Estate planning question
 

I have spoken to a few attorneys about estate planning and trying to keep costs down such as legal fees; court fees; executor fees; trustee fees; etc. My primary assets are my house, my Fidelity accounts, my Vanguard accounts, and two small checking accounts. That is about 98% of my assets.

Some of them tell me that a living trust is the way to go; others say that probate is a way to go; and others say that I should set up a TOD or POD for the Fidelity, Vanguard, and checking accounts because this will bypass probate. I have been told that if you go through probate, the lawyers will take about 5% of your entire estate. Other people have told me that if you use a living trust, that the lawyers will still take a sizeable portion of your entire estate - but less than 5%

I am more confused now than I was before I started talking to the lawyers. Can someone who has had the actual experience of going through probate or using a living trust or using TOD or POD describe how the process actually works? What were the general costs or fees involved? How long was the process? How difficult was it? Did you have to hire a lawyer? Were the attorney or trustee fees based on the entire value of the estate - or were you able to reduce the amount of the estate for attorney or trustee fees? Thanks.

I went through probate when my mother died in Maryland. I talked to an attorney who offered to do the probate for $4,500 plus fees. So, I decided to do it myself. It took about 45 minutes to get a letter authorizing me to sell my mother's house and other assets. I completed everything in about an hour, and, after 6 months (the legal time period to keep the estate open), I sent in a one page form to the court and I was done. Easy peasy. The only reason for going through probate was to be able to sell the house. A title company will not accept a will to transfer ownership of a house.

I also have very similar assets as you do, a Fidelity account, a Vanguard account, a checking account, and a house. The only asset that may need to be probated is the house because my other assets are TOD accounts. I am considered retitling the house as a Lady Bird deed, which will allow the house to automatically transfer to an heir without probate.

I believe that attorneys want you to create a trust because that is how they make money. Good luck.

My situation is similar. We own our home, local checking savings, and Fidelity accounts (Roth IRA, etc).

I bought Quicken Willmaker, approx $200. Easy enough.
Our kids inherit everything 50-50 when the 2nd of us passes on.
We had it witnessed and notarized at the local bank and gave a
copy to all parties named in the will. We also filed a Ladybird deed at the Sumter County courthouse in Bushnell.Did the medical directive too, included in the package.

Some people may get quesy with doing that, but I was pretty comfortable and confident, so I'm pleased with the result.

"The purpose of probate is to assign a new owner to the property when the current owner passes away, and there is no legal document assigning a new owner at that time." Elder law attorneys in the villages.

Trusts are popular when the assignment of new owner(s) is not straight forward, or there are conditional issues for the new owners.

Trusts can be used for blended families,
for dysfunctional families,
for generation skipping
for generation skipping designated usage until a certain age.
For specific items, such as with multiple houses, etc.

Trusts can also be used to shield assets from debtors, and limit the ability of family members to have access, and to provide a chain of custody of the assets, should your currently assigned TOD/POD not be living at the time.

Offspring 1 has three children
Offspring 2 has no children

Offspring 1 dies prior to you, does all assets go to offspring 2 as the only living relative?
Or do you want it to go 50%/50% because there are grandchildren who need to be taken care of?

TLDR:
What do you want to happen to your assets if there are unforeseen changes to the present status quo, just prior to your death?

That's why trusts and wills are created.

I am currently going through settling my mom’s estate in RI. I am using an elder attorney and over two decades ago created and periodically update all the necessary documents for mom, dad and other senior family members that also resided on the same property. [Trusts, wills, POA, POD, health directives, etc.] I thought i knew what should be done and must be prepared for when the inevitable day would arrive.

There were five seniors and each passed between 2 - 10 years apart, however as all the documents were in place and with limited guidance from the attorney I was able to administer and close out each estate through small estate probate. However, the last senior to pass has been a bit more challenging, so the decision to have counsel and others assist has been valuable.

I also negotiated a hourly fee for the legal services so was able to keep costs modest. In addition to the elder care/estate attorney, a CPA, appraisers and others were consulted. State tax and mandated fees I have no control over, however all other expenses are manageable and appear to be reasonable.

