I need estate planning help please.

[winnietucker]

Not entirely jewelry related but I know you smart people would be more helpful than my friends and family so I’m asking for help.

We’re updating our will and I want to make sure we have all our ducks in a row. I don’t plan on dying anytime soon but with the baby I want everything good to go. Anxiety and all…

The run down is all assets will be put in a trust for the benefit of the baby that will be controlled by my mother (first choice) or my aunt (second choice). There’s nothing specifically noted for my jewelry. Should I have something added in case? The attorney said it would be at my mother’s discretion but my mom is not a jewelry person and would probably take everything to a pawn shop if she doesn’t save it for my son. Likewise, she’s not exactly the most organized person so if she kept stuff for him, I could see her losing everything. The other assets - house, cars, etc I know she could handle selling.

Guardianship is addressed. Baby will go to my friend as first choice and my mother as second choice if my husband and I die together. Social security will go straight to my friend for day to day expenses of raising him and then she can go to my mother when she needs more money. Do I need to spell out what I think reasonable expenses are as a guide for my mom? I’m expecting that additional housing costs (like buying a larger house), costs associated with purchasing a home in a nicer school districts, a car since she doesn’t drive currently, etc would also be paid from the trust. My goal is that whoever has to raise the baby doesn’t have to come out of pocket for it. With life insurance and the sale of the house there should be a sizable sum. But we also have retirement accounts and I forgot to ask about that. The baby has a 529 but he’s already the beneficiary so I don’t think I need to do anything, right?

And how do you calculate survivor social security benefits? I used the calculator on their website and did both of ours individually. Do I add both numbers that came up? I asked our attorney and she said she didn’t know and it might be a couple thousand/ month but that’s significantly less than what the website said when I used the calculator and added the benefits for both of us together. I’m wondering if it’s only the highest earning parent’s income that counts or something.

The attorney also said power of attorneys will be updated.

Am I missing anything? Is there anything I should be asking for or adding? I should have done immediately after he was born but I’m only now in the headspace. Given my husband and I will have almost no free time once I go back to work, I’m trying to get it done this week. Thank you in advance for the help!

 

[pearlsngems]

A complicated issue. Our DD is now 26 but when she was born, we redid our wills to give guardianship to my friend and her husband, and we made them the trustees also, as well as our executors. I figured if we could trust them with our child we could trust them to use our money to raise her properly.

Any will can have a letter attached stating your preferences for how particular items will be used-- jewelry (etc.) This is not binding, though; after all, the jewelry (etc.) may not even still be part of the estate at the time your your deaths.

 

[winnietucker]

A complicated issue. Our DD is now 26 but when she was born, we redid our wills to give guardianship to my friend and her husband, and we made them the trustees also, as well as our executors. I figured if we could trust them with our child we could trust them to use our money to raise her properly.

Any will can have a letter attached stating your preferences for how particular items will be used-- jewelry (etc.) This is not binding, though; after all, the jewelry (etc.) may not even still be part of the estate at the time your your deaths.

Huh good to know. The attorney did not mention that… I’ll definitely get that in order once the will is updated.

I forgot to ask - is it odd to request a friend raise my child if my husband and I die? I told my mom I was going to do that and she did not think it was a good idea at all despite not wanting to raise him herself. She also had no real suggestions of who in the family could raise him. My friend is still single and doesn’t drive so my mom thinks my friend will change her mind about raising my son should my husband and I both pass. Or that it would cause issues later.

Was there anything additional that you had to do in your situation to ensure there would be no issues with the custody arrangement? The attorney was very brief with me today but my main goal is to keep certain family members from getting custody of my son and accessing the money that will be available should we die.

 

[Austina]

I think it’s best to ensure that everything is covered, so if you’re worried about your jewellery, leave specific written instructions, that way there can’t be any confusion.

We’ve also left instructions about what type of funerals we want, and also that in the event one or both of us is left in a persistent vegetative state, our wishes not to be kept alive artificially. This relieves the burden of making the decision from our son (or if your son is a minor, your parents).

