Revokable living trust

[Shreddingbetty]

Has anyone done one of these themselves? My financial advisor says it should be pretty straight forward and easy overall but it looks like lawyers charge anywhere from 1200-2000 bucks to do this. It probably is worth paying someone for it but maybe not. It seems like most of it is really making decision on how to disperse the money and that’s not really anything a lawyer can decide for me. 

I have a lot of money in retirement accounts and a life insurance, no debt other than my mortgage (so I own a house). I am single mom of one kid who is 10. I have no family in this country. 

I have no idea what the best way to do this is. How should I dole out the money to her in case of my death? Nothing until after she goes to college, a certain amount of money each month after a certain age? There is no way I would want her to have access to all of it at once (at least not until she is well into adulthood and presumable a responsible adult. Her college more than likely will be taken care of by her paternal great grand parents trust so that shouldn’t really play into it. What have other people done? And I am assuming I pick my own person that will be in charge of the trust?  I sort of struggle with this one as I do have a couple of close friend one of which actually has a degree in finance (although if I understood correctly that’s isn’t really necessary as they just follow the rules of the trust). How does one pick a trustee? 

I’m gonna read up on it more whether or not I get a lawyer to help me since I don’t want to be clueless even if I hire a lawyer, but just wondering what otherS might have done or what if  any advice you might have as this is all sort of foreign to me. Looks like you can do this through legalzoom if you do it yourself. 

is it worth trying to do this on my own or is it better to just suck it up and hire a lawyer?
any advice or insight is appreciated.

[azalea]

Does your employer offer a legal plan for ~$250/year? We did all of that paperwork with a local lawyer via ARAG Legal Plan and it all included. Much less expensive than if we paid a lawyer directly.

[goldengirlz]

We’re in the process of doing this now and using the legal benefit offered from H’s work. Whether it’s worth it to use a lawyer might depend on your state and what the probate process looks like.

We picked the same person to be both DD’s guardian and trustee of the estate. (Our lawyer said it’s more complicated for people outside the U.S. so you should probably ask about that.) We’ve suggested giving her 1/3 the money when she turns 18, 1/3 at 22 and 1/3 at 26. I don’t want to make it too complicated, but we’ll see what the lawyer comes back with.

[minzy]

My mother died when my twin and I were teenagers. She left us money that was not to be touched before age 25 unless we could demonstrate the need for one of the following: educational expenses; startup costs for us to begin our own business; and/or purchase of a wedding dress. I think that was a smart way to do it. For many years after her death, I longed for some type of guidance from her, and in a way, this is how I got it. The first two signaled her belief in us, I think, and subtly encouraged us to pursue higher degrees (which we both did). The last one seems so random, but it was like she was letting us know she would still be a part of that day. It also gave us “permission” not to feel like we should try to wear her wedding dress (which we still had) and I appreciated that.

I used my portion to get part way through law school, so when we turned 25, mine was already gone and I was knee deep in loans. My sister was working and did a less expensive post grad program, so she still had a little left that day, IIRC. I do think she bought something material that wouldn’t have flown the day before with what she had left, but I couldn’t tell you now what that was. ETA, I think it might have been an old sports car. Also, she currently has her own (very) small business (which is legitimate and not some MLM crap).

[Cappy]

Do you have a will? I'd start there and you can build a trust for your daughter into that process. I'm sure this varies by area but our will and medical directive documents were $500 each ($1000 for my husband and I both).

As for rules on distributions I'd see if you can set it up so that the funds would be spread out at key ages 18/22/25/30+. But think about your opinions on what you'd want your daughter to have with that funding and when, knowing that human nature would be to spend all that is available at any given time.

[MrsE]

Ditto the employer legal plan. I enrolled in one for this year and we just met with an attorney last week to kick off the process. Everything is covered through my employer’s legal plan.

[aprilsails]

We set ours up with our wills. I think the most important decisions are identifying guardian(s), and a separate financial person if that is what you want. In our case my Sister would be the guardian, and for now my MIL and Mom would have joint control over disbursements.