I recommend using trained, licensed professionals to handle such matters for a number of reasons:

1. To be sure all required forms and filings are made
2. I would seriously reconsider an DIY approach unless you are trained in such matters
3. In my case there are multiple beneficiaries involved so having independent 3rd party professionals involved adds transparency and objectivity to the process

Just my opinion based on experience over the past 25 years. This is not financial or legal advice only my opinion, you should consult professionals when making such important decisions.

Each situation is different. An estate's complexity, variety of assets and total value all should be carefully considered as well as the particular circumstances of the various devisees.

I would admonish folks not to be penny wise and pound foolish. There is no going back to explain what a testator intended or redo of any testamentary paperwork after one expires.

In my case, I had a will, signed by my mother, leaving everything she owned to me. The only asset to be probated was her house. There were no other heirs. The only reason for probate was that a title company would not prepare a clear title to a buyer, based on a will. I thought it was outrageous for an attorney to ask for a $4,500 fee for less than an hour of work by a legal assistant. That is why I did it myself.

I will also add that negotiating an "hourly" fee with an attorney is not good enough. You need to negotiate the total fee, or you may be shocked by the bill.

I wonder what Elon Musk and Nick Cannon would do? :pepper2:

ugh! my head hurts. . . we have a blended family with 2 offspring on my side and CoachK has a niece and nephew on her side. Trust and executors are needed, as the split is 25% for both of us. .

I will say that a friend's family had the mom pass away and the father remarried, but never updated the estate documents. The 2nd Wife got everything and cut out the children of the father.

So trust and wills should address changes to the status quo, and be kept up with annual reviews.!

This is from the Florida statute.

3) Subject to subsection (2), compensation for ordinary services of attorneys in a formal estate administration is presumed to be reasonable if based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during the administration as provided in the following schedule:
(a) One thousand five hundred dollars for estates having a value of $40,000 or less.
(b) An additional $750 for estates having a value of more than $40,000 and not exceeding $70,000.
(c) An additional $750 for estates having a value of more than $70,000 and not exceeding $100,000.
(d) For estates having a value in excess of $100,000, at the rate of 3 percent on the next $900,000.
(e) At the rate of 2.5 percent for all above $1 million and not exceeding $3 million.
(f) At the rate of 2 percent for all above $3 million and not exceeding $5 million.
(g) At the rate of 1.5 percent for all above $5 million and not exceeding $10 million.
(h) At the rate of 1 percent for all above $10 million.

Probate calculator.

Florida Probate Calculator — Michelle Goff Law

I had an honest attorney tell me that it doesn't take much more time and effort to probate a $5 million dollar estate than it does to probate a $500,000 estate but you pay $255,000 for the $5 million estate and only $30,000 for the $500,000 estate.

Note that my mother's estate was in Maryland, not Florida. But based on that schedule, the reasonable fee would have been $4,500 for a task that took me less than one hour to accomplish. I assume that the statute only becomes relevant when someone disputes the legal services fee.

WOW! $4500 for an hour of work! If you work just 8 hours a week, you make $36,000 a week! You only have to work 13 eight hour weeks a year to make $500,000.

Personal experiences are one thing. Actual law is another. Get your answers from lawyers, not your neighbors. The best Estate lawyers around, by popular demand, are the ladies at Pittman Law, near the intersection of 301 and 466 in Oxford. (352) 399-6944, Probate and Estate Planning Attorney The Villages, FL Lawyer

If you have a Trust and your trustee handles it there will be no need to use a lawyer because there will be no probate hearing. The key is fully funding your trust. If anything get left out that’s when the problems begin with settling a trust. The key reason for the trust is your beneficiaries can settle the estate in their time line without courts and lawyers. Yes it can be a pain for the trustee but better than court.
Also a trust makes your inheritance creditor and predator proof for you plus your beneficiaries

I have not gone thru the process in FL but have done it several times as the executor and helped clients navigate the estate plan as a financial advisor.

One thing to consider is who is your executor and what experience do they have with the legal process and with finances?
On non-IRA accounts a TOD is not a bad way to go if you do not have a lot of beneficiaries you want to leave money to.
Keeping as much as you can out of probate is always best from a time and expense standpoint point.
As you age you may also want to consider making bank accounts either TOD or joint with your executor.

