Check out your state laws on using the Transfer on Death title on what you wish your partner to inherit. Property, accounts only transfer when you die.

However if you become incompetent and have a guardian appointed the guardian can reverse anything you do. Better to do a will unless married.

In Kansas you can put POD (pay on death) on your money accounts and put TOD (transfer on death) on your home and car. All she has to do is take in a death certificate, I don't know how she will do that if you have family who claims your body. I think this would be a national thing, but you can check it out at the bank. That is what I did with my assets and my lawyer suggested a small will to cover everything in the home and things I might buy before I die. The will cost $50. Some lawyers will counsel with you for free on the first visit. I would speak to one if I were you to see how your friend can take care of your final arrangements and get the death certificates she will need.

I think trusts are the way to go in most states. If you go that route, you need to do it sooner rather than later. Wills can be contested, not necessarily successfully, but it could make life very difficult her if a family member chooses to fight. There are huge differences from state to state as to how estates are handled. An estate attorney can tell you what you need to know with certainty.

Thanks!

My primary concern is that she "get everything" without taking a big tax hit.
For the most part, I have tried to put her name on all of our accounts and possessions.

If I do the living will or trust, won't she pay some sort of inheritance tax?

Inhertitance tax is for estates over 5 million dollars. Have you got that much?

See an attorney. The main things that trusts do is make it very easy to handle the estate and avoid the attorney fees that go with probate, which requires attorneys and courts. Trusts help you avoid that.

This post was edited by sushipup on Mon, Mar 17, 14 at 16:53

Sorry I answered wrongly

This post was edited by EmmaR on Mon, Mar 17, 14 at 17:12

Here's another vote for sushipup.

Emma, I'm sorry that you seem to have a difficult and estranged relationship with your family. I believe most wills and dispositions at death aren't contested, as you seem to fear. The OP is trying to provide for a loved one. Your situation sounds so different, you seem to have decided that misleading your family and leaving your money to others is the right path for you. That's sad but it sounds like you're happy with it, so great!

One thing I learned (the hard way) a few years ago, is that while it is true that for estates below a certain amount there is no inheritance tax owed by the estate, inheriting can involve other taxes.

An aunt of mine passed away, and since she had no children, and since her husband had passed away before her, and since she left no will, her estate was divided equally between her siblings. And in my case since my mother had already passed away, what would have been her share was divided between her children. At that time the amount was $1M (IIRC). So I received 1/4th of 1/11th of her estate, which amounted to about $24000. However the vast bulk of her estate was from a 401K-type retirement account from her husband, and since the money in it had been invested pre-tax, upon receiving it I owed income tax on it, which came as a big surprise in April of the next year.

I have since been told that I could have rolled the money into a 401K for myself, and not have had such a big tax hit.

I had never met this aunt, and had been told that when she was 18 or so she got into some big fight with her family and swore that she would have nothing to do with the rest of the family for the rest of her life. As far as I know she was true to her word. Even though she lived in the same city with three of her many siblings and her mother, she had no contact with any of them. She might have preferred a different outcome, but since she didn't take steps to make her wishes known the existing probate laws determined who got her estate.

To the OP, I don't think it is difficult to do what you want, but for sure you have to do something, since in absence of that the laws of your state will decide what happens.

You might also want to look into your state's levy on inheritances - not just the Fed. There are some tax jurisdictions that levy inheritance tax - your state may or may not be one of them.

We get clobbered in Minnesota - kept the Fed rate at $1 million, but everything above is subject to the state.

Sometimes law trumps what you want to see happen. There are laws re IRA's, joint accounts, property, etc. You may not be able to have her Completely Avoid all taxes or (e.g. probate) fees, it even costs to get death certificates, but you can Minimize her financial burden(s) by having a will and estate planning. Bottom line, see a lawyer. p.s. I am not a lawyer, but have done this type of planning before.

Ok...
Well, with regard to family "issues", I have none that I know of. In fact, I may be the black sheep of my family and the last thing on anyone's mind is somehow getting their hands on my stuff! (it makes me laugh to think such a thought)

Still, it seems that many of the accounts that I have (if not all) do ask about who I want as a beneficiary.