I think it’s very wise of you to be making these plans now, once it’s done, it’s done and you don’t have to think about it again. It saves so much stress and hassle on those left behind.

 

[winnietucker]

I think it’s best to ensure that everything is covered, so if you’re worried about your jewellery, leave specific written instructions, that way there can’t be any confusion.

We’ve also left instructions about what type of funerals we want, and also that in the event one or both of us is left in a persistent vegetative state, our wishes not to be kept alive artificially. This relieves the burden of making the decision from our son (or if your son is a minor, your parents).

I think it’s very wise of you to be making these plans now, once it’s done, it’s done and you don’t have to think about it again. It saves so much stress and hassle on those left behind.

I’ll definitely write instructions and make sure the rest of it is in the will too. I don’t think burial arrangements were added so I’ll ask to be sure those are mentioned as well because I have specifics that I verbally told my husband and mom.

 

[pearlsngems]

Before doing our wills we asked my friend and her husband if they were willing to take on the responsibility of raising our daughter, and they readily agreed. I would definitely ask your friend first. Let her decide if she could handle it. If she comes to change her mind while you and your husband are still living, you can update your wills to name someone else.

We had our daughter later than most people do, and our parents on both sides were retirees. What if they died? Then who would raise our daughter? It made more sense to me to ask someone of our own generation.

As it happened my MIL died when our daughter was just 7, after an extended illness; FIL had his hands full taking care of her and could not possibly have also cared for a child. FIL died 4 years later himself when our daughter was 11. As for my parents, my father died when DD was 14, at which point I had to take on care of my mother, who by then had dementia.

 

[MollyMalone]

And how do you calculate survivor social security benefits? I used the calculator on their website and did both of ours individually. Do I add both numbers that came up? I asked our attorney and she said she didn’t know and it might be a couple thousand/ month but that’s significantly less than what the website said when I used the calculator and added the benefits for both of us together. I’m wondering if it’s only the highest earning parent’s income that counts or something.

Yes, the Social Security Administration calculates the benefit each parent would have received, based on their earnings and Social Security contributions. A child is eligible for 75% of whichever deceased parent's benefit is highest.

There is a cap on how how much SSA is permitted to pay out to a family, so if there are multiple children and the total of their individual 75% benefits exceeds the maximum, SSA reduces each child's monthly payment in accordance with a set formula.

KUDOS to you for making the time, expending the energy on this!
~ Molly (my dad was a trusts and estate lawyer, so I have some idea of how hard this kind of thing is for so many people)

 

[MissGotRocks]

Spell out everything as explicitly as you can - particularly about jewelry and personal things. Otherwise, they could be sold and added into the estate - set them aside in your will if you want your child to have them.
You may have other children. Your friend’s circumstances may change. It may be necessary to update your will in case of changes. If you appoint a guardian and trustee, those are generally not challenged unless there is good reason to bring it before the court showing that they would be incapable or incompetent. Social Security benefit amounts will change with time as well. I am assuming you have life insurance that would be the next source of income after your home or other assets are sold. It would be almost impossible to determine what SS would be in years to come.
It might be recommended to names alternates to your executor, guardian and trustee. You never know what can happen so you need to cover all bases.
I hope you and your husband live long and healthy lives but you are wise to make arrangements. In my state, without a will, people (generally family members) can petition the court to be appointed guardian and/or trustee. By naming these folks, you will pretty much alleviate that happening.

 

[winnietucker]

Before doing our wills we asked my friend and her husband if they were willing to take on the responsibility of raising our daughter, and they readily agreed. I would definitely ask your friend first. Let her decide if she could handle it. If she comes to change her mind while you and your husband are still living, you can update your wills to name someone else.

We had our daughter later than most people do, and our parents on both sides were retirees. What if they died? Then who would raise our daughter? It made more sense to me to ask someone of our own generation.

As it happened my MIL died when our daughter was just 7, after an extended illness; FIL had his hands full taking care of her and could not possibly have also cared for a child. FIL died 4 years later himself when our daughter was 11. As for my parents, my father died when DD was 14, at which point I had to take on care of my mother, who by then had dementia.

