Have we discussed estate planning here yet?

[Rick Lee]

I have a legal plan through my job and belatedly found out it covers very little. So, as long as I'm stuck paying for it, I need to use it (before I lose my job). I made an appt. with an estate lawyer to talk about a revocable living trust and all that stuff. My out of pocket for the whole thing will be $670. Is this a good deal or should I try the DIY route with Legal Zoom? Mrs. Lee would be in big trouble if I died without some estate planning, as I pretty much handle everything and she's not real interested in getting involved in it all. So I want to make it all as easy as possible for whichever one of us outlives the other.

[wdfifteen]

$670 is a steal based on my experience. This is something you want to get right the first time. You don't want some IRS lawyer coming along after you're gone telling Mrs Lee that there was some vague language in the documents and she owes them big time.

[widgeon13]

The below are the current guidelines for federal filing. You can pass 5 Mil to you wife simply by using a good will. The state may also want it's cut. If you have no children it's pretty straightforward otherwise you might want to set up a trust for your children. If you net worth is over 5 Mil, the picture changes pretty dramatically and a lot depends on your state of residence. If you can get some guidance for $670 it's probably a good deal. I have paid $450/ hr for an estate lawyer to give me some guidance.

"Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012 and $5,250,000 in 2013.'

[Rick Lee]

We didn't discuss any IRS stuff other than the estate tax, which we're way, way too poor to worry about, even though I'm sure it will change again a few more times before we're gone. I sort of came away thinking a revocable trust covers any asset with paperwork or a title and the rest can be written up in a pore over will. Other than the houses, vehicles and retirement/brokerage accounts, we wouldn't have anything else to warrant a trust. Can this be done easily AND effectively with Legal Zoom?

[widgeon13]

I believe that if you are legally married a simple will should be sufficient for passing assets to your spouse. You should have one for her as well passing her solely held assets to you. Any joint ownership should pass unhindered. You should check for guidelines in you state of residence as well. IRA and 401K's create some complexity since there they have not been taxed in some cases. That can be addressed by distribution over time but there are still some taxes due.

I would go for the $670 deal and get all your questions answered. It also is good to review every five years or so because state and fed guidelines change and little gets into the news.

[Hugh R]

Had a living trust done 25 years ago when my daughter was born. Had it re-visited about two years ago.

[MBAtarga]

Wife and I had new wills/trusts set up a few years ago- $1200.

[MST0118]

I'm an estate planning attorney in California. For a normal revocable living trust, pour over wills, powers of attorneys, deeds, I typically charge about $1,800 to $2,500 for a married couple, so $670 is a good deal if it is done correctly. I agree that for many people it is not the estate tax that comes into play, but rather avoiding the probate process (e.g. probate fees, length of time, lack of privacy, etc.). Good luck on it.

[dan88911]

I have a living trust I suggest finding a good lawyer if you decide to get one. That being said here are some points from a periodical.

'Living Trust can be an excellent estate planning tool for managing your property in case you become incapacitated.''

"A trust isn't needed to protect assets from probate.
You can arrange for most of your valuable assets to go to your heirs outside of probate. A home or other property that's owned jointly with the right of survivorship goes directly to the joint owner when you die. Likewise, pensions,retirement accounts and life insurance policies automatically transfer to the beneficiary. By setting up payable -on-death accounts, recipients have immediate access to money in bank accounts. And more than a dozen states allow transfer-on-death deeds for real estate."

You may want to ask an estate-planning lawyer whether a living trust fits your needs.

[Crowbob]

Transfer on death deeds for property, beneficiaries for retirement, savings accts., simple will for miscellaneous.

Joint ownership can be a problem if the joint owner gets in trouble. The jointly owned property is exposed.

[Scooter]

I am an estate planning attorney in Washington. $670 for a trust is cheap. I am sure it does not include all the ancillary documents like powers of attorney, etc.