My guess is musk already has each offspring paired or in contract with offspring of intelligent wealthy parents.
To ensure each of his offspring, in turn provides continuation of wealth and intelligence.
Centuries of Nobility had the same marriage characteristics, to keep family ties close, to acquire land, wealth, with intelligence, of brute force and plundering. End goal To secure bloodlines.

Cannon, May just wing it.

Here's my experience with my mother's estate. My mother had properties in multiple states, and small brokerage (Fidelity) and checking/savings accounts. Prior to her passing, we set up Transfer on Death Deeds (TODD in many states, similar is Lady Bird Deed in Florida) and made sure I was a beneficiary on all of her brokerage, savings, annuity, etc accounts. I also had power of attorney. To set up TODD's on 3 properties cost ~$500 in lawyer fees. Could I have done it myself? Most likely, but the ramifications of making a mistake were too high for my risk tolerance.

After her passing I provided a copy of the death certificate to the attorney and they filed the paperwork with the property offices and the properties were retitled in my nome. Easy, peasy. I don't recall if there was a cost for that.

For all other accounts I contacted customer service for the company and they pointed me to the forms to file. I filled them out and provided copies of the death certificate and within a short time, the accounts were either transferred to me of I received a check. Again, easy, peasy.

I originally thought a trust would be required, but everything could be handled via TODDs and beneficiary designations.

Hope that helps.

Living trust hands down.

Trust?
 

I finally got my trust done about eight years ago, updated it when I came to Florida.

Just had another meeting with attorney - her advice - all IRAs should be made POD to a beneficiary. Brokerage accts the trust is the beneficiary. I set up trust checking and savings accounts. My home deed was updated to reflect the trust. Cars are not added to trust.

I hated spending the money, but decided there there several other documents they added such as your last Will, power of attorney, medical etc. in the end I was glad I did. I think a trust is especially useful for people who have “issues” in their family and want to make sure how the money is disbursed.

IMO - it is well worth it. I did everything possible to make the transfer of wealth to who I want it to go to and designated a person to handle my estate. Recommend you attend a couple of free orientations from the Pittman Law Firm to get your questions answered.

Never heard of a lady bird deed! Will have to research that one! Thanks for the info!

Florida law does not allow a "transfer on death" deed for real estate. But a Lady Bird deed is allowed and it can accomplish a similar function.

Can you Trust them!
 

I know this sounds crazy, but, everything can be bypassed if you add 1-2 persons name to the deed, to bank accounts, and to anything else you own.
This will by passes any legal dealings at all.

The bigger problem is, can you trust them..........and if you can't, why leave them anything.

You put things in a trust because you can't trust the persons you're leaving it to. Its as simple as that.:o

QUOTE=Rainger99;2418512]I have spoken to a few attorneys about estate planning and trying to keep costs down such as legal fees; court fees; executor fees; trustee fees; etc. My primary assets are my house, my Fidelity accounts, my Vanguard accounts, and two small checking accounts. That is about 98% of my assets.

Some of them tell me that a living trust is the way to go; others say that probate is a way to go; and others say that I should set up a TOD or POD for the Fidelity, Vanguard, and checking accounts because this will bypass probate. I have been told that if you go through probate, the lawyers will take about 5% of your entire estate. Other people have told me that if you use a living trust, that the lawyers will still take a sizeable portion of your entire estate - but less than 5%

I am more confused now than I was before I started talking to the lawyers. Can someone who has had the actual experience of going through probate or using a living trust or using TOD or POD describe how the process actually works? What were the general costs or fees involved? How long was the process? How difficult was it? Did you have to hire a lawyer? Were the attorney or trustee fees based on the entire value of the estate - or were you able to reduce the amount of the estate for attorney or trustee fees? Thanks.[/QUOTE]

Florida requires probate and has a fixed fees and percentages for the cost. For example, if $1-3M, it’s 3%. If you are giving everything to just 1-2 heirs, you can put a TOD/Beneficiary on all accounts and change the home deed to a remainderman where you can have equal shares say 50/50… that bypasses probate. I have 99% or our estate on an beneficiary and remainderman. All that’s left are cars and physical assets which will still need probate but the cost will be less than $500.

