Considering one for my heir to augment the Will but am still plowing through all the plusses and minuses.

Thoughts?

Here's what I know: a will may have to go through probate.

If the intent is to give them the house upon your death, then I think it would be less expensive to put them as a joint owner on the title now. Then it would be automatic when you die. I don't know about the tax implications of either method.

Add the person with a TOD. Do not add them as a joint owner to your house or they will not be able to take advantage of the step up in cost basis on your house.

quote:

Originally posted by BlackTalonJHP:
Add the person with a TOD. Do not add them as a joint owner to your house or they will not be able to take advantage of the step up in cost basis on your house.

Was just going to say this. VERY important to get the stepped up basis.

quote:

Originally posted by BlackTalonJHP:
Add the person with a TOD. Do not add them as a joint owner to your house or they will not be able to take advantage of the step up in cost basis on your house.

The heir is already in the Will marked to receive the house. What I'm trying to do is to provide a potential stepped up process for him if possible.
That said currently he plans to live in the house.

SF is a great place to get info. We have the absolute best people here to help.
Having said that. As suggested in your other thread you need to find a good estate attorney and go through the process to get things as they should be. Might cost you a couple grand. But mostly likely worth it to you and your family.

Oh I plan to talk to my attorney more but posting here helps me with potential questions to ask.

I would suggest doing the TOD/POD with your accounts/assets. From my personal experience, it will make things easier for your son.

Put your house in a Trust wit this person as the beneficiary. Trusts will avoid going thru Probate.

Same thing with assets outside of the traditional IRA and 401k's.

We are starting this process as well.

If you make him a joint with right of survivorship (where I live, in GA) you don't involve the will at all for that and may have the stepped up basis to reduce or eliminate taxed when he sells or you pass. Similar on any vehicles and maybe bank accounts.
This is very much a state specific question and there's way too much at stake to not have the attorney do this.

Don't listen to the people pushing trusts in all but some specialized cases and specific states. They can easily add expense and complication in many cases.

quote:

Originally posted by 220-9er:
Don't listen to the people pushing trusts in all but some specialized cases and specific states. They can easily add expense and complication in many cases.

I'm one of those big proponents of trusts. As with all things, it depends on circumstances.

If there isn't much net worth, it isn't worth the expense of creating the trust. If nobody will be dependent on the estate and a years long delay in probate won't impact the heirs, a trust may not be worth the expense.

Trusts do a few things that a will does not. There may be other vehicles like the transfer on death to accomplish specific goals.

A trust ensures the assets are available instantly and without government intrusion for the benefit of the intended heirs. Trusts cannot be changed after the fact except by the trustee, so the trust prevents an ex-spouse or second spouse from redirecting assets away from the deceased's children or other intended heir. Trusts persist into the future and can thus protect assets in future generations, such as for grandchildren. If there are special needs children or grandchildren, a trust can provide for care while shielding assets from government confiscation.

Blended families are a big reason for trusts. Future unknowns, such as an heir becomes addicted or chooses unemployment, can be accounted for.

quote:

Originally posted by Fly-Sig:

quote:

Originally posted by 220-9er:
Don't listen to the people pushing trusts in all but some specialized cases and specific states. They can easily add expense and complication in many cases.

I'm one of those big proponents of trusts. As with all things, it depends on circumstances.

If there isn't much net worth, it isn't worth the expense of creating the trust. If nobody will be dependent on the estate and a years long delay in probate won't impact the heirs, a trust may not be worth the expense.

Trusts do a few things that a will does not. There may be other vehicles like the transfer on death to accomplish specific goals.

A trust ensures the assets are available instantly and without government intrusion for the benefit of the intended heirs. Trusts cannot be changed after the fact except by the trustee, so the trust prevents an ex-spouse or second spouse from redirecting assets away from the deceased's children or other intended heir. Trusts persist into the future and can thus protect assets in future generations, such as for grandchildren. If there are special needs children or grandchildren, a trust can provide for care while shielding assets from government confiscation.

