THE WILLS, POWERS of attorney and advance directives drawn up for my wife and me were drafted according to the laws of another state—and were badly out-of-date.
For example, these various documents included guardianships for our then-young children, with a trust to make gradual payouts until they turned age 35. Both our children have since graduated college, become professionally employed and demonstrated they’re financially responsible.
Despite all that, I’m embarrassed to admit that we procrastinated over getting new wills. We’re far from alone. The majority of Americans don’t even have a will. I’d bet a few HumbleDollar readers are likewise in procrastination mode.
What was getting in our way? First, there’s the cost and inconvenience of making new wills. Second is the reaffirmation of our mortality, which can be hard to take.
Third was the continuing uncertainty over estate taxes. The Biden administration proposed lowering the estate tax exemption and eliminating the step-up in cost basis on inherited assets, though neither idea found much favor with lawmakers. Fourth, we were reasonably certain that we would soon be moving to a new state—New Hampshire—with different estate and end-of-life rules.
Finally, both our children were in the midst of major life transitions. One child graduated college in May, while the other will get married this fall.
Despite all this uncertainty, we just signed new wills, powers of attorney and advance directives. They’re all legally binding in our new home state of New Hampshire. It took us seven months after our move to get them completed, as unpacking and installing closet hooks took precedence.
I feel relieved to have finally replaced our complicated old wills. Not only did we eliminate the costs of administering a no-longer-needed trust, but also we avoided the possibility our estate would be settled in our previous state, which has high estate taxes.
Our new wills are purposefully straightforward and without any special nuances. We trust our children. Each has laid claim to just a few trinkets of personal interest—but neither one is interested in our heavy, brown antique furniture.
We didn’t include a trust in our new wills. My family is generally anti-trust due to experiences with two previous estates that included them. With one trust, the lawyers seemed to be almost as much a beneficiary as the beneficiaries. A simple question over the telephone sometimes cost us a billable hour, or $250. The total legal costs to set up and close out this trust approached $40,000 across several years.
On top of that, not all the of the deceased’s assets had been transferred to the trust, so settling the estate became a mix of trust and probate procedures anyway. This reinforced my belief that a critical aspect of establishing a trust is to properly transfer in all assets, particularly deeded property, titled property, life insurance, annuities, business interests and personal property.
With the second trust, I estimate the trustee reaped almost one-third of the potential inheritance value—as much as $900,000—in management fees and opportunity costs over the 34 years this generation-skipping trust was in force. To make matters worse, changes to the tax code over the years eliminated much of the trust’s intended tax savings.
After these experiences, we’re much more afraid of lawyers’ fees, money management fees, operational complexities and tax-law changes than we are of the potential disclosure of our middle-class financial wealth through the public probate process.
The cost for our new documents was $600. We used a local New Hampshire law firm that seemed quite reasonable compared to the costs in our previous state. While do-it-yourself online options such as Nolo and LegalZoom are cheaper, we wanted to establish an attorney relationship in our new state for other business reasons.
The New Hampshire law firm also provided the added benefits of a notary, witnesses, fire-proof remote storage and the ability to make any future tweaks if required. The whole process took under two hours—one hour of remote work with emails and proofreading, followed by 25 minutes in the lawyer’s office for signing and copying.
The federal estate tax laws don’t seem likely to change anytime soon, except that today’s $12 million estate tax exclusion is scheduled to drop to $6.2 million per person at the end of 2025, unless Congress acts first.
We hope our new estate documents will suffice for many years to come. But our family structure, financial situation, residency, health and the tax laws could all change—and, if needed, so might our wills.
John Yeigh is an author, speaker, coach, youth sports advocate and businessman with more than 30 years of publishing experience in the sports, finance and scientific fields. His book “Win the Youth Sports Game” was published in 2021. John retired in 2017 from the oil industry, where he negotiated financial details for multi-billion-dollar international projects. Check out his earlier articles.