts, tax law changes, one son's divorce, etc.

There is no need to wait. If you do it soon, you will have assuaged your wife's concerns, and you won't be planning on some "future" date that might never come.

I encourage you to print out the TODD article, and leave it laying around for your spouse. And then make an appointment and get it done.
Thanks for your thoughts, but DW has no concerns about this particular subject AFAIK. We have not discussed this since that one brief conversation we had when making our wills. I am the one with the concerns which, thanks to the fantastic input in this thread, have been mostly assuaged. I did not want to be caught unprepared regarding some financial mechanics at a time when everyone might have more important things on their minds.

I can guarantee that this is not a discussion that DW wants to have now. She has other foci for the next three months. However, I can assure you that if she gives me the slightest opening, I will bring it up, make the suggestion, and facilitate the implementation if possible. If it does not come up prior to then, I will indeed broach the subject when she is not focused on more pressing concerns.
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Sandi_k
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Re: Trust, new will, inaction, or ???

Post by Sandi_k »

@Doom&Gloom - if her illness worsens, then it will be even less of a possibility. And if you're currently on title as joint tenants with rights of survivorship, you'll have to get the titling re-done should she pass. And by then, YOU might have cognitive issues.

Again - I'm dealing with family circumstances where earlier would have been better. And too late is too late.
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Re: Trust, new will, inaction, or ???

Post by bsteiner »

Lee_WSP wrote: Mon May 29, 2023 12:08 pm ...
I think the $1,000 - $1,500 or so a licensed attorney would charge to do it is well worth it, ....
That seems low, especially since there's some complexity to this.
Doom&Gloom wrote: Mon May 29, 2023 12:14 pm ... I'm in MS and can afford an attorney if that is the best route.
...
That seems low even for Mississippi.
Sandi_k wrote: Mon May 29, 2023 1:12 pm ... MS has what's called a Transfer on Death Deed. You and your wife could quitclaim now to a TODD, for the benefit of her kids.
...
Those can create other problems. It's piecemeal (asset by asset) planning. What if she dies and he then sells the house? What if one of her children predeceases him? It puts a portion of his estate plan in the public records during his lifetime. It makes it harder to provide for her children in trust rather than outright, to keep their inheritances out of their estates and to protect their inheritances from their creditors and spouses.

Also, the original poster wanted to give her chlidren half of the value of the house, not half of the house. What if he sells the house?
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Re: Trust, new will, inaction, or ???

Post by Lee_WSP »

Doom&Gloom wrote: Mon May 29, 2023 1:48 pm
Sandi_k wrote: Mon May 29, 2023 1:12 pm So two things:

1) Medicare is not something you have to qualify for - that's Medicaid.

2) MS has what's called a Transfer on Death Deed. You and your wife could quitclaim now to a TODD, for the benefit of her kids.

https://ltams.org/transfer-on-death-deeds/
Rats! I almost missed this post as it showed up while I was writing another post.

1) Dang it! I know the difference but often unintentionally interchange their names. I try to double-check when I write either of them, but I missed at least once in this thread. I edited that one, but I can't promise there aren't others. Thanks for pointing it out. I apologize for my oversight.

2) I never heard of such a thing. I had no idea ...
I just went and read the linked article. That seems to be almost exactly what the doctor ordered. I really don't want to broach this subject now and see no need to do so. However, if I find myself widowed, it seems like an obvious thing to do whether or not I can distribute half of the value to the kids at the time. It isn't perfect, but it does put up an extra guardrail for my subsequently going against my own intentions.

Thank you so much!
Be aware that the TODD, if executed by your wife, would have the effect of you sharing ownership of the house with your step children. You're OP stated that this was undesirable if able to be avoided. Btw, it would the same result if you went with the less expensive will which divides up wife's estate 50% to you and 50% to children.

The Medicaid trust is the nuclear foolproof option where you get to keep control over the house and live there, but ensure that no one can take it away from the children. It has the double edge of you no longer owning the asset outright anymore and only controlling it indirectly.
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Re: Trust, new will, inaction, or ???