My life is not complicated and I have no kids (and no plans to have them). It is just me and her and modest assets.

Of course you need an attorney to make sure you have the necessary documents in place with your wishes spelled out. I just watched a Suze Orman special and she recommends a Revocable Living Trust.

And get a real attorney, and not one of those people who holds "seminars". A real attorney will ask pertinent questions and draft documents just for you and your situation. And be there to answer questions, too.

A trusts and estates attorney. Some also specialize in Elder Law, but don't let that throw you! ;-)

Second time voting for sushipup

The law never trumps a decedent's wishes concerning a lawful disposition of assets. That's why you have so many dummies leaving millions of dollars for care of their Chihuahua dogs or tabby cats.

It's possible that what an individual wants to do (in ignorance of rules and costs) is not the best choice from a tax standpoint, but nothing stands in the way of most normal alternatives.

bump

>>The law never trumps a decedent's wishes concerning a lawful disposition of assets. >>

Well.....yes and no. If you have a properly drawn up will, along with the extremely essential Healthcare Durable Power of Attorney and Financial Power of Attorney, it HELPS to enforce your wishes.

But even distant family can have rights that allow them to contest the disposal of a relative's assets to someone who is NOT related or a legal spouse. In fact, these kinds of suits happen quite a lot.

I'm a long-time friend of someone who inherited a couple of million $$$ from a non-relative and was eventually forced to share the estate after being sued by a distant cousin of the deceased.

I have also seen a family of siblings completely torn apart by one person's obstinacy about dividing 67 cents into exact thirds. Stupid as it sounds, this person refused to budge for almost two years over One. Single. Penny.

I second (or third, or fourth) the suggestion to speak to an estate attorney. You also want to consider the "step up" basis of inheriting real estate, if you are concerned about taxes. In such cases, joint ownership between non-spouses can eventually result in a larger tax upon the sale of such property.

One basis I've heard of for a will being contested was when it did not specifically disinherit all relatives to whom the deceased did not want to leave a share. This is another argument for setting up a Revocable Living Trust and re-titling all assets into it.

YMMV - So I recommend seeing an attorney that specializes in estates and trusts, and don't forget to get a clear answer about tax consequences. There is often no charge for the first visit when just for the purpose of evaluating what you need to do.

My neighbor had a relative who set up assets to go to a charity because of her kids behavior toward her. Her kids contested it and they won. That is so wrong.

"My neighbor had a relative who set up assets to go to a charity because of her kids behavior toward her. Her kids contested it and they won. That is so wrong."

Her kids most likely contested and won because whoever wrote her will and set up the contingencies didn't do it correctly.

Most of the time that wills are contested its because they're either written too late (and it can be argued that the deceased wasn't competent at the time), or they're ambiguous.

If you have 3 kids and want each of them to get a third, don't say "split it evenly between my children", say Billy gets 33%, Jimmy gets 33% and Jenny gets 34%. If someone comes forward in the first situation and says they're you're illegitimate child, you've got a problem. In the 2nd, you don't.

Joppa Rich is correct. It's not that challenging to write a will to protect against undesired outcomes, but there are plenty of crappy lawyers around and not everyone uses a lawyer anyway.

Emma, I'm sure your neighbor's kids would tell a different tale about that relationship. Who's right and who's wrong in cases like this, as with a divorce, is never clear-cut.

I think it's sad that a parent would allow a familial relationship to sour to the point where cutting out kids and leaving a goose-egg as a nasty parting message is warranted. This happened to a friend of mine and it was nothing short of laughable. This parent's attempt to "deliver a message" in the will had long since been delivered in-person and many times ignored in-person, it was the last futile act of a sad and unhappy person who had become impossible to deal with over the years.

The responses here seem to be heavily in favor of RLTs vs wills.

As someone who has an RLT, I actually have to disagree. In a good many instances, wills that are **properly drawn up** are just as viable a solution as RLTs, and much less expensive.

If you in fact do have a "modest" amount of assets, a will can certainly do what you want. More importantly, you want what goes with it - the durable healthcare power of attorney with POLST and financial power of attorney forms. You'd be surprised how many people think everything is fine with just a will and forget about those two additional forms.