Our lawyers had us set up the trust with three stages: childhood - age 18, based entirely on annual carrying costs to go to my Sister. 18 given access to annual stipend only for needs- submitted education related expenses, housing, food, that’s it. After age 26 it opens up a bit more, with double the stipend, and the trust disburses fully at 35. DH was adamant about setting up the trust in this manner since he had a best friend fritter away the better part of $500k at the age of 19 on nonsense, when given a large inheritance from his grandparents.

[awkwardpenguin]

You absolutely need a lawyer. Wills and trusts are not DIY sort of things, especially in a situation where you want to add additional structure.

Whether you need an actual revocable living trust or a will with a pour over trust depends a lot on laws in your state and whether avoiding probate is a goal. These are areas where you need legal advice.

[Shreddingbetty]

Nov 9, 2020 20:35:25 GMT -5 azalea said:

Does your employer offer a legal plan for ~$250/year? We did all of that paperwork with a local lawyer via ARAG Legal Plan and it all included. Much less expensive than if we paid a lawyer directly.

My guess is not? Have not heard of this option. I work for a hospital chain in my state. Is that for any legal services? I will have to ask, if it is offered that hide it well.

[Shreddingbetty]

Nov 9, 2020 21:39:30 GMT -5 goldengirlz said:

We’re in the process of doing this now and using the legal benefit offered from H’s work. Whether it’s worth it to use a lawyer might depend on your state and what the probate process looks like.

We picked the same person to be both DD’s guardian and trustee of the estate. (Our lawyer said it’s more complicated for people outside the U.S. so you should probably ask about that.) We’ve suggested giving her 1/3 the money when she turns 18, 1/3 at 22 and 1/3 at 26. I don’t want to make it too complicated, but we’ll see what the lawyer comes back with.

I have no idea what probate looks like because I really don’t know anything about it. She is the beneficiary of all my accounts so I am assuming that is enough to keep those out of probate? My house would probably be the main thing that would have to go through probate if I do nothing. And of course I want to avoid having her get way too much money all at once. Not planning on kicking that bucket anytime soon but you never know.

[Shreddingbetty]

Nov 9, 2020 22:36:37 GMT -5 minzy said:

My mother died when my twin and I were teenagers. She left us money that was not to be touched before age 25 unless we could demonstrate the need for one of the following: educational expenses; startup costs for us to begin our own business; and/or purchase of a wedding dress. I think that was a smart way to do it. For many years after her death, I longed for some type of guidance from her, and in a way, this is how I got it. The first two signaled her belief in us, I think, and subtly encouraged us to pursue higher degrees (which we both did). The last one seems so random, but it was like she was letting us know she would still be a part of that day. It also gave us “permission” not to feel like we should try to wear her wedding dress (which we still had) and I appreciated that.

I used my portion to get part way through law school, so when we turned 25, mine was already gone and I was knee deep in loans. My sister was working and did a less expensive post grad program, so she still had a little left that day, IIRC. I do think she bought something material that wouldn’t have flown the day before with what she had left, but I couldn’t tell you now what that was. ETA, I think it might have been an old sports car. Also, she currently has her own (very) small business (which is legitimate and not some MLM crap).

I kind of like the idea of not being able to touch it before 25 except for certain circumstances. Like I said I think her college won’t be a problem as their is a trust on her dads side for that plus she also has a 529 and a utma. With any luck she will go study in Europe so it will be a lot cheaper.

[Shreddingbetty]

Nov 10, 2020 10:15:20 GMT -5 MrsE said:

Ditto the employer legal plan. I enrolled in one for this year and we just met with an attorney last week to kick off the process. Everything is covered through my employer’s legal plan.

I have a feeling we do not have that available, that would be an awesome thing. I will check into but I doubt it. 

[Shreddingbetty]

Nov 10, 2020 8:18:23 GMT -5 Cappy said:

Do you have a will? I'd start there and you can build a trust for your daughter into that process. I'm sure this varies by area but our will and medical directive documents were $500 each ($1000 for my husband and I both).

As for rules on distributions I'd see if you can set it up so that the funds would be spread out at key ages 18/22/25/30+. But think about your opinions on what you'd want your daughter to have with that funding and when, knowing that human nature would be to spend all that is available at any given time.