Blended families are a big reason for trusts. Future unknowns, such as an heir becomes addicted or chooses unemployment, can be accounted for.

Once again, the law regarding probate is specific to each state. So while trusts may be advantageous where you live, it's not where I live, without special circumstances.
Here (and many other places, I suspect) jointly titled correctly, your home, vehicles, bank account, investment and retirement funds pass to the person(s) named upon death. No probate at all.
Many may get a step up in value, like a home, so your "cost" for tax purposes can be the appreciated value, not the older purchase price. That can be a tremendous advantage.

When both of my parents died, there was zero probate involved either time. My mothers went to my father and years later my father to me and a brother.
With two beneficiaries, involved we each got equal ownership that could be cashed out as soon as we received the death certificate, had we wanted.
I still had a local attorney and accountant I know and trust look over and file some of the forms & final tax returns to be sure there were no loose ends, but none involved selling the assets. Zero.

quote:

Originally posted by 220-9er:

Once again, the law regarding probate is specific to each state. So while trusts may be advantageous where you live, it's not where I live, without special circumstances.

Let me expand on that to say that anywhere in the USA, a properly drafted Trust is superior to a Will in assuring the desires of the deceased are carried out accurately and swiftly. Now in some places it may be true that property can be transferred outside of probate, and some things like life insurance and retirement accounts can pass directly to beneficiaries outside of probate.

Probate may or may not go quickly. I will reiterate that my father's estate was delayed by the NY court for going on 3 years now for no plausible reason at all. Simple will, nobody contests it, and a small total net value. The expenses of the delay are going to drain the estate of just about everything.

My concern is the use of a Will. In some circumstances the Will may be sufficient or a Trust too costly to make sense. In many cases the Will has inherent problems.

So if someone is discounting the use of a Trust rather than a Will, they could be making a multi-million dollar mistake where their heirs get nothing. Or a mistake that costs years before heirs see anything.

I am not familiar with how joint ownership might affect transfer of assets or impact taxes, but I will say that if the values are substantial then one should still consult with a good local attorney.

quote:

Originally posted by bald1:

quote:

Originally posted by BlackTalonJHP:
Add the person with a TOD. Do not add them as a joint owner to your house or they will not be able to take advantage of the step up in cost basis on your house.

The heir is already in the Will marked to receive the house. What I'm trying to do is to provide a potential stepped up process for him if possible.
That said currently he plans to live in the house.

If you have other assets to transfer by will, I am not sure what the transfer deed will actually accomplish. I won't make probating the will go away. And in Texas, at least, probate isn't that hard - i don't know why so many people are so fearful of probate. But ask your SD lawyer and a tax guy - they are the ones who can really help.

Here we would use an enhanced life estate/ladybird deed but that may not be something recognized in your state. It’s not like a typical life estate.

quote:

Originally posted by bald1:
Oh I plan to talk to my attorney more but posting here helps me with potential questions to ask.

I am guessing your state does a transfer on death deed? I am only asking because I guess some might not. I live in Texas and they are accepted here. My mom re-did her will a few years ago and to augment the will, the attorney did a transfer on death deed for her house to go to me. He is a respected attorney in this area of practice and highly suggested it. I am happy to share a redacted copy of it with you so you can see how it is worded, at least here in Texas.

The attorney explained it as being the same as making a person the beneficiary to a bank account. If you only put the person in a will to receive that money, then they have to wait for it to go through probate before they get it. If you put them in the will and also make them a beneficiary to the account, or even only the beneficiary, then they will receive the money with no probate. Listing someone on a transfer of death deed or beneficiary is better than a will, but doing both is even better.

Mike
That's what my attorney has intimated by email. We're getting together after my cataracts surgery.

quote:

Originally posted by bald1:
Mike
That's what my attorney has intimated by email. We're getting together after my cataracts surgery.

I hope your surgery goes well. My mom just did that too!