Emergency fund vs. will & living trust?

[msjd123]

I'm embarrassed to admit that, despite having owned our own home for 5 years and having had a child for the last 2, we don't yet have a will : It's been one of those things we keep meaning to do, but we've spent quite some time digging ourselves out of debt and taking care of more urgent needs, so here we are. That said, I now feel torn between putting money into the emergency fund we're building and saving up the $1,000 it would cost to have a lawyer draw up a living trust, power of attorney, and will. DH and I are both tenured teachers with total job security, but you know how it goes with savings -- as soon as you decided to spend money on something, suddenly there's a tru emergency and you feel like

So, which of these do you think we should tackle first?

[skueppers]

Personally, I would buy or borrow from the library the relevant Nolo Press books on doing your own will, etc.

Then I would do it myself and put the money saved in my emergency fund!

[mightymoo]

It shouldn't cost that much to have a lawyer draw up a will and power of attorney. Why do you feel you need a living trust? The trusts are generally constructed to avoid inheritance tax, they are only necessary if your net worth is over $2 million. It's complex, the idea is that each person gets $2M bypass on the inheritance tax, and by putting your money in a living trust, you "save" that bypass for your spouse if you die first, of course the trust has to be set up before you die, so it does make sense to set it up even if you aren't worth that much if there is a chance you'll eventually be worth that much. However, if you don't have an emergency fund, I wouldn't be worrying about living trusts at this point, you can set one up later if you need to.

I think you can get a basic will drawn up for a few hundred dollars.

[msjd123]

Admittedly, I don't know much about wills and trusts, but both of my parents suggested them, so I just went with that. One other complicating factor is that I am not a citizen, and my mom keeps telling me that estate taxes and inheritance laws are stricter for non-citizens. I haven't had the time to verify it, but I'm pretty sure she has, which is why I was just listening to her advice.

[mightymoo]

Originally Posted by msjd123

Admittedly, I don't know much about wills and trusts, but both of my parents suggested them, so I just went with that. One other complicating factor is that I am not a citizen, and my mom keeps telling me that estate taxes and inheritance laws are stricter for non-citizens. I haven't had the time to verify it, but I'm pretty sure she has, which is why I was just listening to her advice.

Oh, well that could make a difference, I don't really know much about it, just recently got enlightened on the whole living trust thing as it was.

[Fiestabeth]

Do you personally know any lawyers? Dh's uncle is one, and we did a great trade to have him draw up our will - I cleaned his (HUGE) house in exchange. You can also post on Craigslist under "Barter" or "Legal Services." Just make sure to research whatever lawyer you work with to make sure he/she is reputable.

That is, if you have a service that you can exchange. I just looked on Craigslist out of curiosity, and there are a few lawyers offering their services in trade. Might be worth a shot, then you can work on building up that emergency fund.

[Jadzia]

The point of a trust is to avoid probate. If your husband & you have both your names on all accounts, houses, etc. then that stuff wouldn't have to go through probate if one of you dies. However, a trust is important for providing for your children in the event both you & your DH die.

Probate is a huge pain. My dad was a joint account holder on all my grandmother's assets. Grandma passed away in 2001 but my dad neglected to add my mother's name to those assets after her passing. So then my dad just passed away in December, and all of the assets that were in Grandma's accounts need to go through probate. It takes over 5 months before my mom can even touch the money, plus they also take a small percentage and you have to pay court costs, lawyer fees, etc.. Thankfully the rest of my father's assets had my mom's name on them so she did not have to go through probate with the rest of his estate, but it was really unfortunate that my mom had to go through all this at all.

My mother is currently setting up a trust now, so that when she passes my sister and I will not have to go through probate in order to inherit her assets. Even when you have a will in place, you still need to have that will probated in order for your assets to pass to the people you want them to, unless they are a joint owner.

[kijip]

We did our own wills, directives, trust with Quicken WillMaker Pro- I think it was $75. I think you can do both the will and the savings/emergency fund.

[cristeen]

Honestly, I would deal with the will and trust first. The will you can do yourself for essentially nothing. But I don't recommend tackling a living trust yourself. There are some serious mistakes that can be made that can cause some serious problems down the road.

Around here we have a company called "We the People" who will do the whole kit and caboodle (living wills, trust, all the deeds, etc.) for about $500. Maybe look into whether there's a similar service in your area (they're a document service, not lawyers, that's why they're cheaper).

In addition to the Living Trust and the Will, I also recommend looking into having a Living Will done. After watching the Schiavo mess unfold in the national media, I highly recommend making your personal desires known in writing.