Wills vs trusts vs neither

[Anonymous]

Anonymous wrote:Do financial assets (Bank accts, brokerage accts, etc.) currently in the name of an individual with named beneficiaries avoid going through probate?
If not, will those same assets in the name of a revocable trust avoid probate?

Anyone?

[Anonymous]

Anonymous wrote:Do financial assets (Bank accts, brokerage accts, etc.) currently in the name of an individual with named beneficiaries avoid going through probate?
If not, will those same assets in the name of a revocable trust avoid probate?

Yes, but it is recommended that you do not use beneficiaries for most accounts other than retirement accounts so as not to inadvertently defeat the purpose of your will.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do financial assets (Bank accts, brokerage accts, etc.) currently in the name of an individual with named beneficiaries avoid going through probate?
If not, will those same assets in the name of a revocable trust avoid probate?

Yes, but it is recommended that you do not use beneficiaries for most accounts other than retirement accounts so as not to inadvertently defeat the purpose of your will.

This advice seems counter to everything I've heard.. Why subject yourself to the probate process if you can avoid it? Just make sure your beneficiary designations are consistent with your will. For example, I have accounts named in my individual name and have named my revocable trust as the beneficiary. All distributions will be subject to what the Trust says.

Agree that Bank and brokerage accounts pass to the beneficiary without probate..

https://www.pnc.com/insights/personal-finance/spend/what-happens-to-a-bank-account-when-someone-dies.html
"Joint accounts with rights of survivorship and accounts with payable on death (POD) and transfer on death (TOD) designations bypass the probate process, transferring directly to named beneficiaries."

Same goes for Brokerages too.. https://www.fidelity.com/life-events/estate-planning/asset-strategies/brokerage

[Anonymous]

Our estate is around $4M and we have wills with testamentary trust. It was hard to find a lawyer willing to just do wills; most estate lawyers see a professional couple, their brains fill with dollar signs, and they insist that not having a trust is reckless despite Virginia having a very easy probate process.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do financial assets (Bank accts, brokerage accts, etc.) currently in the name of an individual with named beneficiaries avoid going through probate?
If not, will those same assets in the name of a revocable trust avoid probate?

Yes, but it is recommended that you do not use beneficiaries for most accounts other than retirement accounts so as not to inadvertently defeat the purpose of your will.

This advice seems counter to everything I've heard.. Why subject yourself to the probate process if you can avoid it? Just make sure your beneficiary designations are consistent with your will. For example, I have accounts named in my individual name and have named my revocable trust as the beneficiary. All distributions will be subject to what the Trust says.

Agree that Bank and brokerage accounts pass to the beneficiary without probate..

https://www.pnc.com/insights/personal-finance/spend/what-happens-to-a-bank-account-when-someone-dies.html
"Joint accounts with rights of survivorship and accounts with payable on death (POD) and transfer on death (TOD) designations bypass the probate process, transferring directly to named beneficiaries."

Same goes for Brokerages too.. https://www.fidelity.com/life-events/estate-planning/asset-strategies/brokerage

PP here and the part about making your beneficiary designations consistent with your will is the part people screw up, mainly due to not updating them. Say you have two kids and they each have two kids so four grandkids. If you use beneficiary designations and one of your kids predeceased you your grandkids will be inadvertently disinherited.

Another possibility is you want to leave a certain sum to a niece/nephew or grandkids amd you keep it in an account earmarked for then. Your POA with the best of intentions doesn't know this and liquidated that account to pay your expenses that person was just disinherited.

Probate in most places isn't an overly complicated process (except CA). Bruce Steiner has some excellent posts in this regard on Bogleheads.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wouldn't the will need to go through probate before the testamentary trust kicks in? Doesn't that negate the idea of a trust to avoid probate?

Yes but the point is that for this size estate in this area probate isn’t a big deal. You will spend more avoiding probate than going thru it.

Lawyers say this because it means more money for them.

I set up a trust just a few years ago and the cost was nowhere near what op quoted. With young kids and covid around I wanted things spelled out more clearly. Also trusts are private. Wills are not.

