WHAT NOT TO DO IN YOUR ESTATE PLAN
We frequently discuss good estate planning practices in this column, but here are some things that you absolutely should not do when drafting your will or trust:
Settle Scores
With a limited exception for spouses, no one has the legal right to inherit from you. You can exclude anyone you choose from your estate plan. However, what you should not do is call these excluded parties out on their sins, and go into detail about the ways that they wronged you. This can be tempting to do, but wills are not the right place to air dirty laundry. Remember, when probated, they become public record in the county Surrogate’s Court. Furthermore, going into detail about your alleged grievances can give the individual in question ammunition if they are going to contest your will. It’s best to acknowledge people by name and state their exclusion from the estate plan without the dramatic explanations.
Divvy up dollar amounts instead of percentages
It’s fine to leave some bequests of specific dollar amounts to family members or charities. But your estate plan should still have a residuary clause that divides up your assets by percentage. Too often, people want their beneficiary section to consist exclusively of specific dollar amounts to various parties. But if you pass away years after making your estate plan, your net worth could easily have changed. If there’s not enough money to cover all of the bequests, they will have to be abated and reduced. It’s best to think about your desired bequests as slices of the total amount of money you have right now and convert the dollar amounts to percentages, so your intentions will hold true in the future.
Put one child in charge of the other child’s inheritance
There are many good reasons to make a trust for your child’s inheritance. You can protect it from creditors, lawsuits, or divorces. In many cases, you may want to protect the inheritance from the bad habits and loose spending of the child him/herself. In this case, you will need to carefully select a trustee who will manage the inheritance and keep it safe. Usually, this should not be one of your other children. Placing one child in charge of the other child’s inheritance can create unnecessary family tension years after you’re gone. The child who’s the trustee can face immense pressure from his/her sibling to make discretionary distributions that may not be wise. A neutral trustee can go about this with a much clearer head.
Surprise People with Pets
You can create pet trusts in your estate plan to leave resources for the care of and benefit of your dog or cat. But pets are a huge responsibility. You should not leave someone an animal to teach them a lesson or make their other inheritance contingent on their care of the animal. This could really backfire and create a situation that is not in the pet’s best interest. You should speak with your family and friends in advance and find a good home for your pet.
Commit Waste
Sometimes people with a flair for the dramatic want to do intense and unusual things with their estate plans. There are stories and even legal cases about people writing into their wills that their house must be exploded or razed to the ground when they die. Unless there is some functional purpose for this, it’s generally not advisable to include something along these lines. Your estate representative very well may not follow your wishes, and the plan could even be challenged in court as “waste.”
Violate the Rights of Your Beneficiaries
Some people view their wills as an opportunity to “rule from the grave” or teach their heirs a lesson. There’s an extent to which this is OK. If you want to leave your money to a charity to spite heirs who have disrespected you, that’s your prerogative. If you want to leave your money to heirs on condition that they graduate college or stay off drugs, there are ways to make that work. But if you do not like your son-in-law and condition your daughter’s bequest on the premise that she get divorced from him, this can quickly get dicey. Restraints on marriage are widely considered to be against public policy, and this would be ripe for a contest in court. Any conditions that violate the civil rights or other fundamental liberties of the beneficiaries should be avoided.
This article appeared in the December 17, 2021 edition of the Senior Gazette.
This is not intended to be legal advice. You should contact an attorney for advice regarding your specific situation.
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Michael Wagner is senior counsel concentrating on elder law and estate planning, wills and trusts. He conducts several Estate Planning Seminars and Webinars throughout the year.
He can be reached by phone at 845-764-9656 and by email.
