I know a couple of older (70's and 80's) couples who had their wills updated and their attorney switched to trust and charged one $6k and another $10k. That sounds excessive to me.
The last older couple I knew had a pretty simple estate and their attorney advised them to use a will and probate it. The probate legal fees were $4k. This was a while ago but still... I was involved and it was nice to know it would be done right.
When we own multiple properties things become more complicated so with a trust someone really needs to know what they are doing. Has anyone done a will and probate lately? I need to update and have a friend in the same boat. Hate to ask an attorney who benefits from using a trust. Legal Zoom ok temporarily but want it done right. No spouses in either case I am thinking of.
Not looking for legal advice just some personal experiences. We are in Oregon.
@Jeff S. Post I did on BP. "Self Storage: So you just died, did you send everyone to hxxx?"
There was no reason, but the day I hit 30, I realized it was “ME”. Everyone around my family was doing fine, work was great, it was a nice day. Just for some reason, I realized I was the person in charge of my life. Its not like I all of a sudden matured. Paid my way thru college, top of the class, top 1% job, only got drunk twice in my life, etc, etc.
My realization was, I was it. Now I didn’t do anything with that thought. From that point on, until I was 50, I knew literally I could go through Mountains, jump over them, dig under them, go around them and stop Run away trains by hand. There was no obstacle in my life that I could not overcome.
And then it hit me. I ran into an obstacle, that I had no clue how to deal with, it could not exist (in my world), and the experts had no clue (from my point of view). No more Invincibility.
We are all at different points of our lives, perceptions of living into eternity, Invincibility, or just lack of thought on the subject. If your “there” and are aware of your lack of invincibility, please keep reading.
So you just Died. The following are actions not to put your Family through Hxxx. (Also Vendors, Customers, Bankers, employees)
A. “Will” or “Trust”?- Do you want things to go through Probate for several months or seamlessly go through a Trust with no stoppage in operations or control? Without a business, you might not care if your below a certain Dollar level or asset types that don’t deteriorate. Various discussion points- Bucket Trust, rename all of your assets to include the Trust, etc, talk with your attorney.
B. Power of Attorney- you can have this made specific to different aspects of your life. You may have a business partner who you want to be able to make decisions on your behalf for the Storage business, but have no say over your Personal life.
C. Bank Accounts “POD”- Payable on death, So you just died and who is going to pay the bills? This will automatically allow a person to access the funds and support the ongoing business. You probably have you and your spouse on the account already, so put somebody that is likely not traveling or living with you, in case both spouses pass at the same time.
D. Life insurance- not tax deductible, tax free proceeds. This is more about risk, comfort zone, lack of knowledge and stage of investment. With our fast growth we have taken loans out. All of the locations cash flow very well, so there really is no risk from losing a “wage earner”. It is more about taking pressure off the family members who will end up with the property. Also to cover any estate taxes or debt restructuring if they arise.
Where the major danger comes in, is if your in the middle of a development and your the main developer. The other family members only know how to run an existing facility. This is where you can lose a lot of money, if you have to sell the property and not complete the build out.
We identified three areas of risk and they are all on three different time tables. 1. Ongoing debt payments for existing units., 2. One location in Rent Up Phase., 3. One location in development phase and then Rent Up phase.
Per our advisor we took out three separate Term life policies. That way as the risk diminishes you can drop one policy at a time. If you had just one large policy covering all three risks, you would have to cancel a policy and renew. You have gotten older, any new health issues that arise, and the need to go through the review process again, may change your access and cost of an insurance renewal. Don’t get to exact figuring out your coverage needs, it is really cheap, go for the higher number.
E. Living Will; End of Life- This is more for applying medical treatment or not under certain circumstances to continue your life support, while you are incapacitated. Just added this so you have a complete package of estate issues. By this point you should not be in control of any business, unless you were incapacitated due to an accident or sudden medical issue.
F. Medical Power of Attorney- this allows someone to be in charge of your medical treatment if your incapacitated. Not so much a business impact, but wanted to keep the list complete.
G. Facilities Management- worst case, no one knows how to run or has the time to. Develop an “Info List” with all contacts and passwords. Identify ahead of time a Management company or local Realty company who you have vetted to manage the business. Have them identified on the list.
H. What does a storage facility look like 6 months after you have died? You go down to 70% occupancy from 95%. 40% of your customers are behind. Some customers haven’t paid in 6 months. No one can find the contracts. 5 of the units were yours. All of your systems are on paper and no one has kept up. Trash has been thrown over the back fence and the neighbors want it fixed. Weeds are everywhere. I come in and offer to pay 50% of the value. Ended up not buying your property. It takes about 3 to 4 months to get a location like this transitioned over to a management system and cleaned up, through auctions. Your investment value has greatly deteriorated since there was no transition plan.
