I’m not married so I am quite late to this game, but I have concluded that I definitely need to create a will. My assets are relatively simple (no businesses, for example) and there might only be one beneficiary (at most two).
I am wondering if anyone knows, or have favorite links with info, for the best practices for setting this up properly. State of California.
Does the value of your assets (not net worth) exceed $166,250?
Have you definitely concluded that you don’t need a trust?
I don’t think a will is needed for accounts that can name the beneficiary directly, but IANAL.
You can probably google the right instructions for DIY if a will is all you need. Nolo has some pages on this, and books. If you need more, then IMO the best way to do this is to sign up for a group legal plan (like MetLife/Hyatt) if possible, then have an in-plan attorney do the estate plan (includes will and trusts) for free. Otherwise the cost of something like that was $2K-5K last I checked around SoCal.
That last recommendation was what we did. Employer had a sponsored legal plan which entitled us to having an estate attorney setup our living trust up to some limit in hours of consultation. Ended up costing us $30 total + recording fees.
Only caveat is that prior to consultation with attorney we had decided 90% of the issues and structure of the trust which saved a lot of time in consultation. Attorney ended up more double checking our draft and entering it all in legal format for our state, alerting us of potential issues, and a couple of options we had not considered. But bottom line is it was far from 100% hand-holding and we had to do a lot of homework beforehand. If we had needed more guidance or had a very complex family situation, this may not have been enough though.
To become aware of the various issues, I remember using a combination of Quicken Willmaker (had an old version from bundle with Quicken) and Nolo online resources. I’d definitely start with free online resources to explore options, become aware of terminology, and help define whether will (our initial thoughts) or living trust is more suited to your needs.
Regardless of how many you have, best practices depend on how many heirs could potentially come forward. Like if you are cutting someone out (giving everything to one child, and excluding the other), or if your youth included a lot of one night stands that might’ve been more ‘productive’ than you thought.
Given my own circumstances, I’d be fine with something literally scribbled on the back of a napkin. If you are leaving money to a child and dont want their mother to get her hands on it, you probably should use a lawyer.
More importantly, name POD (Payable on Death) beneficiaries on your bank accounts, so they can bypass the probate process. Same with brokerage accounts and IRAs. With that in place, it’s as simple as notifying the institution of your death and they’ll distribute the assets accordingly. Using a will to direct those distributions means probate, executors, court, and lots of costs - best to minimize what is handled via that route.
My recommendation (sadly based on several experiences) - Do a separate “Will & Estate Instructions” document.
This isn’t part of your will, but should be in the same packet / folder - perhaps even emailed / given to those who might be handling your will.
Think of this as a roadmap to closing out your estate - imagine if you were the one doing it, how would you know where to look, what to look for, and what “gotchas” you might have?
Where do you keep your important docs (the will, titles, tax returns, etc.)?
Where do you keep your keys (car, house, boat, other house, business, safe, safe deposit box, etc.)?
Where do you keep your passwords (especially important ones like phone, email, banks, etc.)?
Where do you keep important computer files (My Docs, a specific directory, USB stick, etc.)?
Are there any professionals to help with this that you’d trust - such as a CPA or Attorney you know and like?
What about your pets, possible list of who gets them, do they have special care requirements, are you giving that new owner any money to help with vet bills, etc.?
Does anybody owe you money or payments?
Where are all of your bank / brokerage / life insurance accounts?
Where can they go to see all of your normal bills?
Where do you keep your contacts, credit cards, passport, hidden cash?
Listing of your assets, insurances, debts, etc.
Special instructions for anyone, anything, or maybe even a computer directory to delete - lol!
Frequent Flyer accounts and perhaps a recommendation on what to do with them (maybe buy tickets for themselves, cash out for gift cards, etc.)… because once you notify the airline, some of them will just zap those miles away.
You get the idea…
This doc can be pretty complex, depending on how complex you are and maybe you don’t want to give all this info out to people UNLESS you die - then perhaps just tell folks where they can find this doc.
Asking all the right questions here. Everyone should have a will. The question is whether you should also have a trust.
Wills are great at telling probate courts where your stuff goes and making sure your wishes are protected.
Trusts do the same thing and skip the bureaucracy.
This is an oversimplification, but In the right direction. The nice thing is that this type of work is typically just copy and paste kind of stuff and can be done very cheap on legal zoom or through a legal plan.
That dollar amount is important detail. The $166k figure there is the threashold in CA for whether or not the estate requires probate. If you have less then that you dont’ have to do probate. If itts more than that then probate is required.