Believe me, you can have a badly set up RLT just as easily as a poorly written will. Find a lawyer with good references who specializes in estate planning, and get your legal affairs in order ASAP. Your partner currently has NO protection as it stands, and no legal standing whatsoever. You need to correct that, fast.

snidely......As far as knowing only one side of the story, my oldest son was a truthful person and if he was in on this post he would tell you I raised him right and when he did something wrong he knew it was wrong and he didn't care. He told me that one time. I could not live with him and his drugs, booze and his foul mouth.

You have no idea how bad people can be even without being criminals. Some are unlovable as was my oldest son. They do things that are unforgivable. My older son started drugs at the beginning of his soph year in high school. All he wanted to do was party and drink. He lived off of women who would would support him. Later he had 3 sweet babies, one was a newborn when the mom threw it across the room at him, luckily he caught it . He didn't change a thing, he left the babies with her day after day. She left them with a neighbor who she barely knew and didn't come back for weeks. The neighbor eventually called children's services.

I did not hear from my son for over 20 years. I did not know if he was dead or alive and I could have died and he would not have known.

As for my youngest son goes, he only wanted my money, when I said no more I never heard from him again.

This is all very painful. I will not post here again. My oldest son died last month. He died alone, unloved, no friends or family and his kids hated him. He was 56. He had no one at his burial and is probably in a potter's field somewhere.

jkom - I believe that for the most people, there is one (and only one) difference between a will and a revocable trust. An asset disposition prescribed in a will must be probated (a court supervised procedure entailing statutory lawyer fees and court fees) while one prescribed by a trust doesn't. That can save from several to many percentage points (of the property value) of costs. It's also a faster means of getting property to the heirs, especially so with larger estates. Otherwise, what you can do with property, how the lawyer does so, etc. I think is mostly the same. Two roads that lead to the same end.

Most people who have a trust for property also need a will to direct property outside the trust into the trust and to communicate other wishes.

As a retired lawyer whose bread and butter came from estate planning, I urge you to see a lawyer and not rely on any "advice" found in this or any other website. Laws differ from state to state. A trust is much more expensive to draft than a will but much cheaper to implement than a will through probate. Often it's six of one, half dozen of another.

It's also very necessary to have the other documents, called advance directives, especially since you aren't married as your SO might not even be able to visit you in ICU without one.

I repeat. See a lawyer. That's the only advice given by many above that you absolutely need to take.

Thank you, dockside - I was just about to reply to snidely's "...there is only one difference between an RLT and a will", when you did it for me.

Unless you have an RLT and have had to make changes to it - our planned update to our RLT will "only" cost about $900* - some people have absolutely no idea what's involved and make blanket general statements that are not really based on fact.
(* real life cost - life in the San Francisco Bay Area doesn't come cheap!)

So please, OP, see an estate lawyer. Get some sound, personal advice. We had a DIY will and advance directives for years until we got our RLT and frankly, now I shudder at the risks we were taking by not getting professional advice in the first place. When we were in our 20's and didn't have much except our clothes and books, that's one thing. But by our 40's, we had substantial assets altho it took us another ten yrs to make that lawyer's appt!

A $50 marriage license is the cheapest easiest solution that is sure to work.

>>A $50 marriage license is the cheapest easiest solution >>

Not always.

For one thing, in a community property state the one with the most assets immediately loses half of it to the other. I often joke with my spouse that he can't afford to divorce me, but it happens to be true, LOL.

Conversely, it is not unknown in separations for an aggrieved spouse to start running up huge credit card bills, knowing that the breadwinner is stuck paying the bill or risking his/her credit ruined. In fact, this is currently happening between friends of ours: the wife is the breadwinner and the husband has been the stay-at-home spouse, raising their daughters, for over ten years. She is going to lose half the value of the home and half her retirement portfolio, plus have to pay him alimony.

He has recently taken several trips overseas using their credit cards, which are all joint accounts. She was not invited to join him; he simply announces he's leaving the next day and will be gone for a week or more.

With over 50% of marriages ending in divorce, there is absolutely no reason to assume that a piece of paper is the best solution any longer.

I think marriage is protection for the woman, especially the stay at home Moms. I can see it depends on the state you are living in. People you love or loved can turn into complete strangers when money is involved. I would never marry again because half of what I have left would immediately be his and if he had to go to a care home I would be paying half of my savings to the care home.