[/QUOTE]
Not 5%, but a fixed fee (and yes, a small estate, it could be 5%) up to $1M then a percentage

Florida law provides guidelines for attorney fees based on the value of the probate estate. While these fees are not mandatory, they are commonly used as a benchmark:
• Estates up to $40,000: Attorney fees may be around $1,500.
• $40,000 to $70,000: Approximately $2,250. 
• $70,000 to $100,000: About $3,000.
• $100,000 to $1 million: Around 3% of the estate’s value. 
• $1 million to $3 million: Approximately 2.5%. 
• $3 million to $5 million: About 2%.
• $5 million to $10 million: Around 1.5%.
• Over $10 million: Approximately 1%.

Call Millhorn & Shanawany Law Firm on hwy 441. Very knowledgeable and very reasonable price. I couldn't be more pleased with the trust they set up for us.

I'll let the attorneys speak for themselves, but in my experience with family, as well as living in a family of lawyers, there's more than an hour's work. They have to open the estate, gather all bills from everyone (doctors, hospitals, power company, gas company, funeral director, banks, loan company, credit card company, etc., etc.) and make sure they are paid out of the estate FIRST, file the Federal and State taxes for all the relevant states, contact any and all potential heirs, etc. Things can get messy if there's a long lost "someone" that may be due an inheritance (e.g. stepchild from a long-ago marriage). My spouse's birth father had 5 wives from 4 legal marriages over his lifetime and 3 sets of kids (some adopted, some not). Then there's the battles between heirs about the terms of any will, whether the will is valid, who gets what, who agrees to sell the "farm" vs keep the "farm", who gets "mom dining room table, dresser, etc." When it comes to family and money, things get really messy, especially when you die, and they decide to go to your home and start removing things before probate!!! IMO, retirement assets, mutual funds, etc. are the easiest because you can (and should) assign beneficiaries for each account, which should take them out of the equation. As for putting children on checking/savings accounts, etc., do you REALLY want to make them co-owners and risk their debts sacking YOUR money? For property such as farms, you can put them in an LLC set up with a right of survivorship, and over several years give them an interest in the LLC and they just get the property upon death. Bottom line, when YOU ARE DEAD, do you really care about a few thousand spent to settle the rest of the estate that wasn't covered by having beneficiaries or LLCs? To them, it's free money! Let the lawyer absorb the grief from family rather than family fighting over things.

My understanding is that accounts with named beneficiaries will not go through probate. So, make sure that all of your accounts have name beneficiaries on them. All other assets, houses, cars, etc could be addressed in a will. This is what I wrote down in my notes when I met with an estate planning attorney. Check with an attorney and decide for yourself.

That may be the case for some estates. But, in my case, I explained the entire situation to the attorney on the phone in about 5 minutes. Then, he quoted me an exact fee of $4,500. The next day, I went to the courthouse, and within 45 minutes, a lady looked at the will, typed out a form, and handed me an official "personal representative" form that I could use to sell the house. She also directed me to another person in the office who charged me $75 to advertise the estate in the newspaper. Then, after 6 months, I filled out a one page form and mailed it to the court, with the court fee that would not have been included in the attorney's fee. That is all I did. Period.

Tod and ladybird deed
 

My mother passed 4 years ago. All her accounts were either tod or pod and her house had a ladybird deed. No probate, no attorneys involved after her death. Everything transferred to us with her death certificate. So easy for us to do. She had us both listed so banks, investment firms all gave half to me and half to my
sibling. The house went into both our names and we immediately listed it for sale. I have the same set up for my children. Easiest way to go by far and the cheapest.

That sounds pretty close to how our estate planning was designed by our attorney. She said there was no need for a trust and gave us a synopsis of any items that may trigger probate proceedings which we can monitor and adjust accordingly. Also, not all states require a "Ladybird Deed". TOD is enough for those states.

TOD or POD for the Fidelity, Vanguard, and checking accounts because this will bypass probate. Setting up TOD/POD for investment and checking (if available) is easy. When the time comes you beneficiaries will need to fill out a form and attach death certificate and the money transfers to them. Of course, review beneficiaries often to ensure most current.
My father passed away in Ohio, had no home or vehicle. He had a will, but I never filed it because all his accounts had a TOD in place. Personal belongings - he had left instructions. Nothing to probate....

I setup a Trust using Quicken Willmaker for my Florida home and updated the deed to reflect this and filed with the County.

