Wills vs Trusts

Hello... my husband and I just met with a lawyer yesterday to finally put a will in place for our children. Well, we left a bit confused and torn. He explained (a) Wills and (B) Trusts. It seems like trusts are better in that your wishes are "final", nothing goes into probate, etc. However, they are a lot more expensive to draft and I believe they may have yearly fees. What does everyone have? Do you have a will? Trust? What fees are associated with both? Any information would be greatly appreciated.

 

I'm a lawyer, but not an estate lawyer....so what I know is actually pretty darn limited on the subject. But here's my two cents: Just be sure you have one of them, whether it's a will or a trust!!!

The big concern for us is knowing that our kids are taken care of, right? Well, with either a will or a trust, you get to name who you want your kids to go to if you both die. You also get to be sure they get designated as the beneficiaries of your money. Either a will or trust can do that for you. Yes, technically it will happen anyway, whether you have a will or not...but my understanding is that it will be a lot more time consuming and expensive for your survivors if you have no will or trust in place. In other words, if you die without a will, eventually the courts will get your kids to an appropriate guardian and they will get your kids all of your assets....but the key word is eventually!

If you have a will, yes it still has to go through probate, but it is otherwise a pretty automatic process...no decisions need to be made by the courts, because you will have already made the decisions and put them in your will.

A trust is even more automatic than a will, because everything is basically already done before you die, so there is no need to even go through probate. But you're right, the downside is that it's more complicated and expensive while you're alive!

So again, I will say that you should be sure you have one of them, whether it's a will or a trust. If a trust seems too complicated, then don't worry about it and do a will instead. That's what we did! I know that someday I would like to have a trust, but it was just too much for me to think about right now. So rather than go longer without either, we went ahead and did wills and may revisit the trust issue someday. A trust might be a little better than a will, but a will is a lot better than nothing!!

 

Forgot about your fee question. There is no yearly fee for a will (unless the lawyer wants to charge you something to review it each year, but that is not required, it's just a way for we lawyers to get more money!). You do a will once, and it's done unless you want to change something. Just be sure to stick the original someplace safe (preferably in a lock box in your house, because who wants to go trudging to a safety deposit box after your daughter/sister/mom/friend just died?) and let your loved ones know where it is.

I have no idea about yearly fees for a trust.

 

We are supposed to be working on our "Will" and it got to be taken care of this year! We will let our closest friends know where the fireproof/lock box if anything happens to us. We have no families left on both side of the us. The twins will have each other.

Diana w/Rianna and Justin

 

We have a will. My husband and I were going to change it to designate guardians in case both of us die, and our lawyer said that just a signed sheet of paper with our wishes is sufficient. Just as long as it is put with our will, it's fine. And we can change it should we need to without dealing with a lawyer or changing our will.

 

Okay so my mom is a Trust officer so i thought that i would get her imput and this is what she said!
If you die before the kids are age 18, your life insurance proceeds would go in to a court supervised conservatorship, with either a trust dept or sometimes an individual named as conservator. The downside of that (if you have alot of insurance proceeds or assets), is once the kids attain age 18, the money is theirs to do what they want to do with it. And experience shows 18 year old boys (especially) will blow the money on fast cars and partying. Not many 18 yr olds can handle getting hundreds of thousands (or millions) $ without it being detrimental to their well being. Conservatorships also include annual fees.

With a trust you can determine when they get the money, age 25,35, 50, 60, whatever you decide. You can give the trustee discretion to distribute from the trust for things such as health, education, support and maintence (those are standard guidelines), the purchase of a home, getting started in business etc.

Having someone named in your will that you'd like as guardian does not guarantee the kids will go to that person. It helps the court to know your wishes, but it still has to be approved by the court to obtain legal guardianship.

 

We will be putting together our trust here in the next few months. The estate lawyer that we will be using will cost us approx. $1000. BIL paid $3000 for his but he is a prive practice dr and has business mixed in. My dad had his trust with the lawyer we are using. As for yearly fees there are none. Except if we want to change something. Then I think it is something like $300 for each change.
HTH
Cari

 

We have a will. We also have put on everything that our contingent beneficiary is the "Estate of Jereme and Diane ...." So, how ours is set up is that my sister and hubby will be guardians of our children until age 18. My father acts of the conservator of our estate. What that means is he allocates a monthly amount to my sister of money out of the estate for the care of our kids. We were able to designate that at age 23 the kids will receive 25% of the bulk estate. They will come into the rest of the money in the estate at age 28. Of course, my dad can pull money out as the conservator to pay for their college, etc. We chose to wait until a later age for them to come into the money so they would be sure to go to school and "make their own way". Hope that helps!

 

QUOTE(ksugal @ Feb 7 2008, 01:01 PM) [snapback]610832[/snapback]
We have a will. We also have put on everything that our contingent beneficiary is the "Estate of Jereme and Diane ...." So, how ours is set up is that my sister and hubby will be guardians of our children until age 18. My father acts of the conservator of our estate. What that means is he allocates a monthly amount to my sister of money out of the estate for the care of our kids. We were able to designate that at age 23 the kids will receive 25% of the bulk estate. They will come into the rest of the money in the estate at age 28. Of course, my dad can pull money out as the conservator to pay for their college, etc. We chose to wait until a later age for them to come into the money so they would be sure to go to school and "make their own way". Hope that helps!


