Certain individuals – especially grandparents – may have been through the estate planning process before. “Will – yep; Health Care Proxy – got it!; Power of Attorney – check and mate!!” Even though you may have your documents and plan in place, mistakes can still be made.
Let’s take a look at our top 3 mistakes that grandparents make in regard to their Wills:
1. Updating Their Wills. “Updating?! Wait, what?! I thought that everyone should periodically update their estate plan based upon their current life situation.” While this norm is generally true, many individuals insist on updating documents that do not require any updating simply because the date of the document is over 10 years old. Let’s look at an example:
Will Provision I – Dated September 1977 – “All of the rest, residue and remainder of my estate shall be distributed to my husband, BILL SMITH, if he shall survive me. In the event that my husband, BILL SMITH, has predeceased me, then to my children, in equal share, per stirpes.”
Will Provision II – Dated September 2016 – “All of the rest, residue and remainder of my estate shall be distributed to my husband, BILL SMITH, if he shall survive me. In the event that my husband, BILL SMITH, has predeceased me, then to my children: CARL SMITH, NORBERT SMITH and DANA JONES, in equal shares, per stirpes.
These Will provisions are exactly the same. There seems to be a false notion that “I must name my children, by name, in my Last Will and Testament.” The first provision does not name any children directly, however, the beneficiaries of said estate would be the three children, in equal shares, regardless of whether or not names are included. If your family has stayed generally the same over the years, it is simply not worth the cost of preparing a new Will just to add the names of family members.
In most cases, older Wills are still rather relevant and do not need to be updated as frequently as folks tend to believe. It is always a good idea to review your Will with an estate planning attorney in order to be certain, but updates are not often frequently needed unless new provisions will be added regarding entirely new individuals or distribution options such as trusts or guardianships.
2. Creating Trusts for Minors. Many grandparents wish to leave money behind for their cherished grandchildren. What they aren’t aware of, however, is that those grandchildren may be in receipt of this money outright at 21 years of age. Imagine handing a $10,000.00 specific bequest to yourself at the age of 21 – what would you have done with it? Exactly. The way to combat this issue is to dictate that anyone who inherits money below a certain age limit (set by you) will have their share held in trust for them until they turn a certain age. The trustee of said trustee (who you hand pick yourself) will be responsible for managing that money and paying it out to the grandchild at the trustee’s sole and absolute discretion. The trustee can use said monies to pay for medical assistance, schooling, etc. and the grandchild will be prohibited from using the funds as “fun money.” Furthermore, provisions may be set as to when the grandchild can take over sole control of said monies. For instance: half may be distributed to the grandchild when they reach the age of 25 and the remainder may be distributed to them when they reach the age of 30. Trusts for minors can be included in one’s Last Will and Testament for a nominal price and they are extremely helpful in ensuring that your legacy does not go to waste.
3. Not Having One. The most obvious mistake. You’ve worked your entire life in order to gain your financial legacy, please always ensure that all documents are in place that will properly distribute those assets to your loved ones. Although probate and non-probate planning can certainly circumvent the need for a Last Will and Testament, one should always have a Will in place in case any assets “slip through the cracks.”
If you or a family member are interested in meeting with an estate planning attorney, please feel free to contact our office at 235-5885 in order to schedule your initial, free consultation. We strive to provide convenient and affordable estate planning, no matter your age. You should be busy enjoying life, not wondering about the ‘what ifs.’
Related Topics: Estate Planning, Retirement Planning
