justme
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Post by justme on Nov 9, 2019 0:27:04 GMT -5
At what age do kids not need a guardian anymore? Is it 18 or 21? I'd think it has to do with 1) how much money and 2) how well or bad that are with money. Technically they could get it all at 18, but giving kids that young hundreds of thousands of dollars at that age is stupid. 10k, meh let em blow it. I think my parents had my mom's sister in charge of money until we were mid 20s? I'm personally super single so right now my parents are beneficiary on half my assets and the other half would have to go through probate. Between work sponsored life insurance, 401ks, bank accounts, and condo equity. It's at least 300k with about half straight to them and half through probate. They have other assets to so they'll figure it out somehow. If I could make something legit to leave my nieces money without paying I would, but at the moment it'd get to them anyways at some point assuming my bro doesn't go on a huge spending spree lol.
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NancysSummerSip
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Post by NancysSummerSip on Nov 9, 2019 13:00:11 GMT -5
Having ours done next week. Wills and DNR and power of attorney. Trust vs no trust is something we will discuss with the attorney. Our estate is decent but not huge. We have no kids, and DH has only his alcoholic sister as a relative. I have brothers (one who will be executor, along with my niece) and one who has no say and will inherit nothing. Both have kids: I am fine with two of the girls inheriting, but not the other three ingrates. What each of us has goes to the other at death; when the surviving partner dies, the will dictates what happens to our possessions (houses, cars and bank/investment accounts) and who gets what, including charitable bequests.
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Deleted
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Post by Deleted on Nov 9, 2019 15:59:25 GMT -5
Ple ase, use a good attorney and get help necessary to make good decisions.I second and third and fourth this suggestion. When DH#1 died all we had were simple wills written 20 years prior. It took 18 months and headaches to get things settled and this was without going to court. The atty handled everything as it was a small estate ........ but a huge headache. If you don't mind volunteering- what made it such a headache? I used Willmaker for simple DIY wills with my first husband; I knew he'd never sit down in front of a lawyer and this way we had something. I'd spent the summers in college working for attorneys who handled wills and estates so even though I was not in any way qualified to practice law I had an idea of what a simple will should look like. Just curious what complicated the estate settlement in your case. I now have papers drawn up by a real attorney- with a son, minor grandchildren and decent assets I don't want to roll the dice.
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Gardening Grandma
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Post by Gardening Grandma on Nov 9, 2019 17:44:41 GMT -5
We have wills. The house is held jointly with right of survivorship. The IRA accounts have designated beneficaries. The vehicles are jointly owned. So, unless we both go at the same time, it's unlikely the surviving spouse would have to deal with probate.
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tskeeter
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Post by tskeeter on Nov 9, 2019 17:48:59 GMT -5
The laws for every state vary...you should see an estate attorney to figure out what is best for your case as we are all different. Ga. can be weird. A hand written will that is notarize is legal here so no attorney is needed at that point, only after death to make sure all the proper paperwork is filed...but it has gone very quickly for the ones who were executors in all the cases I've known about. Unless the law has changed...in Ill. your executor can not live out of state. These difference are the reasons we all need to seek advice in our own states. I've had several people tell me it's too expensive to get a will, i charge $700 for a will/health care proxy/POA for a couple, $400 for a single. They tell me they're going to use LegalZoom. I've seen some very good wills done on LegalZoom. I've also made a pile of money from estate planning gone very badly via LegalZoom. I make no money when I charge a $50 consult to tell people to put their house in their kids name with Life Use to themselves, put a kid on the bank account, and have beneificiaries on retirement/insurance. Then I get nothing to do estate work because it's all done. That's what I did with my parents. I’m not a tax expert, or a family law expert, but isn’t putting the house into the kids name potentially problematic from a tax and risk management standpoint? Wouldn’t putting the house in the kids name with a life estate for the parents be considered making the house a gift to the child or children? As a gift, wouldn’t the house retain the cost basis of the parents, rather than receiving the step up in cost basis that inherited property receives? In many areas, the cost of homes has grown fast enough (a minimum of 10% a year for the last five years in our area (that’s $40K a year on an average priced home)) that the gain on a gifted house could exceed tax exemption limits. With houses, we could easily have a cost basis that was established 30 or 40 years ago. Also, assuming that the child owner of the house did not live in the house for several years immediately preceding the parent’s death, wouldn’t the child be ineligible for the capital gains tax exemption on the house? From a risk management perspective, wouldn’t gifting the house to children expose the house to all kinds of creditor risk? A child’s divorcing spouse could be awarded a part interest in the house? A child’s creditors could claim an interest in the house in a bankruptcy proceeding? As a partial owner of the house, could a creditor file a partition suit and force the sale of the house, even though Mom and Dad still live in the house? Is there a way for multiple generations of a family to hold title to a house that avoids the creditor risk while retaining the stepped up basis of inherited property?
