Meeting with Estate planning attorney- how to prepare?

My wife and I are meeting with an estate planning attorney this week.
Primary issue is getting a will done. Will and living will to be
specific. We also have some estate planning questions. I'd like to
bounce 3 questions off the board, and look for issues I don't know
about yet.
Lokking for both questions an attorney will ask us (I assume accounts
and other) and questions we should ask attorney. In an effort to go
in prepared, here are questions we are asking. If you know answers,
or what additional information is needed to ask a better question,
please let me know. State of Ohio, if that matters.
FYI- I have legal insurance through my employer which expires Dec 31.
There is a need to get some things done quickly. And my wife is
preganant with twins due in June.
1) We have life insurance monies+401k+IRA+house equity with other
spouse as beneficiary. In event both of us pass, we have discussed
who gets this money between now and June. In June, what is best way
to pass this money to children (to their new guardian, trust or other)
1a) we are unsure if we can write beneficiaries in which are not alive
yet. We are also unsure if we can create a trust now for kids which
are not born yet.
2) If the money in #1 suggests that penalties will be incurred, the
legal insurance does not constitute tax planning. Could someone shed
some light on if this issue is coming into play? What is "estate
planning" and how is that different from "tax planning"?
3) In general, when are trusts used, and is their a recomended asset
size for the trust? If both wife and I pass at same time, the estate
size would be ~750k including 2 life insurance policies being paid,
plus retirement accounts for both spouses. Remember we are having
twins, so that money gets split in half...
Reply to
You probably could get good help from The following is not intended to be legal advice, as I am not a lawyer.
You might consider whether to go with a revocable living trust rather than a will. If you fund the trust will all of your assets, ideally your estate can be settled after your demise without probate. A simple pour-over will can direct any assets not in the trust upon your death into it. There is some uncertainty on the future of the estate tax, but if it comes back at the level of a few years ago, a trust with the AB provisions can minimize future estate taxes. Another advantage of a revocable living trust is that if you become unable to manage your affairs, a new trustee can be appointed according to the terms of the trust, rather than someone having to go to court to have you declared incompetent and made a ward of the court with a conservator or guardian. (This was a huge benefit to my brother and me when our mother began to suffer from dementia. We did not have to humiliate her to have a successor trustee take over her affairs.) The downside is that a trust costs more and is a bit more complicated to manage.
If you go with a will, it could be written to establish a testamentary trust, which is a trust that becomes active after the last of you and your wife die, to provide for your minor children until the youngest reaches the age of majority. This can be written to include all of your future children, as it is not necessary to list them by name.
The rest of the package could include durable powers of attorney, which remain in force even if you become disabled or incapicated, and directives to physicians, where you instruct your doctor as to the treatment you want if you have an irreversible and terminal condition.
One thing you need to know is what assets pass by beneficiary designations. These will fall outside the control of your trust or will, so you will need to coordinate the beneficiary provisions with the rest of your estate plan.
Reply to
Dave Dodson
Dave Dodson gave you very good advice.
I just went to an attorney for the "Cam Gere" Revocable Trust this year. You will want to have all your Bank and Broker assets including account numbers. My attorney charges $400/hour, so the pointless story I told that took 15 minutes cost me $100. My attorney does have a view of the Transamerica Pyramid worthy of a television show.
Estate planning describes the distribution of your assets when you die. Tax planning minimizes your taxes now and in the future. Estate planning (trust) can affect your taxes (A/B turst), but is not really a tax shelter. Estate planning involves correctly titling your assets and very, very carefully naming beneficiaries whether they are in a trust or not.
Beneficiaries (such as your IRA, 401K and insurance policy) get the money before your will or trust comes into play. It is incredible to me that your current wife has no interest in your house/401K/IRA. If you leave money to a beneficiary you can't then tell them what to do with it in a will or trust. It is theirs. If you live in your house another 15 years, it all goes to your former wife? You can name a guardian/trustee in your trust for your children for college or until then become 21, 25, 30 or 40 as you please.
In California an estate over $100K must go through probate and can take a year or more to settle. A trust avoids this as it doesn't die when you do, so there is no probate. Your trustee has immediate access to funds for mortgage payments and utility bill, etc. I don't know about Ohio. California is a community property state so wives get certain benefits and trying to go against that is just asking for trouble. Ohio is probably different.
You may want to consider keeping your IRA out of the trust. This caused a lot of grief when I inherited one.
My estate planning included: "Cam Gere" Revocable Trust (Pour Over) Will of "Cam Gere" dated Jan. 1, 2007. Final Arrangements (one paragraph, burn, scatter and party). Trust Deeds for Real Estate titled into Trust Advance Health Care Directive for "Cam Gere" Durable Power of Attorney for Property for "Cam Gere".
Nolo Press has a nice book: Estate Planning Basics
Confirm everything with your attorney.
Happy Planning!
Reply to
"current wife has no interest in house 401k/IRA"- where did that comment come from?
We each have 401k/IRAs with other spouse as primary and different people as beneficiaries. My accounts are about 8-10X her value... as I have been investing much longer.
Reply to
I am not a lawyer, but if you have (or will be having) young children you need to think about legal guardianship if both of you dies before your children become legal age. The question of who should be the legal guardian is a huge one. One of your parents? siblings? Or best friend?
Reply to
follow up to this:
Our attorney suggested she would only create trusts for children which were named. In the event we need to take care of kids with life insurance monies, she suggested a trust which would provide for kids is the right way to go. One issue she suggested is that if "unnamed" children were the benefits of a trust, it's possible a family member could contest the trust in court, and she suggested to avoid that situation.
The end result is we will create a trust to take care of both kids (twins) when they are born in June.
Here's a question- can a trust be "invested" in something? $600,000+ seems like a lot of cash "to just sit there" waiting to be spent.
According to some easy numbers- $75,000 to cover "housing allowance", as the new guardian lives in a much smaller house that would not be able to accomodate their current family size plus two more kids, then $28,600 per year to care for kids ($550 per week). Assuming the remaining principal is invested in something yielding 3%, there would still be 200k left at age 18 for college or kids to start adult life.
Have any of you dealt with distributing proceeds of a trust and how to plan for the disbursement of funds to minors? Comments on above?
Reply to
If you are talking about a testamentary trust, it wouldn't b funded now. It would be created at your demise and funded from your estate when it is probated.
If you are talking about a revocable living trust, you should immediately fund it with all of your assets that don't pass by beneficiary provisions. Depending on the language of the trust, you can go about your normal buying/selling/investing activities with assets in the trust instead of in your own name. E.g., you can transfer your house and your bank, brokerage, and mutual fund accounts to your trust. If you later want to move, you, as trustee, can sell the house and buy another. If you want to take money from your investments to spend on a vacation, just do it. When you pass away, a successor trustee seamlessly takes over, and continues to manage the trust's activities.
If you are talking about a trust fund, that's outside my area of knowledge.
Reply to
Dave Dodson
Once the trust is actually "funded" it probably should be invested in something. Corporate and endowment trustees have come under increasing scrutiny for not properly investing large cash balances. Trustees have a fiduciary duty to act in the best interest of the beneficiaries of the trust. What exactly that constitutes is still a VERY grey area.
Even if you want to be cautious you can still go with TIPS, treasuries, or money market.
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