A trust really doesn't have a lot to do with how wealthy you are. It has everything to do with ease of transition upon incapacity or after death.

[LakeCleElum]

Recently paid about $2,500 for all of that......

Of course, it includes what to do with the factories, 100's of employees, Off-Shore Drilling rigs, accounts in the Caymans, fleet of Limo's, butlers, Playboy Bunnies, arranging the arsons of the "Titty Bars", buying out Bill Gates and those little details.....

[Porsche-O-Phile]

Parents just set up an irrevocable trust - in their state this is required to protect assets and ensure access to Medicaid (you need to become "impoverished" and show no assets in your name otherwise the nursing home takes them all). A revocable trust isn't viewed as putting assets sufficiently out of your control to protect them from the Medicaid assessment. Check with a lawyer in your state for specifics of what you need. You do NOT want everything going to a nursing home or assisted living facility, you want it going to your beneficiaries / heirs.

[berettafan]

Just be sure to use an Az atty as estate planning outside of federal tax concerns is a state by state deal.

It seems obvious but many folks don't know what they want to happen when they die. If you take the time to list your assets and liabilities and decide who gets what you'll have a much more efficient conversation with the atty and you'll be better able to avoid buying services and documents you don't need.

Planning for possible nursing care is another piece that is often neglected. I would encourage you to consider long term disability coverage (which you may or may not already have) as well. It may prove to be too costly but you should at least have a brief conversation about it as part of your planning.

[Noporscheform]

I am not an attorney, nor did I sleep at a holiday inn last night, but a few years ago I ran into estate planning/gift tax issues that affected a client with a non citizen spouse. Not sure if that affects your situation.

I advise all clients to meet with an estate planning attorney immediately after we complete financial planning. This is to ensure the client has reviewed all options - living trust, wills, revocable trust etc. I also have the attorney provide specific advice concerning style of accounts (transfer on death, rights of survivorship etc.), beneficiary designations etc.

I have met some attorneys that are very good at providing explanations of the options for clients, work well with them etc. I have also been with some attorneys who were above having to describe options to the client, they know best. I urge the client to fire the second type of attorney.

[Noporscheform]

The idea of having people Manipulate their finances in order to shift their personal obligations (long term care) to Medicaid is offensive.

[72doug2,2S]

I'm surprised attorneys haven't outlawed these trusts. Why do you want to take valuable probate fees away from courts and hard working attorneys? They have families and mortgages too.

That said, I think $2,000 is a going rate on the east coast.

[Porsche-O-Phile]

Originally Posted by Noporscheform

The idea of having people Manipulate their finances in order to shift their personal obligations (long term care) to Medicaid is offensive.

The idea of Medicaid itself is offensive but since it exists and we're forced to subsidize it for our entire lives with taxes, why not avail onesself of it? Any estate planning attorney will advise this.

Do you want your assets going to a nursing home (an industry which has heavily lobbied state legislatures for years to establish punitive "seize everything" laws to line their pockets) or worse still - to the government via probate? Or do you want YOUR things going to your heirs as YOU choose?

There's a time and place for ideology and there's a time to look out for yourself as one person pitted against a very unfair and well-funded system.

[widgeon13]

Originally Posted by Noporscheform

The idea of having people Manipulate their finances in order to shift their personal obligations (long term care) to Medicaid is offensive.

The system enables it. Why be offended?

I felt the same way you did ten you years ago when my mother went into a nursing home. She is 100 yo now and all I feel is naive. You do the math any way you want, it's not cheap by a long shot.

[MRM]

It's not something you should try yourself, even using preprinted forms and internet help sites. Living trusts are more complicated than a simple will. Both a will and a living trust can do more for you than simply transfer assets upon your death. People who do their own wills create jobs for lawyers. I hired an estate planning specialist to do my family's estate documents and it was money well spent. You should take advantage of the reduced fee you apparently get from your prepaid legal plan and do it right.