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tskeeter
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Post by tskeeter on Nov 9, 2019 17:55:26 GMT -5
I make no money when I charge a $50 consult to tell people to put their house in their kids name with Life Use to themselvesBut doesn’t this mean that the kids will pay capital gains taxes on said house when it sells? yes. Or you can pay probate fees. You pay front or back. Sometimes they opt not to, exactly for that reason. You're paying capital gains tax on an asset that was given to you. I don't see that as a hardship. I think your perspective is typical of many attorneys. That heirs shouldn’t object to paying taxes because it’s inherited assets. As an heir, my perspective is different. Every dollar paid in taxes is money right out of my pocket. As the attorney providing estate planning services, I would expect you to help minimize the taxes on the estate.
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sesfw
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Post by sesfw on Nov 9, 2019 18:40:17 GMT -5
If you don't mind volunteering- what made it such a headache?Just the fact the simple will was at least 20 years old and state laws had changed. We also had more 'stuff' so the atty wanted to make sure of everything. ? A will has to go through probate or some type of official review. A trust is a 'pass through' without the blessing of the state. And it took 18 months to settle. So after all of this mess, I had all legal papers drawn up. Will, Living Will, POA, Medical POA, Revocable Trust. No way was I going to have our daughter go through the headaches.
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Deleted
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Post by Deleted on Nov 9, 2019 20:36:40 GMT -5
Reading this thread actually makes me want to run to an attorney’s office ASAP.
If I die tomorrow (heaven forbid!) my kids would have several hundred thousand dollars and a house. They don’t know that though lol. If DBF died tomorrow (heaven forbid!) it would all fall apart. Monetarily, I’m worth more dead than alive, he’s worth more alive than dead. It wouldn’t matter so much if we hadn’t commingled funds to buy and live in our current home, but we did...... and although I do have another house I could live in if it came to that, I’d rather live in our current home. Both houses have mortgages that I could pay by myself, but I wouldn’t have much wiggle room, and I’ve gotten use to having a certain amount of discretionary income.
I see some conversations with DBF in my near future. And I guess we need to sit down with an attorney sooner rather than later.
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MN-Investor
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Post by MN-Investor on Nov 9, 2019 22:04:38 GMT -5
I think your perspective is typical of many attorneys. That heirs shouldn’t object to paying taxes because it’s inherited assets. As an heir, my perspective is different. Every dollar paid in taxes is money right out of my pocket. As the attorney providing estate planning services, I would expect you to help minimize the taxes on the estate. A lawyer's obligation is to the person they are representing, not to their heirs. While they can certainly bring up the various costs involved with the different alternatives, it is the person they are representing who will make the final choices. When my husband and I last met with our lawyer, he talked about the fact that Minnesota is a high tax state. He, himself, was transitioning to retirement and would gladly move to a lower tax state, but since their grandchildren are here, his wife would never consider moving. My sweetie and I discussed the idea of moving to a lower cost state, but ultimately decided that we like Minnesota and one reason we saved so much was so that we could continue to live here. Since we have no children and none of our heirs expect anything from us, we have no obligation to change our life style in order to leave them more money. I understand swamp's perspective on the heirs paying taxes. Another way of saying it is that you are not inheriting a $100,000 estate. You are inheriting a $80,000 estate net of taxes. It's sort of like looking at the value of your IRA. Yes, I may have $100,000 in my IRA, but since it is all going to be taxed at ordinary income rates, I really only have $80,000 that I can spend on living. $20,000 will be going to pay taxes on it.
