Revocable living trust vs Will package (Will, Powers of Attorney & Advance Dir.)

[Physiciancouple.com]

I was referred to an estate planning attorney. My initial email from her was: "Overall cost for a Will package (Will, Powers of Attorney & Advance Directive for Healthcare) generally ranges from $2,500-3,500, and would include some language to minimize your potential exposure to state tax which we would discuss in detail at the 1st meeting.   We would also talk to you about a revocable living trust—which is an alternative to the Will package that avoids probate.   You would hear about this choice at the first meeting.   If you wanted to go with a Revocable Living Trust package instead of a Will package, the cost would increase to $3,500-4,000.   Of course, I happen to be the most expensive attorney in the firm.  If you wanted to meet with one of my colleagues, the overall cost would be lower."

We are leaning towards a revocable living trust based on what I have read. This individual comes highly recommended from someone I trust. Any thoughts either way (including on cost)?

Thanks.

[q-school]

I believe if you have kids you still need a will.
We have been through three wills. Costs are inline with what you mention.

When kids are older we likely would switch to trust.
Is part of the trust cost they quote you them taking on the responsibility of retitleing assets?

[ajm184]

12 years ago, my wife and I got a revocable trust, wills, POA's (Healthcare and Financial) for $1,200.  Late last year we looked into updating the documentation as we had moved to a different state in the interim.  They attorney we spoke with wanted $2k to restate our existing plan; basically put into the firms documentation and neaten up the existing paperwork.  Didn't pull the trigger, can't stand the thought of paying almost twice as much as original cost for a set of documents that works.

IMO, a trust is a useful approach to hold major assets.  We hold our checking account, home, and cars in our trust.

[Physiciancouple.com]

Thanks. Anyone have any other questions they recommend I ask besides whether the flat rate includes retitleing assets?

Also concerned about how “future proof” these documents are. I’m done having children but might purchase addditional property, open more investment accounts, etc. I don’t know how these updates are typically treated.

[Miss Bonnie MD]

These documents are pretty straightforward for the first marriage for both parties type of marriage with kids.

Not sure where you are in your careers/age, but you may not need a living trust now. Estate planning is not a "one and done" type of thing though, it does need to be reviewed periodically. Basically, what would go through probate now? For most it's mainly the home. Almost everything else has a named beneficiary. I am simplifying things of course.

With children, you can get fancy and create a trust in the will so that if your spouse re marries, the assets go to the appropriate people (your kids) and not your spouse's new spouse.

p.s. I am not a lawyer

[StarTrekDoc]

We just redid our Trust.  Trust usually will have the Will package to pour all things related into the Trust.   Trust in simple terms gives a lot more specific directions to the Agent on who and how the funds be managed.  It can get really wild too.  We added our pets into the Trust this time around

There's really no 'future proofing' things to be automated.   Getting new assets into the Trust is easy.  Real Estate is easy to do at time of closing where the Title company/attorney will do that.   Also, paying that amount you are for the Trust, usually will include a yearly checkin from the Attorney to ensure you're keeping the Trust and all its contents updated like the POA and Healthcare directives

 

[Physiciancouple.com]

I want to be able to clearly spell out who gets custody of the kids, and how the money will be doled out (it is already >5mm now including life insurance, and it will be a lot more in the years to come). For instance, X amount per year/child for private precollege schooling in addition to X amount for annual living expenses/child under age 18; X amount for college/living expenses to be paid by the trust; excess to be distributed evenly at age 35 to each child. If possible, even down to the detail of I want this money to be invested in such and such way until these various distributions are to take place.

Essentially the person who would be raising the children is not financially savvy whatsoever and I would like to make sure we have a clear separation financially and that our wishes are honored.

[StarTrekDoc]

Trust absolutely for you IMHO.    You can assign a fiduciary custodian to go with the Trustee if the don't believe the Trustee has the financial chops and spell out specifically the things you mentioned.   We have x dollars release at x time and x situations set aside with backup contingencies  that was included this time compared to a quite vanilla Trust 16 years ago when the kids were babies.

That's the beauty of the Trust.  You can update it at any time too on the specifics and witnessed and signed.

 

 

[q-school]

Physiciancouple.com wrote:

I want to be able to clearly spell out who gets custody of the kids, and how the money will be doled out (it is already >5mm now including life insurance, and it will be a lot more in the years to come). For instance, X amount per year/child for private precollege schooling in addition to X amount for annual living expenses/child under age 18; X amount for college/living expenses to be paid by the trust; excess to be distributed evenly at age 35 to each child. If possible, even down to the detail of I want this money to be invested in such and such way until these various distributions are to take place.

Essentially the person who would be raising the children is not financially savvy whatsoever and I would like to make sure we have a clear separation financially and that our wishes are honored.

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we have that spelled out in our will as well.  there are financial services that can manage the money if you don't trust that the individuals raising the children can manage the larger amounts in the way you think they should.  it's a funny thing.  raising the children is such an important issue, but somehow we think that they can do it (or at least someone has to) but they can't handle the money part?  my sister will get my kids, but my medical school roommate has agreed to manage the funds (both are aware of the request).  but we set aside a fairly significant chunk to go to sister--since suddenly there groceries, summer camps, clothing bills, vacations will be more expensive.  but somehow we wanted our kids to receive our legacy, not that my sister should buy a bigger house or retire to raise our (and her) kids.   difficult questions.