I don’t have a will, this is a dumb question but what all goes into a will? Guardianship I’m not sure that is an huge issue as we are divorced, although with covid it is something to consider I suppose as we are both in healthcare. Problem is I have zero family here and honestly not sure what I would even do for that. I have a couple of close friends but not sure I would want them raising my kid and they probably wouldn’t want to either. Absolutely worst case would be have her go to my sister but she would be going back to Europe’s which probably isn’t ideal either. And for medical decision making I’m also at a loss, again no family and even though my ex is an MD I don’t necessarily want him making my medical decisions for me. Not that he’d kill me off but still. Being a foreigner sort of complicates things a lot for some of these decisions. 

and yes I am planning on doing a spread out of the funds, just trying to get a feel for what sort of things would be good.

[Shreddingbetty]

Nov 11, 2020 13:50:43 GMT -5 aprilsails said:

We set ours up with our wills. I think the most important decisions are identifying guardian(s), and a separate financial person if that is what you want. In our case my Sister would be the guardian, and for now my MIL and Mom would have joint control over disbursements.

Our lawyers had us set up the trust with three stages: childhood - age 18, based entirely on annual carrying costs to go to my Sister. 18 given access to annual stipend only for needs- submitted education related expenses, housing, food, that’s it. After age 26 it opens up a bit more, with double the stipend, and the trust disburses fully at 35. DH was adamant about setting up the trust in this manner since he had a best friend fritter away the better part of $500k at the age of 19 on nonsense, when given a large inheritance from his grandparents.

Yes I would need a trustee. And guardianship, well see my previous answer. I have no family here so need a trustee so that money can’t be used for anything other than what I say it can be used for.

yes my kid could potentially come into a ton of money between her dad and I so I don’t want her to spend it irresponsibly for sure. 

[Shreddingbetty]

Nov 11, 2020 15:13:01 GMT -5 awkwardpenguin said:

You absolutely need a lawyer. Wills and trusts are not DIY sort of things, especially in a situation where you want to add additional structure.

Whether you need an actual revocable living trust or a will with a pour over trust depends a lot on laws in your state and whether avoiding probate is a goal. These are areas where you need legal advice.

Ok thank you. I was leaning towards that just because I don’t know enough about it and there is a lot of money at stake. I will have to do some research and then just suck it up and spend the money so that it will just get done right. In the end that’s more important than saving a few bucks And find out later there are issues. 

I hate adulting 😂

[goldengirlz]

Nov 12, 2020 19:57:50 GMT -5 Shreddingbetty said:

Nov 9, 2020 21:39:30 GMT -5 goldengirlz said:

We’re in the process of doing this now and using the legal benefit offered from H’s work. Whether it’s worth it to use a lawyer might depend on your state and what the probate process looks like.

We picked the same person to be both DD’s guardian and trustee of the estate. (Our lawyer said it’s more complicated for people outside the U.S. so you should probably ask about that.) We’ve suggested giving her 1/3 the money when she turns 18, 1/3 at 22 and 1/3 at 26. I don’t want to make it too complicated, but we’ll see what the lawyer comes back with.

I have no idea what probate looks like because I really don’t know anything about it. She is the beneficiary of all my accounts so I am assuming that is enough to keep those out of probate? My house would probably be the main thing that would have to go through probate if I do nothing. And of course I want to avoid having her get way too much money all at once. Not planning on kicking that bucket anytime soon but you never know.

This will vary by state, but in California, I believe it’s the size of the estate that dictates the probate process — and the threshold for triggering it is fairly low (something like $150k, which is easy to exceed if you own a house here and have life insurance.) Also, things could get complicated if she’s a minor even if she’s the sole beneficiary.

At any rate, I think a legal consult is worth the money.

[winecat]

Nov 12, 2020 19:57:50 GMT -5 Shreddingbetty said:

Nov 9, 2020 21:39:30 GMT -5 goldengirlz said:

We’re in the process of doing this now and using the legal benefit offered from H’s work. Whether it’s worth it to use a lawyer might depend on your state and what the probate process looks like.

We picked the same person to be both DD’s guardian and trustee of the estate. (Our lawyer said it’s more complicated for people outside the U.S. so you should probably ask about that.) We’ve suggested giving her 1/3 the money when she turns 18, 1/3 at 22 and 1/3 at 26. I don’t want to make it too complicated, but we’ll see what the lawyer comes back with.

