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.