Estate Planning, wills, etc....

iVillage Member
Registered: 03-27-2003
Estate Planning, wills, etc....
7
Sat, 05-27-2006 - 3:39pm

How many of you have your affairs in order as far as this goes? I was reading Suze Orman's 9 Steps to Financial Fitness yesterday and she spends a significant amount of time discussing wills, trusts, why you should have a trust instead of a will, and all of that. At the moment, I have neither. I am a single mom, one child, just turned 40. I really should get this done. I was just wondering what experience any of you have had with this, what you learned, what to look out for, stuff like that.

And someone please, please tell me that haven't gotten around to doing this either so I don't feel like the only unorganized person in the room.

Heather

iVillage Member
Registered: 09-20-2004
Sat, 05-27-2006 - 4:23pm
Hi. You are not alone.
We have all of our assets joint with survivorship or POD, but don't have a will because we have no idea who we would want as the guardian of our kids. This is the biggest issue. I took a probate law class, and the prof, a probate judge, didn't have a will for the exact same reason. Anyhow, stuff with PODs bypasses probate anyhow.
I do wish we could settle this important issue, though.
Heather
iVillage Member
Registered: 03-25-2003
Sat, 05-27-2006 - 5:02pm

We set officially set ours up about 2 years ago. You would think ~ being an attorney ~ I would have done it sooner but nope!

We had a very hard time with guardianship but our thinking was that we'd rather have it decided and laid out in a will than have a judge/the state make the decision . . . or have people fight over it.

Good luck with your decision ~ I know it's hard.




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iVillage Member
Registered: 03-29-2006
Sat, 05-27-2006 - 6:56pm

DH and I have talked about it may times since we first married and I worked for an attorney that specialized in wills/trusts/estates. However, as been said, the guardian issue bothers us to, but is because we want our five to stay together and no one really wants to step up to the plate on that.... We do know that our families would be there for our kids if anything were to happen, but no one committs to paper. Probably won't undertake this task for a while when we don't have to worry about guardianship.

Although, we have made it so that all paperwork anyone would need is in one place. So we are prepared in that regard.

Michelle

iVillage Member
Registered: 01-06-2006
Sat, 05-27-2006 - 7:08pm
What is POD? We (fiance and I) own vacant land, joint tennants with right to survivorship. Other than that we have no assets of value and I have no children. I have life insurance through work which goes to my brother and my fiance gets the proceeds of 401K. No one will get rich, that's for sure.
Pam

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iVillage Member
Registered: 12-12-2004
Sun, 05-28-2006 - 12:53am
Hi, heather. Well, I think it is a matter of preference and choice. After DH and I got married, we got a simple will (dont know where it is!). However, circumstances may change. We do have living wills, durable powers of attorney for healthcare, so in case something happens, our wishes are respected. DM has everything in place, living trust, estate planning finished, final wishes drawn up, so there is peace of mind in having this done. WHiz.
iVillage Member
Registered: 05-09-2002
Sun, 05-28-2006 - 7:45pm
I work for an estate planning company but the planning we do is for extremely wealthy individuals (very ironic as given my situation and that everything I own pretty much fits in my Jeep!) however all of our clients have trusts to own life insurance so it passes to their children tax free. I mean, they sometimes have a $50 million estate, but still, I think it might be a good idea depending on what you have. I think pretty much everyone thinks about wills and wishes, however I don't see alot of people talk about trusts and I know you mentioned that in your post. If you are trying to make sure your children are finanically taken care of once your guardianship decision is finalized, this might be an option to look into. I know alot of people have small life insurance polices through their companies, however if I ever get married, I want my husband and I to have term insurance on each other and if we have children, I want to have surviorship insurance instead (passing to children at the second death). In the future I plan to take out a $500,000 policy on myself for the benefit of family so it can pay the debts and be income replacement as well. I'll admit I have yet to figure out if the cost of establishing a trust is worth it for a lower income individual like myself, however I think its food for thought for those with children. Since you are single, perhaps a good term insurance policy might give you some peace of mind. (I hope I don't appear morbid and bring down the thread - I deal with life expectancy charts, etc., everyday at work so I forget its not formost on everyones mind lol)
iVillage Member
Registered: 03-17-2003
Mon, 05-29-2006 - 12:45am

What a great post. I have some things to throw out there.

When deciding who would be guardian of the children, it was important to me that whoever was named (with their permission) would raise the kids as their own and not as second class citizens. KWIM? Sure relatives love your children, but who would make sure your child was 100% equal to their own? Would the named guardian make sure the kids went to college? I also did not want the kids estate squandered. You don't necessarily have to name your sister or brother. For us, the first couple that came to mind was who we named. The decision was a hands-down-slam-dunk. In the end the ones we named were not relatives.

I also had matters set up that in the event of our demise there would be money immediately available for the guardians to use for moving, housing and getting the children settled in. Can you imagine the out-of-pocket expenses just to take in another's children? The money passed to the guardians outside of probate (a tax attorney / probate attorney can advise on mechanics).

If you are divorced, the other parent may have legal rights to assume full physical and legal custody. In this case, you may not have to decide who would be guardian. The decision may be made for you. This is something to discuss with your ex, if possible.

Once you have the guardian for the minor child(ren) settled in your mind and heart, you then think of who you want to name as the executor of your estate. It might be the same person as guardian, or the same person as trustee (if you have a trust set up -- some estates just move the assets into a trust, which will be for the benefit of your beneficiary).

Most of us are not megabuck estates. No matter what we have, we want our loved ones provided for after we are gone. Makes no difference if you are an heiress to the Corning Glass fortune or have your humble home you want to go to your one and only child. We want to insulate what we have from getting eaten up with taxes and expenses of our last illness. There is something for everyone and every situation. The peace of mind is wonderful.

Also think about getting a Durable Power of Attorney for Healthcare. Very simple document. You can have whatever you want. If you want all heroics to keep you alive you can do that, or if you want you can be quite specific and say to let you go and use the money that would have gone to doctors, hospitals, hospice and everyone else for a big party in your honor. LOL. I hope the levity doesn't offend anyone. Nevertheless, it is a delicate and highly personal decision. Often times a wife grants her husband power of attorney and if he should predecease me, then another individual is named (maybe an adult child or other person who knows your wishes and is willing to serve).

Driver's license: if you are interested in being an organ donor, be sure your driver's license has the notation and your Durable Power of Attorney for Healthcare. Including your desire in your Will won't help. Your Will is good for naming recipients of gifts and personal effects, not your organs.

Life insurance will pass outside probate to the beneficiary (primary and secondary). Again, no big deal. You just want to make sure your policy is adequate.

If you have real property and children you will want to discuss setting up a trust. There are various trusts to insulate your estate from taxation. How do you decide? My advise is you don't. Let a qualified estate planning / tax lawyer review your full situation and advise what will work best for you. Take your time and find out as much as you can. You aren't in a race. Take your time. Everyone is different and what I have may not work for you.

I think if the idea is on your mind maybe it would be good to call around and see if you can get a free consultation with a lawyer. It really is money well spent. If your estate is modest and your children are grown, you may be able to have a simple will and change ownership of your property and various accounts and/or investments, and make sure your life insurance policy/policies will do what you want them to do and provide for those whom you want to provide. There are some situations where you can even take care of your matters without a Will. My advise is to talk to those who know the legal angles and can make sure your wishes are squared away.

It really is not as complicated as it may sound. Plus having your affairs lined up so your child is provided for is a wonderful feeling.

Hope this helps.

Carolyn