I have no idea what probate looks like because I really don’t know anything about it. She is the beneficiary of all my accounts so I am assuming that is enough to keep those out of probate? My house would probably be the main thing that would have to go through probate if I do nothing. And of course I want to avoid having her get way too much money all at once. Not planning on kicking that bucket anytime soon but you never know.

CO has a "transfer on death deed" for real estate.  It's a simple form that needs to be notarized and then recorded with your county.  You can also set up a secondary beneficiary on the form.  I don't know if a person has to be named on the transfer on death deed or if your trust could be put on the form as the new owner if you were to die.  It's fairly easy to avoid probate in CO if you have your assets properly titled, with designated beneficiaries, etc..  www.nolo.com/legal-encyclopedia/colorado-avoiding-probate-32107.html

[Cappy]

Nov 12, 2020 20:10:48 GMT -5 Shreddingbetty said:

Nov 10, 2020 8:18:23 GMT -5 Cappy said:

Do you have a will? I'd start there and you can build a trust for your daughter into that process. I'm sure this varies by area but our will and medical directive documents were $500 each ($1000 for my husband and I both).

As for rules on distributions I'd see if you can set it up so that the funds would be spread out at key ages 18/22/25/30+. But think about your opinions on what you'd want your daughter to have with that funding and when, knowing that human nature would be to spend all that is available at any given time.

I don’t have a will, this is a dumb question but what all goes into a will? Guardianship I’m not sure that is an huge issue as we are divorced, although with covid it is something to consider I suppose as we are both in healthcare. Problem is I have zero family here and honestly not sure what I would even do for that. I have a couple of close friends but not sure I would want them raising my kid and they probably wouldn’t want to either. Absolutely worst case would be have her go to my sister but she would be going back to Europe’s which probably isn’t ideal either. And for medical decision making I’m also at a loss, again no family and even though my ex is an MD I don’t necessarily want him making my medical decisions for me. Not that he’d kill me off but still. Being a foreigner sort of complicates things a lot for some of these decisions. 

and yes I am planning on doing a spread out of the funds, just trying to get a feel for what sort of things would be good.

Our will designates guardians and sets up a trust for our assets and a person to manage those assets for our kids if we both die. If you and your ex were to pass while your daughter is under 18 you absolutely want/need to put a guardian recommendation otherwise she could end up in the foster system. You really want to leave some leads as to your wishes. We also have medical paperwork to say if we want to be on life support, who gets to "pull the plug", etc. 

In your situation where you have no one here to speak on your behalf I'd think its absolutely critical you get this done ASAP. You don't want her to be in a situation where she's a minor and you leave a big mess. Look for an elder law attorney in your area they can likely quote you a flat rate upfront. 

[brooke77]

Nov 9, 2020 20:35:25 GMT -5 azalea said:

Does your employer offer a legal plan for ~$250/year? We did all of that paperwork with a local lawyer via ARAG Legal Plan and it all included. Much less expensive than if we paid a lawyer directly.

Were you happy with ARAG insurance? It’s an option through my employer this year and it’s open enrollment. I googled and it seems like there are bad reviews (people incurring a lot of legal fees and can’t get reimbursed). I would only enroll to get my estate planning done, but the bad reviews gave me pause.

[azalea]

Nov 13, 2020 10:27:34 GMT -5 brooke77 said:

Nov 9, 2020 20:35:25 GMT -5 azalea said:

Does your employer offer a legal plan for ~$250/year? We did all of that paperwork with a local lawyer via ARAG Legal Plan and it all included. Much less expensive than if we paid a lawyer directly.

Were you happy with ARAG insurance? It’s an option through my employer this year and it’s open enrollment. I googled and it seems like there are bad reviews (people incurring a lot of legal fees and can’t get reimbursed). I would only enroll to get my estate planning done, but the bad reviews gave me pause.

We had no issues with ARAG. I utilized their website to find an in-network lawyer and the services were pre-approved by ARAG prior to actually seeing the lawyer. The legal practice we used was upfront that some fees are not part of the covered services (filing fee to update house deed to the trust, detailed instructions on how to fund the newly created trust), but all of the other services were fully covered as expected.