So are you taking action; or are you sending everyone associated with you under the bus?
“Start small and Make Your Big Mistakes Early”
I’ve elected to do a Revokable Living Trust (being in my 30’s). Some of the basics of a RLT are:
- more thorough;
- let’s you set up who will get what…when and how;
- helps avoid probate and creates great privacy (assets and identities);
- you get a trustee;
- makes things much more efficient and cost effective;
- can be changed during your lifetime, if and when necessary.
Of course, I’m not a legal professional and one should be consulted, but this is what I’ve learned through my personal experience so far. Hope this helps!
Also, the law firm I handled this with is one of the best in the nation and even with my complex set up it only cost $1500.
After much research I switched from a trust to a Will, POA, and Medical Directive. The Trust was a 8" thick pile of unnecessary hoopla, whooptedo, and verbosity. I paid a lawyer $6,000 many years ago to set up the trust. It caused me nothing but headaches and trying to keep it current with all my business transactions was an absolute nightmare. On the other hand they're terrific for all the attorneys that have the gaul to propagate these monstrosities. Just my opinion of course :)
Also, the law firm I handled this with is one of the best in the nation and even with my complex set up it only cost $1500.
Could you share the name or contact info of the law firm?
Also, the law firm I handled this with is one of the best in the nation and even with my complex set up it only cost $1500.
Could you share the name or contact info of the law firm?
Absolutely. KKOS Lawyers (kkoslawyers.com). You can also look up two of the partners, Mark Kohler and Mat Sorensen. Phenomenal education through podcasts, YouTube videos, their books, etc.
@Adam Carpenter what is the name of the law firm. I live here in McKinney, Texas.
Thank you for the response @Jerel Ehlert. This is interesting in that you are not saying use a trust most of the time. What I wonder is what is complex? Is having a few rentals and stock brokerage accounts simple regardless of the worth as long as you stay under the tax exemption limits? Also wonder about doing probate with the court system being stressed from the pandemic that will never end.
I see you have a decent background investing that is awesome.
@Adam Carpenter wow yet another pro trust opinion. Question? What do you mean you get a trustee? Is the law firm your trustee? Many TX responders.
There is an anti trust post @Jerry Lucker that puts the fear into those of us not knowing anything about trusts. Thanks for that. And a Seattle guy with a lawyer close to home. No lawyer with the will or did you find one that agreed the trust was a waste of money and time?
@Adam Carpenter wow yet another pro trust opinion. Question? What do you mean you get a trustee? Is the law firm your trustee? Many TX responders.
Great question! Basically,having no will leads the state to distribute your assets according to state law. Having a willleads to a very potentially dreaded probate process, subject to the courts determination of whether or not the world is validleading to the mere, intended distribution of assets. However, with a trust you get to determine who will be the administrator(s) and steward(s) of your clearly outlined plan — the trustee. That plan can be robust and creative. The great thing about having more than one trustee, provided it’s a well-crafted plan, is, for example: you might not want someone who knows nothing about handling money to be responsible for handling all of the finances. So, you can essentially assemble a trusted team to administer your plan and can position them where it makes sense to position them. Of course, a trust isn’t necessary for everyone — but it can certainly be helpful based on the assets that one has (property, intellectual property, bank accounts, retirement accounts, companies, etc.).
Usually if you have a trust, you will also have a will. These are typically known as a pour over will in that they usually will stuff to the trust. My wife and I set up a trust and a will shortly after we got married and are currently updating both for the first time. (it's right beside me awaiting final review) If the documents are done well, they don't have to be changed frequently. We're in a different state now and it's been more than 30 years, hence the revision.
@Adam Carpenter what is the name of the law firm. I live here in McKinney, Texas.
Sweet! Go, McKinney! 🤣💪🏻 so,I work with a few different law firms for their unique reasons and each are out of state. But, this particular firm is KKOS Lawyers, located in Cedar City, UT. Their client base is very spread out all across the nation. You can also find out how a lot more about them, specifically two of the partners in the firm, by searching the names Mark Kohler and Mat Sorensen.
@Jeff S.
I would look into the tax benefit of a trust vs a will. Talk to a cpa because I’m pretty sure the tax advantages of putting a property in a trust far outweigh them just a will. If not your family has to pay the tax gain from your purchase price. The other way they aren’t taxed because they receive the property at current market value. I read it in Amanda Hahn tax strategies book. Look into it might be well worth it for your family.
Don’t quote everything I’m saying exactly do your own research because I am not a CPA.
@Jeff S.