I would look into Lady Bird vs. Living Trust if all you need to deal with is the home...

Thank you!
 

This is helpful. Where did you find it?

It is Florida Law Estates and Trusts § 733.6171

Just a moment....

Small point... Vanguard does not allow beneficiary designation (TOD) on joint accounts. The last surviving account owner must take care of the TOD stuff.

You are correct. At the present time, we have a joint account. I called vanguard about adding secondary beneficiaries and they said that I could not do it. I am in the process of setting up an individual account and transferring all the money from the joint account into the individual account. At that time I can put my wife as the primary beneficiary and add secondary beneficiaries.

If we kept the joint account and we both were killed in a car accident, the money would have to go to probate! No way to avoid it!

Does anyone know the reason why vanguard has this policy?

And it is not a small point! It could cost someone thousands of dollars if the vanguard account had to go through probate!

You want to keep as much of your estate out of probate as you can. An attorney is not needed for these assets. You can log onto your financial institutions websites and add beneficiaries to the accounts. This avoids probate. At your death the institutions will want a copy of your death certificate. You can also ask them what forms they want etc. Thus this part you can do.
Do not add anyone as an owner of any assets. This could tricker gift taxes and if they have legal problems they could become your problems. Not sure of the Lady Bird deed. I think you lose some current wrights. My guess is you might need their permission to sell the home. In Florida look up Summary Probation. This is what you are shooting for.

Yes. It's definitely not a small point given simultaneous death.

With your plan, I'm betting that if you do predecease your spouse, she will still have to name her own benficiaries (take care of the TOD stuff). Your secodary beneficiaries won't automatically become her primaries.

As to why Vanguard has this policy, I'm guessing that they just never got around to programming for anything else.

My understanding is that who ever the executor is can hire an attorney to assist and advise and at fraction of those fees, the executor is the one who collects the percentage
"(1) Attorneys for personal representatives shall be entitled to reasonable compensation payable from the estate assets without court order.

(2) The attorney, the personal representative, and persons bearing the impact of the compensation may agree to compensation determined in a different manner than provided in this section.  Compensation may also be determined in a different manner than provided in this section if the manner is disclosed to the parties bearing the impact of the compensation and if no objection is made as provided for in the Florida Probate Rules. in other words shop around for any legal assistance rather than being ripped off

I moved a significant amount of investments out of Vanguard due to this. Note, I did not have to sell anything, just transferred assets to avoid capital gains.

Put POD (pay on death) on your bank accounts. The bank will have the forms. If a joint account and you both agree as to beneficiaries, fill out the bank form for that person/persons to be the owner of account after the death of you, or both if joint account. They can’t access the account at all until the last of joint owner dies, and all they have to do is provide a certified copy of the death certificate to the bank. Bank MUST give full ownership to whomever you designated. (If a POD designation is on the account, it should r show on the statements as such.)
Investments: check with your broker. Some allow beneficiaries to be listed & others require a Transfer on Death form to name beneficiary(ies).
House: Fl is using an enhanced Lady Bird Deed meaning the owner retains a life estate (can own/ live in house til death) and names whomever s/he is giving house to upon death. (Old-fashioned way to avoid Probate & Medicaid reimbursement; many states now use Transfer on Death forms which are easier to complete, file, and change later if desired).
Boats, cars, etc. Most state DMVs have forms ‘Affidavit of Heirships’ where you can attach death certificate & show you are the legal heir to decedent.
Most states (? Fl) also allow Affidavits of Heirship for full Estates (frequently the house) as an expedited transfer of assets (needs heir’s affidavit of facts as rightful heir and has 2 other Affidavits from persons who knew decedent & family line well, & attest to heir’s facts. Not sure if Fl using such & most states have a Court ordered ‘Small Estate Probate’ process for under a certain amt of money.
However you do it, check all states you lived in for unclaimed property. In most states you have to open Probate to reach decedent’s unclaimed property.
I so, just a few forms & almost all can rewrite a deed. No Probate needed.
More importantly, I’d advise y’all to see a local Estate Atty to do a Financial Power of Attorney (naming who you want to make financial decisions while alive but incapacitated) with alternative agent.
Also a Medical Power of Attorney naming agent & alternative agent.
Hopefully, nothing needed for a long time, but comforting to know they are there if needed.