 

[thomashackett]

Those prices seem fair to me. I know an attorney who does at least two 5+ hour meetings with clients and charges several times what you were quoted. I also know an attorney who will draft a will for less than I charge for a consultation.

I like the attorney seems to work on a fixed-price model. Attorneys with expertise in area know the work it takes to do plan and should be able to give you a fixed-price with defined scope of work.

[Asher]

I practice law in this area.  I think that the prices quoted are reasonable, especially in light of the specific directives that the Original Poster wants to include.

As to a trust versus a will, in general, I think you should consider both concurrently.  As noted above, a "pour over" will is a good idea.   I wrote an article on this topic, here.

The attorney's flat rate should include transferring or re-titling currently owned assets into the name of the trust, but not future assets.  An attorney's retainer is usually not open-ended such that new assets acquired, for instance, two years after the legal engagement are still covered two years later.  However, newly acquired property can be titled in the name of the trust (or directly deeded to the trust), new investment accounts can be opened in the name of the trust, etc.

 

[Craigy]

The best estate planner is going to be a referral from a trusted friend or colleague.

As far as whether or not to fund an inter-vivos trust, that's something to discuss with the attorney who should have a grasp of your specific state's probate laws and your situation.

Cost seems reasonable.  Figure ballpark anywhere from $200-$500/hr, at least ten hours from start to finish, more if you tinker, more if you're retitling a lot of property.

It doesn't sound like you're a candidate for a cookie-cutter $100 or $500 will.

[jfoxcpacfp]

the rates sound fair enough if you're in a metropolitan area especially. They will vary depending where you live and the competition among attorneys. I have always been of the opinion that whether a RLT is needed or not is case- and state-specific and should not be automatically assumed necessary. I know they are usually promoted to save time in probate but some states have a very swift and inexpensive probate process while others do not. Trusts accomplish more than asset protection (which an RLT will not handle, btw) and are extremely beneficial for control beyond the grave. But they are also more expensive to set up and to maintain. You need to really examine your specific goals and situation as each person's needs are different and there is no OSFA solution.

Given the requirements laid out by @physiciancouple, I would lean toward a testamentary (irrevocable) trust. Later on, might even consider setting up a non-grantor trust if you might have a taxable estate. It will, of course, cost more but you indicated there would be significant wealth. The trustee would be someone with more financial knowledge and w/b separate from the guardian of your children. The testamentary trust would go into effect at the time of death and continue under the rules of the trust document that you have established.

If you use a financial planner (preferably fee-only), that might be the best place to begin your search for referrals. CPAs can be another good resource. The financial professional typically knows what attorneys do good work themselves (vs. the legal secretary and asst.) and charge a fair price. S/he will also be able to help you articulate what you need and don't need in the documents. Be sure to ask the FP/CPA if they are compensated for referrals and/or if they have an exclusivity agreement in place. I would not be as comfortable about getting an unbiased recommendation in this situation.

You'll need a LWT, regardless, so that is not an either-or choice. And you need to update your documents periodically, as Miss Bonnie MD said.

But I'm not your advisor. And I'm definitely not an attorney - you've gotten some good legal advice from the pro's above.

[AlexxT]

Agree with everyone above.

The prices are reasonable, but I'm concerned that you were offered an "either / or " for the will vs trust.    I'm not an attorney, but I'm pretty sure you need both.  At least that's how my attorney explained it to me.  We each have a will, trust, power of attorney, health care directive.  I added letters of instruction.  I have a bank available as a backup trustee, as my children are still young, and since I realized that my family wouldn't be able to handle it.  Plus, there would be conflicts of interest.

Perhaps the lawyer meant that the alternative was the will package PLUS the trust, but that doesn't seem to be what she wrote. If I were you, I would get clarification or find a different estate attorney.

The attorney will likely charge by the hour, so if you have a lot of questions or a lot of changes along the way, the price can easily double, so try to do your homework ahead of time.

Make sure that you properly title all of your accounts and insurance policies, retirement accounts, etc.  Make sure to do it as soon as the trust documents are finalized.  All too often, accounts aren't ever re- titled to be in the trust, and all is for naught.  TOD accounts stay out of the trust.  Insurance goes to people, not the trust.  etc.  You lawyer should give you an instruction sheet and walk you through it.  IRA accounts may need special treatment if you have young children.

[Miss Bonnie MD]

Physiciancouple.com wrote:

I want to be able to clearly spell out who gets custody of the kids, and how the money will be doled out (it is already >5mm now including life insurance, and it will be a lot more in the years to come). For instance, X amount per year/child for private precollege schooling in addition to X amount for annual living expenses/child under age 18; X amount for college/living expenses to be paid by the trust; excess to be distributed evenly at age 35 to each child. If possible, even down to the detail of I want this money to be invested in such and such way until these various distributions are to take place.

Essentially the person who would be raising the children is not financially savvy whatsoever and I would like to make sure we have a clear separation financially and that our wishes are honored.

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We have this (X amount her child at X age etc with checkpoints in case kid becomes a heroin addict) in our will via a testamentary trust (trust created at death). I think the guardian and trustee of the money were different, or we had 2 trustees as a checkpoint too.