Preparing a Last Will and Testament is, the vast majority of the time, what motivates people to call our office for an estate planning consultation. Clients know they need a Will so that their assets will be distributed according to their wishes once they die, and they are eager to get that document completed and behind them – ideally, in short order. However, spending some time at the beginning of the process to consider the details and logistics can pay off in spades for family members and beneficiaries.
1. Distributing your Things
Many people, in the context of estate planning, are so focused on distributing real estate and bank accounts that they forget to take the time to think through the distribution of the things that often matter more, both to the client and to the beneficiary: personal effects. Taking time to think about who to leave a watch, piece of jewelry, or nice piece of furniture to can give you peace of mind, and prevent disputes between beneficiaries after your death. As an example, when you simply direct that your personal property be distributed to your children, you leave it to your executor, and to your children, to decide who gets what. This creates an environment ripe for disagreements during an already emotional time. If you have items that you know you want to go to certain people, taking the time to put those details in your Will can do a great deal to ease tensions and preserve relationships after your death.
2. Beneficiaries with Unique and Special Needs
In most cases, the first objective of a Will is to provide for how your assets will be distributed after your death. Oftentimes, it’s as simple as concise language that specifies, quite literally, who gets what. But what about a child or grandchild with special needs, or a beneficiary who is receiving financial aid, or dealing with creditor issues? When you are preparing your Will, it is important to give some consideration to the impact an inheritance might have on your beneficiaries. In some cases, the receipt of a cash inheritance, or valuable personal property, can have consequences for the recipient that can be avoided by proper planning. Those consequences can include temporary termination of public benefits, loss of housing or food stamp benefits, problems with financial aid, loss of the inheritance to creditors, and unanticipated tax impacts. When you are considering distributions under your Will, you should also consider the person on the receiving end, and plan accordingly.
To be continued…Check back next week for Part Two, regarding tax implications, gifts to charities, designating a guardian, and choosing fiduciaries.