I asked some friends for recommendations for a wills and trusts lawyer. I called one of the names given to me, and he seems really good. He's both a lawyer and a CPA, charges a flat fee for the documents, and future changes are free. We talked for about 40 minutes. He said that if all I wanted to do was change the executor and guardian, that it was probably going to be cheaper to go back to my original lawyer. On the other hand, my original living trust was established when I was single, and he would recommend gutting it and converting it to a "double trust" where it is joint between DH and I. He very strongly recommended putting our house into such a trust in order to avoid probate, and naming the trust as beneficiary to all life insurance and retirement vehicles. He pointed out that if DH and I both die, my existing trust has provisions to prevent our children from inheriting and blowing all the money at a young age, but our retirement money currently would go to them immediately. His normal fee for a single trust is $1400 and for a double trust is $1800, but he said he'd do it for half that since I already have a trust in place.
Still, $900 is a lot of money right now -- either our laptop or vacation fund. How awful is probate anyway? Do we really need a trust at this point?
The existing trust has a bit of bad history behind it. When we got engaged I had a bunch of stock options that were going to hit it big (yeah right -- we all know how well that one turned out) and we compromised by putting my assets in a trust instead of drawing up a prenup. So now the stock options are a net loss, but this trust is sitting out there with about $300k of mututal funds in it and the wrong successor Trustees on it. DH hates to talk about the "what-if" details you need to go into when planning life insurance, wills, etc., so getting all this straightened out is not going to be fun.
In other news the 400 point drop in the market yesterday dropped my portfolio value about $15k-$20k. I didn't even think to check until other people mentioned how it affected their portfolios. I don't watch my investments much -- I tend to err on the side of inaction. Happily I can still call myself a millionaire because I'm just over $1M. I'm ok with being 100% invested in stocks because these kinds of drops don't bother me and because I have enough of a nest egg that even with a big correction it's still a good amount. DH will be happy -- he's got $55k sitting in cash in a rollover IRA, so it's a good time to invest.
Thinking about a living trust
February 28th, 2007 at 11:21 pm
February 28th, 2007 at 11:40 pm 1172706032
ask him if he will take payments for several months.
March 1st, 2007 at 12:11 am 1172707868
If nothing else your heirs will thank you, your child will be well provided for (instead of assets being tied up in court). Even with community property it can get sticky without trust.
I would be careful about naming a trust benefeciary of retirement funds. IT could have tax issues. I can't remember what my lawyer said about it - glossed over. For your spouse - better off being direct beneficiary I believe. Depends on the vehicle. Hmmmm, I will have to ask about the kids. Our lawyer was kind of vague on this, but that it was better not to involve the assets in trust. We have a little bit of everything too (401k, IRAs, pension). I think I am going to call her because I am really confused now. Probably glossed over because we don't have much in them now, our smallest assets. But I Am thinking ahead now.
I think in your case it would be $900 well spent. What a deal!
March 1st, 2007 at 02:52 pm 1172760748