"because half of what I have left would immediately be his."

You are incorrect, Emma. That's what wills, trusts and prenuptial contracts are for.

Under California's community property rules (that's where you are too sushipup?), property acquired before marriage that isn't co-mingled remains separate property, even without a prenup. There are other categories of property that also remain separate (like post-marital gifts and inheritances not co-mingled). In separate property states, I can't imagine it being terribly different.

Prenups are fine for people with a lot of property, to acknowledge what is what and what expectations are, but are not essential for straight forward matters clearly dealt with in the law. This could vary from state to state.

How can you say it is not true. Do you think I am lying or misinformed. I don't make statements like this if I am not sure of the facts. It is true in my state. That is what a lawyer told me. A will cannot over ride the state law. Also if your spouse has to go to a care home all money of both parties are included in the assets. My sis was really upset when she found out our inheritance would be included if she put her husband in a care home. The lawyer told me a marriage is a contract agreeing to care for each other, even if you don't put your money together it is included. Been there done that.

I think that you probably do not have complete correct information. This is a complicated issue and each scenario will be different.

Emma, this thread has talked about bequests, marital property and property divisions, and you seem to be concerned about costs for elderly persons in assisted living facilities. I'm not sure where it is now. These are all different topics.

I think you may be a tad misinformed or you're confused by combining advice concerning unrelated matters and treating them as if they were the same.

This thread has probably outlived its usefulness (if it had any), there's enough confusion. I agree with the multiplicity of prior comments that those with questions should get advice from qualified professionals. (For the record, I'm a recently retired CPA).

Here I thought it was to protect the loved person. That protection should include up to the day both people die.

A will can not go into effect until the person writing it dies. EmmaR's comments are then true about the state law overriding things that you plan. Since it appears the OP was concerned with passing/providing for a loved one. Many of the comments are correct for unmarried people. There are some protections for married ones but to me it does not sound if OP plans on marriage.

Community property laws vary so much from state to state that a statement about one states laws mean nothing in another. Inheritance laws are the same. An example is when my parents and his parents died. Neither had a will. Husband had to wave his rights to a spousal portion of my fathers estate. Neither I or the sister-in-laws signed anything when his father died.

Not really posting this for the OP but for others in similar situations.

Regarding the example of the wife who is a breadwinner and the husband has been the stay-at-home spouse, raising their daughters, for over ten years....the breadwinner should know (better) that the home and retirement portfolio are owned by the couple instead of only by her. He is rightfully getting half of what they have cumulated during the marriage as well as alimony, her pension if there is any.

I work in high tech industry and have been holding high stress jobs for years. I am also blessed with two healthy, bright children who are incredibly self-motivated. In MHO, none of my job is more challenging than the years when I stayed at home raising children.

I recall in the 90s, our successful cardiologist and trial lawyer friends paying peanuts to their divorced wives who had supported them through medical and law schools, and then stayed at home raising kids. May be things have been improved now, but based on what I have read, I still think our society does not assign sufficient value (both tangible and intangible) of the contribution from a stay at home spouse.

>>the contribution from a stay at home spouse>>

This is OT, but my post deserves a bit more explanation:

Ah, but you see, in my example, it isn't so clear-cut. He has TURNED DOWN lucrative job offers even as two of the three daughters are now out of the house. He holds twelve high-tech patents that are extremely valuable, but only if one is willing to sue some big companies. And he refuses to do that, because (of course) it would drain their current finances severely. His stated reason is "I'm going to leave them to the kids."

He was formerly an extremely successful sales rep for a large medical equipment firm, making six figures. His wife, in contrast, has struggled with a killer commute - two hours each way - and only in the last two years has made it to the six-figure mark as an administrator.

Her job prospects were never as good as his. He originally left his job to start a new company which failed, and he spent years and $$$ trying to get his original three patents back. That effort didn't succeed, but he did retain the rights to any future patents, which he's taken advantage of.

I am worth more dead than alive. I am set up that my life insurance (Not part of my estate) will help my family most of all. My estate will be a major PITA for them, but my life insurance should not be.