Category: Estate Planning

If you’re the average person living your life, and you’re one of the slightly less than 50% of the adult population who decides to actually write a will, for real, this time, then there’s a good chance you will make one of the following mistakes.  So to help you do the best job you can do with this important task (how important?  Just ask someone who had a parent or spouse die without a will) we’ve compiled the most common mistakes people make when writing their wills.

1. Not finishing.  You’d be surprised how many people try to DIY their will but never actually finish signing them.  You have to sign in a very specific way, which varies depending on which state you live in but always involves some combination of you, witnesses, and a notary public.  Usually all these people have to be present at the same time and sign together, which makes it easy to put off and a lot of people never get around to it.  A will without the proper signatures is not a will. 
2. Not updating.  A will should be reviewed and updated as your life changes.  Sometimes the problem is that what you own has changed significantly and the way you distributed it no longer makes the best sense.  More often, people you named as executor or other fiduciaries have died, become unreliable, or moved far away and can no longer serve. 
3. Thinking that a will is all you need.  Not all of your property is disposed of by your will – if you have life insurance, or retirement accounts, and sometimes even your investment or ordinary bank accounts, have beneficiary designations.  This means that when you open the account, you are asked who you want to get the account at your death.  Anything you own that has a beneficiary designation will not be affected by your will.  This means you have to think about everything together and review (and change if needed) the beneficiary designations you have made at the same time you are preparing your will.  If you intend to give everything to your friend Bob, but you forgot that you named your friend Fred on your retirement account, then your intent will not be carried out. Also, there are other useful documents you may need to prepare in addition to a will, even though we tend to think about “writing a will” rather than “writing a HIPAA release,” there are a number of documents that typically are prepared when someone sits down to “do their will.”  These include a power of attorney, a medical power of attorney, a HIPAA release (that lets the people you name have access to otherwise private medical information), and a few others.  These documents will be needed in the event you become incapacitated, either temporarily or permanently.  If you are in a serious accident and spend months in a hospital or rehabilitation center, you will need other people to help handle your finances, your insurance claims, and other similar things, which they will not be able to do easily unless you have prepared these additional documents.
4. Not letting people know about your will.  Once you have a will, and, hopefully, your other documents (see #3), you need to make sure people know they exist and where to find them when needed. 
5. Thinking you can do it all yourself.  I know, this one sounds very self-important, but a lawyer really is useful when you want to write a will. If you want to make sure you do what you intend to do, hiring a lawyer is definitely the way to go.

Parker Counsel Legal Services consults with special needs families in Austin Texas, Western Mass, the New Hampshire Seacoast, and Northern New Jersey. Special needs trusts, guardianship, and more. Give us a call and tell us about your family situation for some guidance on how best to plan a safe, secure future for your child. 833-RED-BOOT (833-733-2668)

Review your retirement, investment, and trust accounts

We help families in Texas, Massachusetts, New Jersey, and New Hampshire plan for the future of their child with special needs, and part of that planning means knowing what you have. We recommend you periodically review all your accounts and assets to

1. Make sure you remember what you have (as nice as it is to “find” money in the state unclaimed property lists, it’s better not to lose it in the first place)
2. check the amount you have in it
3. review whether you have a beneficiary named on the account and whether it is the correct beneficiary for your plan
4. make sure that your property and any beneficiary designations still match your overall plan

Make a list of your current assets, their amounts, and the beneficiaries. If you need to make any changes, make an appointment with your financial planner or attorney to go over your situation.

Review your will, power of attorney, medical documents, and trust documents

After you take a look at what you own, take a look at the documents you have to take care of that property, both before and after your death.

1. Are your fiduciary agents still the right people?
2. Have there been any weddings, births, divorces or deaths that require changes to your plan?
3. Have you moved to another state or had a significant change in your assets?

If you need to make changes or have questions about any of the changes in your life, make an appointment to see your attorney to make sure your plan is up to date and still does what you want it to do.

Parker Counsel Legal Services serves families in Central Texas, Western Massachusetts, Northern New Jersey, and the New Hampshire Seacoast with special needs estate planning, special needs trusts, and guardianships. Contact us for a consultation at 833-RED-BOOT (833-733-2668) or legal@parkercounsel.com

An often overlooked benefit of writing a will and putting together a well thought out estate plan is that you can pass on your values to your children, even if you’re not still physically present.  The most direct way to do this is with what lawyers call the “contingent minors’ trust.”

Even a little can be a lot

If you were to die when your children are still under the age of 18, the law won’t let them have their inheritance directly, but will require it to be managed and directed by an adult until the child is 18.  Unless you say otherwise, as soon as your child blows out those candles on their 18th birthday, they will be handed the whole caboodle to do with as they please.  Even if you don’t think you have very much to leave to anyone, its likely you at least have a house with a small amount of equity, maybe a small employer provided life insurance policy, and maybe a car or two to sell.  Even a very modest estate can wind up leaving $20,000 or so to your kids, and if you don’t think an 18 year old should be left unsupervised with $20,000, then you need to set up a minor’s trust.

What is a trust?

A trust is a way of owning property that gives the right to use the money to one person and the right to manage the money to another. In the case of a contingent minor’s trust, your will would say that if your children are under the age of 18 when you die, you want their share of the inheritance to be put into a trust for their benefit, to be managed by a person that you choose.

And then things get interesting.  By creating a trust, you can direct how and when the money is used.  This is how you are able to pass on more than just things, but also your values and priorities to your children.  With the inheritance in a trust account, the age at which the child is given the money can be delayed to any age you choose, and the trustee can be directed to use the money according to your priorities.

EXAMPLE ONE

Parent writes their will when the children are very young and parent has no idea what the child will be interested in as an adult nor does the parent have any idea how responsible the child is likely to be.  The trust is written to maximize protection and also cover a broad array of possible expenses.  As an example, the trust says that the trustee can spend money to pay for higher education expenses, vocational training, or a down payment on a home.  The trustee will remain in control until the child reaches age 25, at which time 1/2 the remaining money will be distributed to the child, and the remaining amount at the age of 30.

EXAMPLE TWO

Parent revises will when the children are in their late teens.  Parent has been very successful in business and has an estate of about two million, meaning the children will receive a fairly large inheritance.  Parent is concerned that children learn how to support themselves and manage money, so the trust is written to promote those goals.  As an example, the trust says that the trustee may pay for higher education expenses as long as progress is being made toward a degree, or may pay for startup costs of a business with a well designed business plan.  The trust may not pay ordinary living expenses more than one year after graduation.  The child may become co-trustee at the age of 26 in order to learn money management skills with the guidance of the older trustee.

Your values in action

Both of these examples show the parent basically offering support to their child in the same way that they would if they were alive.  If the amount of the trust is large, it can continue to age 30, 35, or older.  Or if you believe in learning by doing, you can distribute parts of the trust directly to the child to learn or fail on their own. The trustee can be given the discretion to use the money for education and living expenses only, or to pay for travel and sightseeing or other life experiences besides formal education.  In other words, your own priorities as a parent can be built into the trust.

To learn more about using trusts in your estate plan, send us a note or give us a call.  We’re always happy to do short consults to help you decide if its time to bite the bullet and do your estate plan.

Parker Counsel special needs law firm is available by phone: 833-RED-BOOT (833-733-2668), by email: legal@parkercounsel.com, or schedule a short informational phone call with calendly.