Post by HomeStretch »

I don’t know how good your relationship is with your wife’s children. If their mother was to pass, do they need the reassurance of a Trust or some other formal arrangement in order to feel secure that their mother’s remaining assets will pass to them upon your passing rather than just your promise to her to do so? That’s not at all to imply you are untrustworthy. Rather ‘stuff’ happens with subsequent remarriages, incapacitation, etc. And I think you may need them as you age for help with care and finances as you don’t have any other family. So it’s important to avoid any strain in the relationship with them.

With friends (the children), I have seen this issue come up in a variety of ways, usually resulting in a strained relationship with the surviving step parent. If there is an option for some assets to pass to the children at the time of their mother’s passing and to avoid them becoming co-owners on the house you will continue living in, it’s worthwhile to consider that option too.
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Doom&Gloom
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Re: Trust, new will, inaction, or ???

Post by Doom&Gloom »

HomeStretch wrote: Mon May 29, 2023 2:48 pm I don’t know how good your relationship is with your wife’s children. If their mother was to pass, do they need the reassurance of a Trust or some other formal arrangement in order to feel secure that their mother’s remaining assets will pass to them upon your passing rather than just your promise to her to do so? That’s not at all to imply you are untrustworthy. Rather ‘stuff’ happens with subsequent remarriages, incapacitation, etc. And I think you may need them as you age for help with care and finances as you don’t have any other family. So it’s important to avoid any strain in the relationship with them.

With friends (the children), I have seen this issue come up in a variety of ways, usually resulting in a strained relationship with the surviving step parent. If there is an option for some assets to pass to the children at the time of their mother’s passing and to avoid them becoming co-owners on the house you will continue living in, it’s worthwhile to consider that option too.
I'm super close with one; the other and I run hot and cold--not sure how that one would settle if something happened to DW. I don't think either would question me following through on anything I told them. I'd be shocked and very disappointed if they did. That is why I'm attempting to make this as foolproof as reasonably possible.

I know I don't want to be dependent upon either for anything as I age. I would certainly accept some offers of help, but I can't see me requesting help from either. Both were raised well, and I'd be disappointed if they didn't offer some assistance if I needed it. Neither has put down permanent roots yet, but we fully expect one will settle near here in a few years (military spouse). The other is anybody's guess.

In the event that DW passes prior to me, I have no interest in sharing ownership with anyone. Selling and downsizing would be an option but one that I'm not sold on.
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Re: Trust, new will, inaction, or ???

Post by JayDee37 »

My fiancé and I have started having these types of planning conversations more intentionally lately. He has 3 kids and I have 2, and we also have a mix of different types of assets (he has a house, I have large retirement and brokerage accounts, etc). So I'm interested to hear all of the feedback on this thread as well.

Personally I would be extremely uncomfortable with only having a verbal agreement to ensure the kids are all treated fairly when one and then the other of us passes, and it sounds like you are also feeling uncomfortable about this. My fiancé and I trust each other to act ethically in regards to the kids, but for all the reasons that have been mentioned (possible remarriage/new relationships, cognitive decline, his issues with debt and money management) we are planning to work with a professional and get estate planning documents drawn up that reflect our goals. Those goals being:

1. Ensure that the surviving spouse is able to live out their days in comfort and dignity. This means that he/she will have the option to remain in whatever home we'd been sharing for as long as desired/feasible, have enough income to support the standard of living we had been enjoying, and enough funds to pay for LTC if necessary.
2. Any remaining value in the estate will pass to the kids, with whatever is left of our separate property going to our own kids, and any marital property being split 5 equal ways.

I don't know anything about the practical details of how to reach these goals, which is why we will be working with a professional to figure it out.

Basically I would offer the following suggestions to you:

1. You and your wife should work with a professional to figure all this stuff out.
2. You should do it now-ish. Perhaps wait a few months to let the shock of your wife's diagnosis settle, have her treatment plans in place, etc, but once your "new normal" is established you should turn your attention to the estate planning piece. It is horrible to be dealing with unsettled estate planning issues when your loved one is in the process of dying. My fiancé and his family had to deal with this a couple of years ago when his dad was unexpectedly taken critically ill and ended up lingering in a hospital for months and then dying. Don't put yourself, your wife, or the kids through this. Have everything taken care of so that you can focus on each other during one of the most difficult times in all of your lives.
Tell me, what is it you plan to do with your one wild and precious life? | ~Mary Oliver
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