Ok I feel better about this. Thank you for your insight!

Yes, the Social Security Administration calculates the benefit each parent would have received, based on their earnings and Social Security contributions. A child is eligible for 75% of whichever deceased parent's benefit is highest.

There is a cap on how how much SSA is permitted to pay out to a family, so if there are multiple children and the total of their individual 75% benefits exceeds the maximum, SSA reduces each child's monthly payment in accordance with a set formula.

KUDOS to you for making the time, expending the energy on this!
~ Molly (my dad was a trusts and estate lawyer, so I have some idea of how hard this kind of thing is for so many people)

That makes sense and is good to know in the off chance we have a second child. Thank you for clarifying that.

 

[RetroQT]

I don’t have anything to add other than to say you’re doing the right thing. As a widow (I was 38 with three minor children), it was a huge blessing that my late husband had everything taken care of prior to him being KIA. I didn’t have to suffer through any legal channels or the horrendous issues of probate.

I have all of my estate planning completed and will be updating it when my youngest turns 18 at the end of the year.

 

[winnietucker]

Spell out everything as explicitly as you can - particularly about jewelry and personal things. Otherwise, they could be sold and added into the estate - set them aside in your will if you want your child to have them.
You may have other children. Your friend’s circumstances may change. It may be necessary to update your will in case of changes. If you appoint a guardian and trustee, those are generally not challenged unless there is good reason to bring it before the court showing that they would be incapable or incompetent. Social Security benefit amounts will change with time as well. I am assuming you have life insurance that would be the next source of income after your home or other assets are sold. It would be almost impossible to determine what SS would be in years to come.
It might be recommended to names alternates to your executor, guardian and trustee. You never know what can happen so you need to cover all bases.
I hope you and your husband live long and healthy lives but you are wise to make arrangements. In my state, without a will, people (generally family members) can petition the court to be appointed guardian and/or trustee. By naming these folks, you will pretty much alleviate that happening.

Do you mean I bring it to the court or someone else does in the event I die? I thought I could just make changes as I wanted to.

 

[winnietucker]

I don’t have anything to add other than to say you’re doing the right thing. As a widow (I was 38 with three minor children), it was a huge blessing that my late husband had everything taken care of prior to him being KIA. I didn’t have to suffer through any legal channels or the horrendous issues of probate.

I have all of my estate planning completed and will be updating it when my youngest turns 18 at the end of the year.

I’m so sorry to hear about that. It’s a huge fear of mine. I want to be sure that worst case scenario my son is okay and that everything was carefully thought out way in advance.

 

[MissGotRocks]

Do you mean I bring it to the court or someone else does in the event I die? I thought I could just make changes as I wanted to.

You would need to go back to your lawyer for a rewrite. The only time the will goes to court is in the event of your death and your executor opens an estate to deal with the contents of the will.

 

[winnietucker]

You would need to go back to your lawyer for a rewrite. The only time the will goes to court is in the event of your death and your executor opens an estate to deal with the contents of the will.

Okay got ya! I’ll keep that in mind so I can stay on top of it if there are any changes. Thank you!

 

[Lookinagain]

The best wisdom is to have your estate plan reviewed every 5 years. Your wishes may change, your family may change, tax laws change. A will and trust drafted now may not work 20 or 30 years from now.

 

[LilAlex]

Not a trust expert or finance professional, but just lost a dear friend this evening so I am continuing the theme here.

My parents did this when we were little kids because they did a lot of international travel and planes were less safe, etc. The folks they picked for our potential guardians (we later learned) would not have been ideal choices. We did this for our own kids a couple decades ago. The crux is the integrity of the executor(s) and guardians. We picked the kindest and most sensible people we could. Even then, one half would not have been a good choice, turns out.

