View Full Version : Wills, trusts and preparing for the worst -- how did you handle it?
Ok, I have a "Suze Orman would shoot me" confession to make that is really embarassing to me. We don't have a will, a trust or any other of those key documents. I tried to get my DH to start working with me on it a couple of years and it led to a huge reaction from him over the issue of guardianship for our kids. I KNOW we need to get these things in order, but it isn't something I could do on my own, you know? And I don't deal well with conflict, so I just tabled it. But I have been feeling worse and worse about it as time goes on, and now that we have a major asset in a foreign country (that has the deed in my Chinese name) it isn't like we can just expect our families to leap in and assume the responsibility for sorting everything out financially and taking care of our kids in the way we would want without everything clearly and legally documented.
So, I finally had what I thought was the ideal opportunity and brought up the topic again today. He still had a negative reaction -- basically he doesn't want to think about his own mortality -- but I think I opened a wedge of possibility where we can actually sit down and start to talk through the issues and come up with a basic plan. Then I will probably get stuck with the job of finding someone to help us get it all documented. But that is better than nothing.
WOndering, as I start this process, how others have dealt with it. was it hard? What were the touchiest bits? For us I think it is really the issue of guardianship for our kids and how to ensure that they remain connected to both sides of the family (mine in the US, his in China). I think once we work that out the rest should be more straightforward.
Just kind of hoping to learn from others' experience here. Appreciate hearing your stories/thoughts.
lhamo
Slap! Slap! Slap! That's me smacking you up side the head Ihamo (in a very loving and gentle way ;-)!). Yes you do REALLY need to do something since you have a very complicated multi-national situation. I personally would recomend a Revocable Living Trust - which includes a will as well as all the other documents you would need like medical and legal power of Attorneys. You can structure it however you want - who the kids go to, who has visitation rights and guardianship rights, how and when they inheiret, setting up a financial trust for them, transfer of all your property - including real estate -etc.. Not only does this kind of Living Trust allow you to avoid probate (and the often huge costs, hassle and public disclousers involved with probating an estate) but because it's revokable you can change things anytime you want. You can look online at something like Legal Zoom for a basic outline but I would pay the bucks to get it drawn up by an attorney. I had to go thru probate as the Executor when my Mom died. She had a tiny estate - a little one bedroom seniors co-op apt worth under $100K and about $40K in a saving account. It took almost a year to go thru probate - at which time all the money was tied up and we couldn't sell the apt but had to continue to pay the money association dues and prop taxes - and it cost close to $10K in legal fees not to mention that it was a HUGE hassle! My Dad on the other hand got a revocable living trust, had his real estate put into the trust (he was still the legal owner with full rights to sell at any time), as well as his bank accounts and vehicle (again he retained ownership of everything and everything functioned the same as with out the trust). When he passed away we (Sisd and I) as Trustees after his death, were able to withdraw that money from his bank accounts, put his property in our names - or sell them as the Trustees - and it never cost us a cent. It was all done as soon as we got the death certificate and as easy and hassle-free as possible. Way to go IMHO!
Also, if you pass away before the DH then he (and his side of the family after he passes) may not only inheriet everything but will have the right to ban your parents/family from involvement with their grandkids. Setting up a revocable trust allows you both to guareentee that your kids will still be able to live in the US or China and be with all the grandparents - or the people of both your choosing - and also protects your kids right to inheriet if DH remarries (new spouse would likely inheriet everything rather than your kids if he died). There are trusts for people in these situations to protect each parents family interests and the interests of the kids even if they are deceased.
"probate can take anywhere from 3–6 months to several years. In California, for example, the average estate takes 7–9 months to get through probate, if all goes well, but if there is something like a will contest or some other lawsuit, all bets are off. Some matters have taken decades to resolve."
"
The cost of probate may be set by state law or by practice and custom in your community, so it will differ from place to place. When all the costs are tallied, probate can easily cost from 3–7% of the total estate value, and more. The costs may include appraisal costs, personal representative fees, court costs, costs for a type of insurance policy known as a surety bond plus legal and accounting fees. Some of these costs are set by law and there’s nothing you can do about them, but you may be able to negotiate a lower fee for services like accounting, legal advice, real estate sales, and so on. California, for example, is one of a few states that set statutory attorney’s fees based on a percentage of the gross estate, even though the net estate (after paying mortgages, debts, and so on) may be considerably smaller and a fee based on a gross estate may be unfair. These fees are only the maximum fees that can be charged, however. Nothing would stop the personal representative (administrator, executor) of an estate in California from contracting with an attorney for services based on an hourly rate instead of the statutory fee."