We have a similar arrangement. This just clarifies that (while a trust is still probably cleaner, as I said earlier) a will can also give you the possibility of portioning out what your kids get and when. Having nothing means they'll get it all at 18, but either a will or a trust can change that. To get really technical, what we actually have is a will that creates a trust for the kids upon our death. A living trust would probably be even better, but like I said earlier, this is all we can deal with right now and at least we know they're taken care of!

 

This is on our list of things to do for 2008. We currently have neither a will nor a trust.

 

We set up our first will right after the girls were born. We used LegalZoom.com and loved it. We've used them for other legal services as well. They make it quick and inexpensive to get a complete will. The trust arrangement mentioned above was included in ours.

 

QUOTE(Ali M @ Feb 7 2008, 11:34 PM) [snapback]612193[/snapback]
We set up our first will right after the girls were born. We used LegalZoom.com and loved it. We've used them for other legal services as well. They make it quick and inexpensive to get a complete will. The trust arrangement mentioned above was included in ours.


My colleagues would probably not be too pleased with me saying this, but unless you have something complicated about your estate, something like legalzoom.com makes a lot of sense. If you go to an estate lawyer and just want a basic will, all they're going to do is pull up their standard form and insert your name and a few other details...and then charge you lots of money for it! So if the reason any of you don't have a will yet is because you don't know an attorney or don't want to pay for one, use legalzoom.com or some other similar service! Maybe down the road when you've amassed your fortunes, you'll want to pay money for a real, live person to look at your specific situation....but until then, a standard form is fine.

 

We have a will, but if something happens to us before the kids are 25, most of the money goes into a trust, to be overseen by my sister, who would get the kids if something happened to us before they are 18.

Even that was available in the CD we bought - WillmakerPro I think it was.

 

I voted trust, though we don't actually have one yet -- we're signing the papers next week. Our lawyer made it sound like a trust was a lot easier for the surviving spouse or the executor.

 

I think our will includes a trust?? We did it right after the babies were born. I agree with the PP though, we probably would have been just as well off doing something like legalzoom. I think we paid around $600, and seriously, all the attorney did was fill in the blanks of some promulgated form. She was our friend, and I think it made us feel better to go to a "real" attorney, but probably was a waste of money in restrospect.

 

We have been discussing the idea of making a will. Thank you for posting the link to legalzoom.com cause although I cant use it (we're not in the States) it gives me a lot of understanding about what we need to decide on before we make the will.

One big question - once you've decided who will be the 'guardian' or 'trustee', I guess you have to ask them if they agree to?
I guess that will be the hard part for me, deciding on whom and then asking them.... No one wants to die early but we want to make sure our children are protected....

 

We have both ...I voted will because I think if you are only going to have one I would get a will. Anyone with a child should have a will - it is where you designate guardianship of your children if both parents are deceased. My understanding is that the will designated guardianship & the disbursement of assets. We elected for all assets to go to our trust for our children. The trust will go in to effect if one/both of us die - the proceeds of the life ins will go there and any proceeds from the estate if we both die. The trust administers the funds. You designate a trustee to administer it who can charge the estate a fee - there are no ongoing, yearly fees to have the trust at this time, only if there are funds in it and the trustee elects to charge the fee. The surviving spouse will administer the trust - and obviously not charge a fee to the trust. My brother who is a lawyer will administer the trust if we're both gone. I don't have a problem with him being paid a reasonable amount for his time. My sister will have the kids - will be great with the kids, but terrible with $$$ no way would I want her to have unrestricted access to that much money. She will need his supervision!!

 

Don't forget about life insurance for everyone. A lot of people only think they need to cover the spouse that is working but stay at home moms provide a service that would otherwise need to be paid for and daycare can be very expensive. Especially if it hasn't been part of the budget.

My husband used to sell life insurance and one day one of our dd (who was like 15 months) was wheezing. The doctor told me to bring her in so they could check for asthma. My husband started freaking out that she couldn't be labeled with asthma yet because we hadn't bought life insurance for them and once she had that label her life insurance rates would sky rocket. She didn't have asthma and the next day we had life insurance on both girls to prevent any pre-existing condition issues.

Just something else to think about.

Don't forget about life insurance for everyone. A lot of people only think they need to cover the spouse that is working but stay at home moms provide a service that would otherwise need to be paid for and daycare can be very expensive. Especially if it hasn't been part of the budget.

My husband used to sell life insurance and one day one of our dd (who was like 15 months) was wheezing. The doctor told me to bring her in so they could check for asthma. My husband started freaking out that she couldn't be labeled with asthma yet because we hadn't bought life insurance for them and once she had that label her life insurance rates would sky rocket. She didn't have asthma and the next day we had life insurance on both girls to prevent any pre-existing condition issues.

Just something else to think about.