[Anonymous]

Anonymous wrote:Our estate is around $4M and we have wills with testamentary trust. It was hard to find a lawyer willing to just do wills; most estate lawyers see a professional couple, their brains fill with dollar signs, and they insist that not having a trust is reckless despite Virginia having a very easy probate process.

Where are you geting this info that Va has an easy probate process? I can name 2 friends off the top of my head who did not find that true. The estates weren't huge but involved vacation properties as well as homes and various financial accounts.

Isn't it true that wills are public so people can see how much you are leaving to whomever. I know there have been cases of people and some scammy "charities" who have gone after inheritors once they see how much money is involved.

[Anonymous]

Must have:
Will
POA
Medical directive
Beneficiaries on retirement accounts, insurance policies. TOD/POD on brokerage accounts, bank accounts etc.
Also, DO NOT put children on any of your real estate titles. They will lose stepped up basis and it will be an expensive mistake.

Also, organize your accounts, policies etc. Handling an estate is a alot of work and it is really hard when it is sh&t show in terms of organization.

Optional
Trust. This is for people who want privacy and "control" from the grave. Most people do not need.

[Anonymous]

Anonymous wrote:Must have:
Will
POA
Medical directive
Beneficiaries on retirement accounts, insurance policies. TOD/POD on brokerage accounts, bank accounts etc.
Also, DO NOT put children on any of your real estate titles. They will lose stepped up basis and it will be an expensive mistake.

Also, organize your accounts, policies etc. Handling an estate is a alot of work and it is really hard when it is sh&t show in terms of organization.

Optional
Trust. This is for people who want privacy and "control" from the grave. Most people do not need.

"Control" from the grave. Funny. I would be concerned about not have a trust for young kids. I could see a lawyer taking advantage of young 20 somethings dealing with probate.

[Anonymous]

Anonymous wrote:Bank accounts don’t have beneficiaries.

You can have “Payable On Death” (POD). My Dad did that with his bank account. No need for probate there either.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do financial assets (Bank accts, brokerage accts, etc.) currently in the name of an individual with named beneficiaries avoid going through probate?
If not, will those same assets in the name of a revocable trust avoid probate?

Yes, but it is recommended that you do not use beneficiaries for most accounts other than retirement accounts so as not to inadvertently defeat the purpose of your will.

Oh god. Where did you hear this atrocious advice? I’m an attorney with an extensive background in finance. This might literally be one of the very worst pieces of financial advice that I’ve ever heard.

[Anonymous]

Anonymous wrote:We have more but under $5m, and I have a will with a straightforward testamentary trust. Everything but the house would avoid probate because we have beneficiaries/successors listed. The house has a mortgage with a due-on-sale clause, so it's not going into a trust any time soon. Until someone can convince me otherwise, I see no need for a trust.

We also came to the same conclusion. When we updated our will, we updated all of our beneficiaries.

[Anonymous]

We did a will and trust because we have no financially-responsible adults in the US to handle any of it if we both die, and we have minor children. Otherwise I don't know that we'd have gone through that trouble and expense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do financial assets (Bank accts, brokerage accts, etc.) currently in the name of an individual with named beneficiaries avoid going through probate?
If not, will those same assets in the name of a revocable trust avoid probate?

Yes, but it is recommended that you do not use beneficiaries for most accounts other than retirement accounts so as not to inadvertently defeat the purpose of your will.

Oh god. Where did you hear this atrocious advice? I’m an attorney with an extensive background in finance. This might literally be one of the very worst pieces of financial advice that I’ve ever heard.

Bruce Steiner, a nationally recognized trusts and estates attorney that posts frequently on Bogleheads.

[Anonymous]

Having just gone through this with my Dad’s estate, it’s far better to simply have named beneficiaries on insurance policies, investments, and financial accounts and transfer on death deeds for all real estate. Make sure vehicle titles have a co-owner listed.
In most cases, people can avoid probate completely.