Estate planning - last will or living trust?

[cypher1]

I've been putting this off for the last couple of years, but I've finally been looking at estate planning options. I understand everyone's personal and financial situations are different and require specific tasks or needs. I'm almost 40, single with no dependents, and basically just want to make sure my assets (mainly cash, retirement, house) are divided among whomever without being stuck in probate court. I suppose health directive is a consideration to add.

A friend mentioned (also a divorce lawyer) Legalzoom.com for forms, which I'm simply reading up on. Has anyone used this or have another recommendation? Do you have a certain preference for will or living trust, etc.?

[myrdale]

While I am sure Legal Zoom is just fine, I'd rather have this taken care of by an actual lawyer. I know everything is done correct to the state I live in, signed, witnessed, notarized.

I took care of this a few years ago. Of the dozen or so lawyers in town, I picked one and made an appointment.

Go ahead and take care of more than just the will. The total cost was about $400 for:

Last Will & Testament (Who gets what when you die)
Advance Directive (What happens to you if you're incapacitated)
Limited Power of Attorney (What happens to your stuff if you're incapacitated)

Keep in mind, the will only covers your property. It does not cover your bank accounts or retirement accounts. You will need to fill out a beneficiary form for each of these accounts. I'd also print out a list of these accounts and keep it with your copy of the will.

I'd also go ahead and give a copy of this to the person your leaving everything to. At least to who ever you expect to be the executor of the will.

For some reason people like to keep all of this a secret. I'd also have a basic conversation with everyone included (and NOT included) so they know exactly what to expect: "John you're getting the house, Stacy the lake cabin is gonna be yours, Josh you ain't getting a dime!"

[kork13]

Basic versions of those documents (will, healthcare POA, advanced directive) that are pretty boilerplate are fine (even recommended) to get from cheap alternatives, and Legalzoom is definitely one of the better ones I've heard about. If your will is going to be somewhat complicated, you may want a lawyer to do it for you, just to ensure it stands up and covers all of the bases. I would not (personally) attempt to do a trust without a competent estate attorney... But it sort of sounds like you're aiming for a trust? From what I've heard, $1k in attorney fees now will save your heirs 10x-20x (or more) in time & costs later on in working through a poorly constructed trust (or any estate plan, really), so that would be my recommendation. Another option to consider might be a testamentary trust (vs. a living trust). It's formed BY the will upon your death. But I'm not super familiar, and you'd want to do some research to see if that would meet your needs.

[cypher1]

Thanks for the explanations myrdale and kork. I'm sure I'm over complicating these decisions, but looking for feedback on what else to consider. I'll definitely have to read up on testamentary trust as well.

One idea was with money I leave for nieces and nephews, was to create a trust or directive to put that money into an IRA type investment after I pass away automatically in each name. Instead of giving them a lump sum to simply spend on whatever. But that was just a thought.

[moneybags]

Thanks for the explanations myrdale and kork. I'm sure I'm over complicating these decisions, but looking for feedback on what else to consider. I'll definitely have to read up on testamentary trust as well.

One idea was with money I leave for nieces and nephews, was to create a trust or directive to put that money into an IRA type investment after I pass away automatically in each name. Instead of giving them a lump sum to simply spend on whatever. But that was just a thought.

You would not be able to create IRAs for the recipients. One option you could consider is to set a specific age or a few different ages at which they receive the money. A trust makes it easier for the heirs as it avoids probate.