There is almost no way to control the finances from "beyond the grave." My understanding is that for a trust, the guardian (if also the trustee) can take whatever is needed for [some acronym] -- basically health, education, and welfare of the kids. But this is interpreted so liberally that it has almost no teeth ("I drive them and need a new car -- and it must be 4WD in case it snows and it must be luxurious because I have a bad back," etc., etc.) And who would sue the guardian(s) if they squandered the inheritance? Or who would even know? The only thing you can do is try to choose these people wisely. We picked co-guardians from both spouses' sides of the family.

The alternative is to use a professional/commercial trustee (e.g., bank) but I do not recommend that, either. They will take 1.5 or 2% per year (!) and keep it invested crazy conservatively to protect themselves from liability (indemnification against poor stewardship). I mean I get it -- if you are doing this for someone you neither love not care about, you gotta get paid. And some non-professional trustees also pay themselves -- you are allowed -- and it can be six figures. I assumed this role for one parent and never took a penny although it was hundreds and hundreds of hours (long story).

Note that assets in a trust are taxed at a ridiculously high level. I think you only need ~ $13K in trust income to reach the highest tax bracket (37% or so) whereas you would need a half-million (!) in personal income to reach that bracket outside a trust. No big deal for a year or two but it adds up over decades. (Plus, some trusts are structured so that the contents may pass to the beneficiaries in stages at ages 25, 30, and 35 -- so that's a lot of years in trust).

Vis-a-vis jewelry and the like, wills may reference a separate "schedule" for personal effects (or whatever it's called). You may list there who should get what or, instead, a rationale for their choosing what they want when they are older (e.g., alternating, with the first chooser selected randomly). My mom wanted me to get an opal ring that I had always admired (since I was a little kid) -- but she made that clear shortly before she passed. Our own wills are fairly generic and do not have such a schedule -- but our kids know what jewelry we have and I'm guessing they have some idea what they love or loathe.

My parents made sure that we were all co-signers on their safe deposit box so we could access the contents in case something happened to them. That came in handy. We will do the same for our kids when we get a little older.

EDIT: I know nothing about the Social Security piece but not hard to look that up.

 

[Daisys and Diamonds]

spell everything out you want to the letter, to the full stop even

if you want jewlery to be left for your son to give to his future wife write it in too

my mum was very specific about certain pieces of jewlery
it was held by the lawyer while she was in the dementia home - he said that was usual but they were happy to do it

look into how the jewlery can be kept safe for the future (this is after all a jewlery forum)

 

[Lookinagain]

There is almost no way to control the finances from "beyond the grave." My understanding is that for a trust, the guardian (if also the trustee) can take whatever is needed for [some acronym] --

It isn't necessary for the Trustee and the guardian to be one in the same. The person who may be a great substitute parent may not have money sense, and the person with money sense may not be a good parent. You can choose different friends/family to name for each function. This adds some checks and balances. You can also cap the amount of funds that can be dispersed every year, if you are really concerned about abuse. The option to use a Trust Company or other professional trustee is an alternative, but not necessary option. And yes, they will charge a yearly fee that is usually a percentage of the value of the estate, so it can get pricey, depending on your assets.
I'm not a tax expert by any means but I believe any income earned by the trust and distributed to the beneficiaries in the year it was earned is not taxed at the trust rate because the beneficiaries pay the tax at whatever their tax rate is. So it would be the retained income that stays in the trust, that is taxed at the rate for trusts.

 

[AllAboardTheBlingTrain]

I’ll weigh in on the jewelry part as some of the other advice would be specific to your jurisdiction and I am not in the US.

I did however help my mom with her personal effects for her will (primarily jewelry). We took pictures of each piece, and made a schedule which contained a serial number, description of the piece, weight, gold content and karatage, stones type and caratage, and a picture. We also have all the invoices scanned and tagged, as well as certificates/appraisals. Against this schedule she wrote exactly who inherits which piece. She didn’t intend for us to sell any to fund her bequests, but you can make a separate schedule with those details also.

In general, having a list of your exact investments and assets is also helpful. You need not attach it to your will, but my parents have documents which contain the exact details of their assets, including location of all important papers and keys etc. You want to make it as easy as possible for someone to access this information but only if it’s needed, not before that.