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swamp
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Post by swamp on Nov 10, 2019 11:13:09 GMT -5
yes. Or you can pay probate fees. You pay front or back. Sometimes they opt not to, exactly for that reason. You're paying capital gains tax on an asset that was given to you. I don't see that as a hardship. I think your perspective is typical of many attorneys. That heirs shouldn’t object to paying taxes because it’s inherited assets. As an heir, my perspective is different. Every dollar paid in taxes is money right out of my pocket. As the attorney providing estate planning services, I would expect you to help minimize the taxes on the estate. I give appropriate tax advice within my abilities and a referral to an accountant. I do what my client wants. Withun my ownfamily, I’ll willing paythe capital gains
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swamp
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Post by swamp on Nov 10, 2019 11:15:12 GMT -5
I've had several people tell me it's too expensive to get a will, i charge $700 for a will/health care proxy/POA for a couple, $400 for a single. They tell me they're going to use LegalZoom. I've seen some very good wills done on LegalZoom. I've also made a pile of money from estate planning gone very badly via LegalZoom. I make no money when I charge a $50 consult to tell people to put their house in their kids name with Life Use to themselves, put a kid on the bank account, and have beneificiaries on retirement/insurance. Then I get nothing to do estate work because it's all done. That's what I did with my parents. I’m not a tax expert, or a family law expert, but isn’t putting the house into the kids name potentially problematic from a tax and risk management standpoint? Wouldn’t putting the house in the kids name with a life estate for the parents be considered making the house a gift to the child or children? As a gift, wouldn’t the house retain the cost basis of the parents, rather than receiving the step up in cost basis that inherited property receives? In many areas, the cost of homes has grown fast enough (a minimum of 10% a year for the last five years in our area (that’s $40K a year on an average priced home)) that the gain on a gifted house could exceed tax exemption limits. With houses, we could easily have a cost basis that was established 30 or 40 years ago. Also, assuming that the child owner of the house did not live in the house for several years immediately preceding the parent’s death, wouldn’t the child be ineligible for the capital gains tax exemption on the house? From a risk management perspective, wouldn’t gifting the house to children expose the house to all kinds of creditor risk? A child’s divorcing spouse could be awarded a part interest in the house? A child’s creditors could claim an interest in the house in a bankruptcy proceeding? As a partial owner of the house, could a creditor file a partition suit and force the sale of the house, even though Mom and Dad still live in the house? Is there a way for multiple generations of a family to hold title to a house that avoids the creditor risk while retaining the stepped up basis of inherited property? It can be. We talk about those scenarios.