I'm like you--and guess what--still no will, even though the kids are full grown at this point. I went to a lawyer years ago to get a will and an advanced directive. Like your husband, my husband does not like to even go near those topics. So, as a result, I have two old drafts of wills and advanced directives, unexecuted, sitting in my desk.
Just last week, I signed all of the drafts. I signed all of the advanced directives. Then I made a video of myself explaining why the will was not fully executed but if, in the event I am unable to make decisions or die before I get my act together, the draft will reflects my desires, and represents what I want my children to do in order to act on my behalf. I put it in an envelope and told my oldest son where it is.
I also really need to get my husband moving, though. This was just an emergency stop-gap measure.
Legal Zoom seems to make it really easy to create a will. If you have a lot of assets, though, or you have specific ideas that might not fit into a legal template, I'd go to a lawyer. But maybe if you can get your husband just to "look over your shoulder" as you navigate the Legal Zoom site, maybe you'll grease the wheels a little!
Good luck!
I'm like you--and guess what--still no will, even though the kids are full grown at this point. I went to a lawyer years ago to get a will and an advanced directive. Like your husband, my husband does not like to even go near those topics. So, as a result, I have two old drafts of wills and advanced directives, unexecuted, sitting in my desk.
Just last week, I signed all of the drafts that I could sign. I signed all of my advanced directives. Then I made a video of myself explaining why the will was not fully executed but if, in the event I am unable to make decisions or die before I get my act together, the draft will reflects my desires, and represents what I want my children to do in order to act on my behalf. I put it along with a flash drive with the video on it in an envelope and told my oldest son where it is.
I also really need to get my husband moving, though. This was just an emergency stop-gap measure.
Legal Zoom seems to make it really easy to create a will. If you have a lot of assets, though, or you have specific ideas that might not fit into a legal template, I'd go to a lawyer. But maybe if you can get your husband just to "look over your shoulder" as you navigate the Legal Zoom site, maybe you'll grease the wheels a little!
Good luck!
There are also alot of weird little legal terms that as will should have in them in order not to tie the estate up in court for years. Just stuff like allowing the Executor to "serve without bond" or with "the full ability to execute the will" as well as a bunch more. Leaving out those things can have adverse effects to an already pain in the butt probate. I use to think that just having a hand written will - even one that is witnessed - is good enough but I leanred the hard way it's best to get a professional one that is applicable to your state even if it's from Legal Zoom. You may also want to read my post above for info on why I think people need a revocable living trust rather than go thru probate if you only have a will and have property and assets over $20K - in Calif - you will have to go thru probate). There are some protections that probate offers that a trust doesn't. but for most people avoiding the cost and hassle of going thru probate makes it worth it.
And of course there are many ways to avoid probate even without a will or trust. One way is to assign benificaries to your assets in the event of your death. So if you want the kids to get your bank accounts, just list them as your beneficiaries with the bank. The same can be done for vehicles here in Calif (the DMV website has that info). And most 401K's, IRAs and pension benefits already list a beneficiary so those won't go thru probate either. However, in most states (there are exceptions) you can not leave your home or anyt real estate asset directly to a beneficiary and that will have to go thru probate. And since that's often the most valuable asset a person has - as well as the most costly to maintain while it's in probate - it can be costly to probate. Now you could add your beneficiary onto the property title but that has soooooo many potential pitfalls that I would never do it myself.
loosechickens
7-29-11, 2:58pm
What Spartana said, times 1000 percent........
Especially given the international aspect, and amount of assets, plus children and guardianships in the mix, I would definitely advise an estate and trust attorney over Legal Zoom, which is helpful in simple cases, but a minefield in complex situations like your own. In the various papers connected with the trust, every single thing can be spelled out......SO much better for all concerned.
Since we travel, while we were passing through Texas, we contacted an estate and trust attorney in Houston. We had our initial visit with him in person, but it could have been done over the phone, where he went over with us all the things we wanted covered and what our wishes were......we had moved on within a few days, so from then on, all was handled by email. They would email us copies of everything, we indicated the few places where we wanted changes, they made the changes, sent us all the paperwork, revocable living trust, wills, durable powers of attorney, medical directives, the whole ball of wax. Then we took the papers to the local offices of our brokerage, where there was a notary, who provides the service free of charge, we signed all the papers, had them notarized, one copy went back to the attorney, we kept ours, and made CDs with all the papers scanned onto them, and disbursed to our kids, a trusted friend, etc., so everyone knew where everything was, and all the ends were tied up neatly.