Probate fees can eat up 2-4% of your money depending on the amount. SO depending on the amount of the estate this will determine if you want/need to go to extra steps to avoid probate or not.
Banks? Are you sure it’s a good idea to login to a dead person’s bank account? Checking the balance is probably fine, but it’s probably illegal to take any other actions. IMO it should not be passwords, it should just be account numbers so they’re easier to locate.
Same for frequent flyer miles – I’d think it’s illegal to cash out those miles.
Exactly. Also probate could take years (average is 12-18 months in CA). And if you have a house with a mortgage and the mortgage does not get paid while the house is in probate, it could be foreclosed.
Everything you asked - based on my experience… Yep, that is what I’d do - with the assumption that I am the intended recipient of the estate. If the estate is going to someone else, then no.
Banks don’t always do things properly, different tellers, different managers, different rules.
Maybe you give them that death certificate and they freeze the account - right then… existing checks, auto-debits, mortgage payments, utility bills, etc… could all get bounced. Maybe you are a Payable On Death or even a joint signer and they still freeze the account. You’ll win in the end, after you and the courts get involved, but my way is easier.
Never give a bureaucrat a chance to say no and don’t allow bureaucracy to damage or diminish the estate or what has been willed to you.
Frequent flyer miles - some airlines say they will transfer them, some say you’ll loose them. Again, you are at the mercy of how that rep interprets the rules - maybe that rep is wrong and you loose out on those 2 million FF miles. Again, my way is easier.
A good example from the article: “A Delta phone agent confirmed the policy, but also offered up the suggestion of ensuring ahead of time that my family has my SkyMiles login information so they can continue to use any miles I leave behind. She also said the only way the airline would transfer miles in these situations is by court order, so perhaps there’s something worth investigating if you want to go through that amount of effort.”
One additional warning. If the bank is where SS checks get deposited, the account will be locked within a month of death. SS gets notified by the local authorities (I think that’s who does it) when you’re declared dead. SS then notifies the bank.
If the deceased has bill pay set up, they will start bouncing right and left. This will occur long before the executor gets appointed and opens an estate account. It’s a PITA.
I don’t disagree, I just think it’s illegal and could become a much bigger problem later on. Especially with financial accounts. Except for joint signer – that should not be a problem because each joint owner has the exact same rights and own the account in full.
Perhaps I didn’t see the need to state what I thought was obvious - DON’T STEAL SOMEONE ELES MONEY. My bad, LOL!
YMMV, but I have found that if you are acting as a reasonable fiduciary for the estate and do what is reasonable to protect it (and can prove it, if asked) - you won’t have issues.
I have not encountered the “1 month and bank account locked” thing with social security… BUT, I haven’t had to deal with an SS issue for several years, so I wouldn’t be shocked if SS has that process setup with the banks now to notify them of the death.
The important thing that was intended to be conveyed with my notes above is to make it easy on the people dealing with your mess when you are gone.
Your spouse / family member / best friend may have known you for decades, but they probably don’t know as much about your financial/business affairs as you think… and something as tiny as not knowing how to find your cell phone or email password can cause so so so much extra hassle.
Could? Yes. But, for the most part, you as the proper/eventual recipient of the assets would have to initiate a claim that the funds had been improperly stolen…by yourself. Again, circumstances do matter. The only thing you do NOT want to do is continue using the deceased credit cards, then report the cardholder deceased and not pay the balance.
I recall a FatWallet thread, where a funeral home made a mistake on a death certificate, which went into to the SSA’s system and resulted in the guy’s banks flaging him as deceased. I dont recall all the details, but it was pretty clear that the error filtered down from the SSA.
For a bank account I’d think would be better to have a beneficiary named for the account as ‘payable on death’ or ‘transferable on death’.
At least in OP’s case since they only have the one heir in mind so it would be straight forward to just name that person as beneficiary. Then they just get the money and I believe it avoids probate too.
I don’t know much about how all this works but thats my understanding.
Delta reversed themselves on mile TOD and won’t do it anymore.
I’d definitely try to spend them down if possible, or use their login credentials. You’ll often also need a CC in their name too. I see people all the time in the frequent flyer forums having trouble with this when a family member dies.
Don’t the airlines claim the miles have no value to start with? Legality of transfer may be questionable but what is the injured party if a family member or executor transfer them without express consent of the deceased? How could the airline argue that they were harmed by the transfer of something they deem has no value?
If someone died wilth a million miles and then those miles were stolen instead of written off to 0, the airline is the injured party . Even if the miles may have no value as miles, if they were exchanged for something of value (tickets), the value can be established.