 

[winnietucker]

Thank you all! Baby had vaccinations today so he’s extra crabby. I’ll have to really read through the comments later today or tomorrow when I really get a moment to sit down.

 

[MollyMalone]

* * *
My parents made sure that we were all co-signers on their safe deposit box so we could access the contents in case something happened to them. That came in handy. We will do the same for our kids when we get a little older. * * *

As a fyi: this is not true in every state in the USA. New York is one of the many states that does not recognize a "right of survivorship" in joint safe deposit boxes. Even a widow/widower who was a co-signatory on the safe deposit box needs a court order to gain access to the box. And the states also vary as to what can be removed without court authorization.

 

[LilAlex]

Even a widow/widower who was a co-signatory on the safe deposit box needs a court order to gain access to the box.

Who said anything about survivorship? If things are looking grim, anyone can access the box. For essential paperwork, etc.

 

[Karl_K]

As a fyi: this is not true in every state in the USA. New York is one of the many states that does not recognize a "right of survivorship" in joint safe deposit boxes. Even a widow/widower who was a co-signatory on the safe deposit box needs a court order to gain access to the box. And the states also vary as to what can be removed without court authorization.

MM as always you rock.
This is why it is critically important to use a local attorney well versed in your states laws.
A friend ran into this, they asked the bank and they said no co-signing would not work.
Working with a lawyer they figured out what did work is having the box in the child's name with the parents having access to the box as secondary users. (I dont know which banking/legal term covers that)
This is going to vary greatly state to state some states anyone on the box paperwork in any position passes away then it takes a court order.
Other states all it takes is having a co-signer granted access on the paperwork.

 

[Karl_K]

Who said anything about survivorship? If things are looking grim, anyone can access the box. For essential paperwork, etc.

You always have to look at these things like your walking with your spouse and get hit by a bus while the child is elsewhere. Both gone in an instant.
Then survivership becomes critically important.

 

[Lookinagain]

My parents made sure that we were all co-signers on their safe deposit box so we could access the contents in case something happened to them.

I read what you wrote here to mean in case of their death so I also assumed you were referring to survivorship. If you meant something like incompetency, I'm not sure how that impacts things, and agree, each state is different and therefore local counsel is imperative.

 

[winnietucker]

I’m back to being overwhelmed… I’ll insist on a meeting with the attorney that’s long enough to really go through everything and I’ll find another attorney if I need to.

 

[Karl_K]

I’m back to being overwhelmed… I’ll insist on a meeting with the attorney that’s long enough to really go through everything and I’ll find another attorney if I need to.

I think most people are doing this.
Some friends of ours just did it and it took about 3 months and 3-4 visits with the lawyer and one with an accountant to get everything in place.

 

[AllAboardTheBlingTrain]

I’m back to being overwhelmed… I’ll insist on a meeting with the attorney that’s long enough to really go through everything and I’ll find another attorney if I need to.

Before you meet with the attorney, make a list of all possible issues and points to go through - my parents didn’t do that and it took multiple meetings before everything was closed!

 

[Lookinagain]

Please make sure the attorney is one whose practice focuses on trusts and estates. Often attorneys assume they can handle them but if it’s not their specialty something may be overlooked.

 

[MollyMalone]

I’m back to being overwhelmed… I’ll insist on a meeting with the attorney that’s long enough to really go through everything and I’ll find another attorney if I need to.

If you do decide to consult another attorney, you might start by having an initial phone/Zoom conversation with one or more Fellows of the American College of Trust & Estate Counsel. This is not one of those "honors" bestowed upon anyone who ponies up X amount of $$. Selection criteria and process described here:

Become an ACTEC Fellow

Learn how being an ACTEC Fellow has impacted members' careers, and the steps to nomination for trust and estate planning attorneys and professors.

www.actec.org

ACTEC Directory Search page:

Find an ACTEC Fellow

Search for an American College of Trust and Estate Counsel attorney in your area.

www.actec.org

Wishing you all the best in soon securing as much peace of mind as possible!