It cost about $1,400 in fees, can be changed at any time while you're alive, and avoids probate. We felt it was worth every penny.
My mother had the same thing, and when she died, it was SO incredibly easy, that I can't imagine how people can let their loved ones have to work through probate and all the problems and expenses of closing the estate, when it can be done so easily with a trust. As I was named as her trustee, when she died, I was able to access her bank account to pay her final bills, everything was transferred over to me (I'm an only child) as soon as I was able to present a death certificate.
I've had to help several friends through a probate process, and as Spartana said, it can be long and time consuming, cost a bunch of money (far more than the cost of paying an estate and trust attorney to draw up your directives), and a generally miserable experience.
Spartana/loosechickens,
Thanks very much for this advice. I'm going to get on it asap.
What Spartana said, times 1000 percent........
Especially given the international aspect, and amount of assets, plus children and guardianships in the mix, I would definitely advise an estate and trust attorney over Legal Zoom, which is helpful in simple cases, but a minefield in complex situations like your own. In the various papers connected with the trust, every single thing can be spelled out......SO much better for all concerned.
Since we travel, while we were passing through Texas, we contacted an estate and trust attorney in Houston. We had our initial visit with him in person, but it could have been done over the phone, where he went over with us all the things we wanted covered and what our wishes were......we had moved on within a few days, so from then on, all was handled by email. They would email us copies of everything, we indicated the few places where we wanted changes, they made the changes, sent us all the paperwork, revocable living trust, wills, durable powers of attorney, medical directives, the whole ball of wax. Then we took the papers to the local offices of our brokerage, where there was a notary, who provides the service free of charge, we signed all the papers, had them notarized, one copy went back to the attorney, we kept ours, and made CDs with all the papers scanned onto them, and disbursed to our kids, a trusted friend, etc., so everyone knew where everything was, and all the ends were tied up neatly.
It cost about $1,400 in fees, can be changed at any time while you're alive, and avoids probate. We felt it was worth every penny.
My mother had the same thing, and when she died, it was SO incredibly easy, that I can't imagine how people can let their loved ones have to work through probate and all the problems and expenses of closing the estate, when it can be done so easily with a trust. As I was named as her trustee, when she died, I was able to access her bank account to pay her final bills, everything was transferred over to me (I'm an only child) as soon as I was able to present a death certificate.
I've had to help several friends through a probate process, and as Spartana said, it can be long and time consuming, cost a bunch of money (far more than the cost of paying an estate and trust attorney to draw up your directives), and a generally miserable experience.
My Dad's Revocable Living Trust included all the things you listed - as well as drawing up and transferring his real estate deeds into the trust and having them recorded at the County Recorders office - for about $1200. A bargin IMHO. He used an attorney that just did trusts, wills, estates.
Thanks, guys. I know this is important AND urgent and something we need to have a professional assist us with -- I'm enough of a Chinese legal show junkie to know that the inheritence laws here are VERY different than in the US, but I have absolutely no idea if probate even exists here and how something like our apartment would be handled. I'm going to do my best to tackle the general framework/basic principals with DH during our upcoming vacation (not the most ideal situation, but we need to be able to sit down and work through this).
Still more than happy to hear from others. This is one of those touchy topics that I'm sure lots of people have had trouble broaching.
lhamo
I read this. Don't know if it helps. Sounds both easy and complicated:
"In the Law of Succession of China, inheritance is divided into two areas: inheritance according to a will, so called “testamentary succession”; and inheritance without a will, so called “statutory succession”. A partial testamentary succession occurs where a will only covers part of the inheritance. The portion of the estate of the decedent that is under a will is dealt with according to the will's instructions, and the portion that is not covered by the will is dealt with as a statutory succession. All successions, whether statutory succession, testamentary succession, or partially testamentary succession, are subject to a claim under the Marriage Law by the surviving spouse, where the net family property of the deceased spouse is greater than that of the surviving spouse. Simply put, if a person has a will, they may include or exclude anyone they wish, subject to the spouse's claim under the Marriage Law or to the claims of dependants for support from the estate.
In case of statutory succession, the estate of the decedent shall be inherited in the order, which spouse, children, parents are first in order; brothers and sisters are second; paternal grand parents, maternal grandparents are third. When succession opens, the successor (s) first in order shall inherit to the exclusion of the successor (s) second in order. The successor(s) second in order shall inherit in default of any successor first in order.
