27 Dec Last Will and Testament – an Ominous Gasp of Relief
Last Will and Testament – an Ominous Gasp of Relief
Visualize the last movie you saw where a character takes a deep breath of relief having “fooled” someone or “gotten away” with something, and while smirking looking behind them as they are t-boned by a bus or train that you, the audience, saw coming. Game over.
That’s exactly what faulty estate planning or having an inadequate will can be like if not done right. You feel good because you’ve made some basic decisions about what happens upon your death. You’ve probably designated one or more personal representatives, guardians of children’s person and property, and beneficiaries. You may even have provided for a custodian of your digital assets (digital estate) if your attorney is really sharp. That’s good, but it may only be the FIRST step towards careful planning for your family and business’s future. Here’s a very simple example why.
Assume you’re married and you have children. If you own assets jointly with your spouse as joint tenants with rights of survivorship (JTWROS) or as tenants by the entirety (T/E or TBE), your spouse will be the sole owner upon your death automatically by operation of law. No probate is necessary unless you own assets in your name alone. Alternatively, suppose you own assets in your name alone, through the probate process, your spouse and children will, collectively, each inherit about half of your assets that remain after creditors and attorneys are paid.
In either of the above cases, aside from the depletion of your estate by court costs and attorneys’ fees, without proper planning, your beneficiaries will inherit their interests outright. This means that they will have full dominion and control over the property to do with it what they wish. You may want to consider their financial responsibility, their exposure to creditors and their likelihood of being exposed to creditors in the future. The only thing worse than them squandering the assets is their creditors swooping in and taking them away before they’ve even had a chance.
Another critical concern should be whether you want the assets to remain in the family or blood line. Make sure to remember that former spouses (divorce) are prime examples of creditors. Similarly, your assets can be usurped outside the blood line by your surviving spouse remarrying after you’re gone. If you have a will, these problems MAY be precluded if testamentary trusts are effectively crafted and drafted.
What’s important is that you realize that what you don’t know CAN hurt you, your family and your business’s futures. This is just one basic example. Hindsight is always 20/20, so please seek competent representation and avoid do it yourself (DIY) products at all costs.