Get a Will and Keep it Updated

[Dr. Cadmium]

This subject has seen minimal discussion on this forum, but it's very important. There is much discussion here of accumulating wealth and storing it, but little discussion of preparing for the worst case scenario of one's demise (other than the occasional joke about one's widow dumping depositing their silver coins at the bank or dumping their bulk coppers into the Coinstar).

You absolutely need a will, and to update it regularly. I offer three anecdotes from my own life over past few years:

1) An older relative with a wife, kids, and business was scheduled for life threatening surgery and did not survive the operation. They had no will, and their assets have been tied up in probate for years. Their widow was left with a mountain of paperwork to untangle.

2) A friend's only surviving parent was diagnosed with stage 4 cancer and died a year later without updating their will! The original named executor of the will is estranged from the family, and as a result the two siblings are fighting over the house and money, both legally and physically. The whole mess could have been avoided had an updated will existed, and the deceased had plenty of time to do some estate planning.

3) A distant relative passed and had several firearms in their possession. Their immediate relatives cleaned out the house and didn't know what to do with the collection of firearms, so they turned them over to the police. Among these was a Colt King Cobra, which sells for about $4,000 right now.

So the next time you're prepping, update your will. Don't leave a mess for your friends and family to deal with, and don't let your lifetime of hard work and investing be consumed by probate.

[Chaboo]

Good topic.
Can you add any recommendations? Thoughts on trusts, etc. Online versions ok if pretty generic?

[ScrapMetal]

Having both parents die in the past few years, I have horror stories to tell even though both parents had wills. As Dr. Cadmium pointed out it is extremely important to pick an executor (now called Personal Representatives) that is 100% trustworthy and has no issues with the heirs named in the will.
My younger brother was executor in both my father's (died first) and then my mother's will.
Both were nightmares where I truly believe money was diverted and now without any doubt stolen from at least 2 of us siblings when the house was finally sold, he just kept ALL the proceeds ($120,000) on a house valued at $175,000. Lots of crooked things happen in a will, and the law does very little to protect anyone, except the executor who is a sworn agent of the court who is entrusted to legally administer the will and follow ALL laws. HAHA, ask me how that has worked out.

[Lemon Thrower]

executor = personal representative depending on the state.

The will maker software is OK if you have something basic. The problem is it doesn't tell you what you don't know.

So lets say you own a house outright, and you have a wife and a teenager. You probably want to leave your property to your wife.

But if you get divorced, as Cadmium says, you need to update your will!

Also, do you really want a teenager getting that sort of money? Instead, what you want to do is set up some sort of trust. If you are not a millionaire, that means paying it to a trusteee, like a sibling or friend, who then doles it out in accordance with your instructions.

Another key thing about wills is you need to give the executor a road map. You have a brokerage account at xyz? OK, does your executor know that? You have a thousand dollars in pre-82 coppers and wheats that looks like a crap ton of pennies to anyone not on this forum. No lawyer or software is going to be able to save you the work of giving instructions to your loved ones.

[knibloe]

My dad passed away a year ago. In learning from that experience I would give two pieces of insight.

1. You can name co executors. Originally, my dad had my brother listed. I convinced him to add me as well. That did two things for us. First. If my dad had passed 10 years ago, I would not have trusted or believed my brother and know 100% that my dads true wishes would not have been met. Happy to say my brother and I are in different places and it probably would have been fine if he was sole executor. The second reason that it worked out for us is that my brother and I shared the load when dad passed. We made the decisions together. We divided up tasks and took them on together and it really brought us closer together.

2. Learn about your states Estate Powers and Trusts Laws EPTL. They supersede a will. Those laws dictate what assets pass outside of probate to the surviving spouse. In NYS it is about $92,000 that immediately passes to the spouse and in most cases cannot be touched by probate: cars, bank accounts, personal effects... This caused a bit of a mess for us. My dad left everything to us kids, not his 4th wife. However, EPTL laws dictated everything go to her. We started with the division between us kids, were told to stop by a step brother due to EPLT, our own lawyer told us we had to follow EPTL. Then our step sister stepped in and gave us a copy of the prenup where the both waived EPTL before they got married.

[Changechecker]

Great advice. If you don't already have one a good attorney should be able to draft a will for $300.00-$400.00. Make sure to keep your own copies and review regularly to update as necessary.

[Recyclersteve]

In some cases a basic will is enough. I had a great aunt who died over 10 years ago. She had no debt, but little in the way of real assets. Her house was paid for, but she died when the market was in the toilet (2009). I was the executor of the will and sole beneficiary. Nobody else disputed anything because it wouldn't have been worth it. She didn't even own a car when she passed. So in that case I bought the paperwork at an Office Max type place. That was all that was needed and everything went smoothly.

I realize that often times things will be MUCH MORE COMPLICATED and a trust might be necessary. I must admit that I get confused about the different types of trusts and am not fond of the term "irrevocable". I'm human and there is always the possibility that I could make a mistake and want to have the trust be revocable.

[Lemon Thrower]

The kind of trust I was referring to is a testamentary trust, which means it springs into existence upon the person's death.

Its also called a spendthrift trust, because its designed to limit the beneficiarie's ability to blow the entire inheritance quickly.

Revocable and irrevocable usually refer to trusts made during one's lifetime, also called inter vivos (during life) or a living will. There can be reasons to do this that are tax related or because you want property to pass directly without probate.

Similar to an inter vivos trust is a joint bank accounts. If you are joint with someone on an account, and they die, in most states the entire value goes to you. So be careful if family members have powers of attorney or joint accounts. Sometimes these can be helpful but they can often result in assets being diverted. As an example, think of an elderly woman with 3 kids and a large bank account. Her will says the money should be split evenly among 3 kids. But Only 1 kid is joint on the bank account. In most states, first kid gets the entire bank acount, plus one-third of everything else, and the other 2 kids get one third of everything other than the joint bank account.