In addition, “legacy” in the Law of Succession of China denotes that the estate of the decedent is bequeathed to the country, or an organization or an individual who is not one of the statutory successors. Moreover, a person may enter into a “legacy-support agreement” with a person or an organization under collective ownership who in accordance with the agreement, assumes the duty to support the former in his or her lifetime and attends to his or her interment after death, in return for the right to legacy.
Inheritance obviously is another difficult and complicated area of China family law. You certainly need to seek legal consultant in term of constructing a will or a legacy-support agreement or resolving inheritance disputes. Our professional advices and job will ensure your last will shall be executed and the interests of your loved ones shall be protected by the law and our professional team. "
You might want to read this whole thing - especially article 13 which makes it sound like you would have to equally divide your inheireted assets between spouse, children and both sets of parents if say you or hubby died without a will. It also went on to say that, depending on who is supporting who in the family (you guys supporting his parents for example) they may be entitled to a larger share of any inheritence. But if you have a will, it will go to the people you list it to go to.
Well the web site wouldn't work but here's some more info:
"Marriage Law
In China, all succession of property and wealth is subject to marriage law. This means that the surviving spouse can make a claim on the estate of the deceased spouse if the net worth of the deceased spouse's estate is greater than the net estate of the surviving spouse. According to Chinese law, the surviving spouse can make a legitimate claim on the deceased spouse's property even if not listed in the will as a beneficiary.
Adjusted Inheritance
Chinese courts may adjust the amount of inheritance received by an heir based on the amount of care she offered the deceased during his lifetime. If an heir stands to benefit little from an inheritance because of already possessing substantial holdings, the court may decrease the heir's share and allot a greater amount to other beneficiaries. The aim of the Chinese government is to promote gender equity and reward care-givers."
Read more: Facts About Chinese Society's Inheritance | eHow.com http://www.ehow.com/info_8594740_chinese-societys-inheritance.html#ixzz1TXFakx2E
I don't understand why you have to have your husband's approval to have a will for yourself. Wills are for individuals, not couples. You need to have a will that covers the territory of items that come into play should you die before your husband or at the same time as your husband. Then, if he dies first, you will probably need to rewrite your will.
That said, when I married my husband he had two grown kids. He wrote his will in such a way that made me essentially caretaker of the house and its contents until I died, then it would all go to the kids. Give him credit, he left the money to me. Still, since we didn't have a prenup, it seemed odd that he would bypass me. After much discussion he realized that he didn't think things through and changed his will to give a few specific items to his kids (nothing I wanted anyway) and left the house and furniture and kitchenware and such things to me. Along with the money. (The kids had a trust left to them from their deceased mother anyway.)
Even so, we each have independent wills.
Well, we have joint assets and we are co-parents to our two children, so I wouldn't feel right doing something without his participation. And as the stuff that Lindy posted shows, not only attitudes but also the legal framework around inheritances is very different here in China. My Chinese is pretty good, but my husband is the native speaker so I would prefer to have him involved in anything we do that involves legal work in Chinese (though to be honest when we bought our apartment I was the one who read and understood the mortgage agreement, which was in Chinese -- DH pretty much was clueless and I had to tell HIM what certain key terms were).
lhamo
Yes, you have joint life situations. But wills are not joint ventures. It could be that you simply say to your DH that you very strongly feel that you both need a will and you're going to go ahead and get yours done. I could be that by your taking action it will prompt him to climb on board. And while, yes, it's always best to have you're husband's involvement, his decided lack of involvement should not cause you to follow in his irresponsible lack of footsteps.
What Jan H said> Ex-DH and I had seperate wills (and it was a HUGE problem getting him to do one). Same with my Dad and his second wife. In the USA it's very common - and often recomended - that married couple have seperate wills. Even in community property states like Calif where everything usually goes to the surviving spouse automaticly. So yeah, I'd do a seperate one on your own and continue to encourage DH to do the same. Especially after reading chinese inheritence laws I think it is ABSOLUTELY the ONLY way to go. Just the fact that the govmint can decide who and what each surviving spouse and other family members get (including some to the govmint) if one of you dies without a will is extremely scary. Put that fear into your hubby too! Let him know that if you died willless the govmint may decide he (or your children) doesn't need your share of the assets and they can go to your folks. That'll scare him :-)! Good luck! I know my DH was one of those very positive optimistic people who never thought anything bad would ever happen. It took me (the realist) a lot of doom and gloom scenarios to get him to finally do a will - and we didn't even have kids!
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