I am working on my estate plan with KKOS lawyers that include a revocable living trust, a will and a power of attorney for $1200. It was a special they were offering.
I know a couple of older (70's and 80's) couples who had their wills updated and their attorney switched to trust and charged one $6k and another $10k. That sounds excessive to me.
The last older couple I knew had a pretty simple estate and their attorney advised them to use a will and probate it. The probate legal fees were $4k. This was a while ago but still... I was involved and it was nice to know it would be done right.
When we own multiple properties things become more complicated so with a trust someone really needs to know what they are doing. Has anyone done a will and probate lately? I need to update and have a friend in the same boat. Hate to ask an attorney who benefits from using a trust. Legal Zoom ok temporarily but want it done right. No spouses in either case I am thinking of.
Not looking for legal advice just some personal experiences. We are in Oregon.
Jeff,
It depends on several factors. Wills require probate, trust bypass probate.
It is far more complicated then that, however. In order to take advantage of estate tax exemptions of 11.7 million per person a married couple might need a spousal lifetime access trust if their assets are lopsided. This is one of many estate tax savings strategy the average person has never heard of.
My point is, a well versed estate attorney is worth her weight in gold. Your example of 16k in fees is high if net worth is minimal. If net worth is substantial that fee is a bargain.
I've paid over 50k to have my trust properly created and administered. High? Not if you compare it to the estate tax I will save.
If my kids had to sell assets quickly to pay the estate tax, the loss on those assets plus the tax could easily be 20 times that amount.
Bottom line is fail to plan, plan to fail.
I'm no attorney and this is not legal advice. Just a recommendation to get some from the best you can locate.
Respectfully,
Gary
From what I’ve always known a trust is effectively a will on steroids and allows you to have far more co trip over your estate. For instance, let’s say you have $1MM life insurance policy and you pass with the beneficiary being your young kid. Under a will, the day they hit 18 they get $1MM👎. With a trust you can say nope, they get $1MM at age 40 or 500k at 40 and 500k at 50 etc…. Much better instrument for insuring what needs to happen happens. I’ve been quoted about 4K for one.
@Jack Orthman
Your CPA sounds like a slimeball👎
Following this. I currently have a living will and arrangements made for kids and valuables for my wife and I. I was planning on researching trusts and talking with my attorney to see if this would be the best route. I have always heard the transfer of assets is easier and more timely through a trust providing it is up to date with the persons involved. Not to mention could save on the taxes and fees associated with transferring the assets in a will only. This seems to only be more complicated the more properties and partners you have, at least in my simple mind.
What I did to try to make life easier both for when I am here and for when I leave this world is I 'Gifted' a significant amount of real estate to my 4 children so there will be no problems with transferring the properties and so they can enjoy the money and benefits of owning real estate while they are young enough too.
As for my wife, she gets everything else, anyway. I n fact, now that I think about it, my wife is not on the title for several properties and I will start taking care of that today.
I know a couple of older (70's and 80's) couples who had their wills updated and their attorney switched to trust and charged one $6k and another $10k. That sounds excessive to me.
The last older couple I knew had a pretty simple estate and their attorney advised them to use a will and probate it. The probate legal fees were $4k. This was a while ago but still... I was involved and it was nice to know it would be done right.
When we own multiple properties things become more complicated so with a trust someone really needs to know what they are doing. Has anyone done a will and probate lately? I need to update and have a friend in the same boat. Hate to ask an attorney who benefits from using a trust. Legal Zoom ok temporarily but want it done right. No spouses in either case I am thinking of.
Not looking for legal advice just some personal experiences. We are in Oregon.
First guess time says the older couple had fairly large, complex estates. Fees are usually commensurate with the work involved.
Doing a trust should not be THAT expensive unless there is a lot to deal with. We did that with my Mom's estate not long after Dad died. I remember it only being a few hundred dollars ($350?).
@Adam Carpenter finding a trusted team is the problem for me. I admire that you have that. I watched a young stock broker take over my moms brokerage accounts after my father passed and that was a learning process. That was where I learned that money goes in their pocket first.
@John Teachout sounds like you have a trust that is satisfying to you. That pour over will makes sense so you don't have to sweat everything being signed correctly. So I take it the pour over will doesn't need to be probated.
Thanks @Justin Sullivan will have to get that book. Was thinking heirs get a stepped up basis. If the estate is huge then certain kinds of trusts apply. I am not dealing with anything that big so don't think taxes is an issue.
@Olivia Leija I love those specials too. Why did you do a revocable trust as opposed to any other type? I kind of like that idea.
@Jeff S.
Holy cow. First, I’m sorry to hear that. But secondly, that makes perfect sense and if one or more trustworthy parties can be attained, then it would absolutely be helpful for sure.