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Deleted
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Post by Deleted on Nov 10, 2019 13:29:58 GMT -5
I think your perspective is typical of many attorneys. That heirs shouldn’t object to paying taxes because it’s inherited assets. As an heir, my perspective is different. Every dollar paid in taxes is money right out of my pocket. As the attorney providing estate planning services, I would expect you to help minimize the taxes on the estate. I give appropriate tax advice within my abilities and a referral to an accountant. I do what my client wants. Withun my ownfamily, I’ll willing paythe capital gains That could be very expensive. In WI probate costs $2/thousand. So say a $250K house that appreciates to $500K. Probate would cost $1,000 and then the kids would walk away tax free on sale of the house at $500K as that would be their tax basis for a non-primary property. The $500K is below any federal/state (WI) limits. Now if that same person did what you say, then the basis would be $250K as a gift (so no taxes under total inheritance/gift laws), but now they kids have a $250K gain to pay as you don't get exclusions on non-primary properties. So even at the lowest tax bracket in Federal/State (WI) 12%/5.8% or 17.8% total ($44,500) would be your tax bill. Now assume an average rates 22%/6.2% ($70,500) and ouch, huge mistake. Glad I'm not your client! In WI lawyers seem to sell that a will/estate planning is so important as they seek sales, but they don't seem to be out for our best interest as from the example above, I'm not scared of having my estate probated. I have huge $$ in payable on death accounts that will then allow my beneficiaries to pay the carrying costs while waiting on probate. The carrying costs of my house/car for a whole year would only be ~$14K max and all would be pushed into even higher tax brackets than I showed above with a $250K capital gain. Finally, the big "sell" is that probate will share private information with everyone, guess what, property sales are also public, so any can see what the capital gain is just from the city web-site. Payable on death accounts don't go through probate, so my Probate outside of the house is less than $50K and most of that is a car (which again people can estimate the value really easily). I have no will, the state law with probate is exactly what my will would say anyway. No kids and if my beneficiaries just want to walk away and not deal with the hassle, they can and the state will take care of everything.
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lynnerself
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Post by lynnerself on Nov 16, 2019 1:54:54 GMT -5
Even though everything we own is either in retirement accounts or held jointly, we still have a will and a trust. Specifically we have bypass or A/B trust. This is to avoid Oregon inheritance tax when the 2nd spouse dies. Oregon has a much lower limit than federal. Of course we also have health care directives and health and financial POAs.
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Ombud
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Post by Ombud on Nov 17, 2019 22:41:22 GMT -5
POD / TOD on assets of value. Heirs get stepped up basis avoiding taxes. Personal items under California Small Estate Asset limit avoids probate
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skubikky
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Post by skubikky on Nov 18, 2019 11:43:56 GMT -5
We finally got the will done. So we have the will, something that avoids probate, if just one of us die, and a living will. We don't have a trust, mostly because I think we are too lazy to use it. I finally got the will done, because I didn't like the way my state would divide my assets at all. There were some weird rules that I did not expect. Pooks, in all of the states that I am aware of, a will does not keep your estate out of probate court. In fact, I believe that a will must be probated if the estate is larger than a certain threshold that varies from state to state. Those thresholds are so low that the estate of anyone who owned a house would be subject to probate. I think you should talk with the lawyer who prepared your will to ensure that a will alone accomplishes your estate planning objectives. Always confer with a trusted attorney who is well versed in estate law. That being said, in my understanding(we just had a long talk with our attorney while creating POAs and reviewing the language of our trusts) if the descendants assets all pass by a trust, POD(Totten trust) or beneficiary designations then there would be no need to probate the will as all assets in this scenario would be distributed. If there is issue over residual property or there is issue over debts that the estate has or incurs....then probate might be necessary. We didn't probate eithers of my parent's wills. All assets were TOD, Trust and beneficiary transfers which we took time to set up and verify.
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skubikky
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Post by skubikky on Nov 18, 2019 11:50:02 GMT -5
I make no money when I charge a $50 consult to tell people to put their house in their kids name with Life Use to themselvesBut doesn’t this mean that the kids will pay capital gains taxes on said house when it sells? yes. Or you can pay probate fees. You pay front or back. Sometimes they opt not to, exactly for that reason. You're paying capital gains tax on an asset that was given to you. I don't see that as a hardship. Yeah, the step up on the date of death of the parents is lost as the kids already own it at that point but , depending how long they own it, might not be that much of a loss. Issues that can arise are that the asset is owned by the kids and in cases of divorce or other liabilities, this asset could be vulnerable. Also, kids are legally responsible for taxes on said property.
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