Estate planning is you deciding about your life and your family; what you want, not what a judge decides for you.
The “Last Will and Testament” (from now on we will just say “Will”) is the key document to do that. This is where you pin down what you want in clear and enforceable language. It may not control everything; but, it remains the linchpin to making sure what you want to happen is what happens. Estate planning calls for other documents too and I will talk about them in other posts. But the Will is the central player in getting your affairs in order. This post tells you why.
There was a time when estate planning consisted of this. When fathers died their oldest son went out to see what was in the barn. Of course, there was more to it than that. But that was the nature of family property in those days. Writing wills is as old as the Bible. And rules existed about whom should get what.
Modern life makes all this more challenging. First, we don’t usually have barns to see what is there. In our modern digital times, property inherited or passed to those we want it to go to is often intangible. Bank accounts, stock brokerage accounts, life insurance policies, and similar assets cannot be grabbed up and taken away. Lawyers call those “intangible assets”. We can grab up and take jewelry and antiques. These are “tangible assets.” The idea is tangible assets are physical; you can touch and hold them. Intangible assets have value; but that is just what everyone agrees to honor which is written on a piece of paper (or a digital entry in a computer somewhere). You might be able to hold the piece of paper; but, not the value it represents. However, Courts will honor that the value belongs to you. Most of us are more likely to have intangible assets. There may well be tangible assets, like wedding rings, the old family clock, and other items that have sentimental value. Also, real estate like our family home is included.
Important is this. Whose name is on the deed, bill of sale, account card (lawyers call this the “legal title”) controls a lot. It might be that your will cannot even control the property because of how the “legal title” reads on a specific account. So, estate planning starts with understanding what is and is not legally titled in your own name. The Will only controls property legally titled in your name. In another post, I compare estate planning to setting up Dominoes in a way that, when you push the first one, it falls on the next and then the next, and the last one falls where you want it to. CLICK HERE I believe that helps you understand this point. It is also a good review of all the issues you face when doing your estate planning.
All your property, legally titled in your name or not, has to be arranged so what you want to happen is what happens. That is “getting your affairs in order.”
The Will is the central document of all good estate planning. It does a lot.
- YOUR AUTOMATIC WILL. State law decides who gets your property if you do not write and properly sign a Will. The law calls these rules “intestacy” (literally Latin for “without a will”). Most people who look at these rules do not like the results they create. So, they need to write a Will that overrides them. The law makes this tough. Wills must be signed and witnessed in a specific statutory way to be effective. People who do not want to do estate planning and complete a Will are saying this. The statutes describe their wishes and what their Will would be anyway. In my experience, most people do not want those results.
- PERSONAL REPRESENTATIVE. You name the Personal Representative (previously and sometimes still called the Executor) in your Will. This is the person you propose that a Judge appoint to manage your “estate” (what is “legally titled” in our own name when we pass). The Personal Representative collects your property (the law calls this “marshaling the assets”). That is the court appointed officer who manages the assets until they use them to pay bills and taxes, or deliver what remains to whom you direct (which can be a trust created before you pass or by the Will).
- GUARDIAN. If you leave minor children without a parent, it is in your Will that you propose a guardian who the Court appoints to take care of them. This Guardian manages their daily lives (getting them off to school, getting them the medical care they need) and their property. Property left to a minor child in your Will, or by the intestacy rules, gets in their own hands when they become “of age.” Many parents prefer that children not control assets at such a young age (18 or 21). Alternatives include leaving property to them in trusts that can go on for longer than that. It is legally possible to name a separate Guardian of the Person and a separate Guardian of the Property.
Many people identify in their Will who would be their own guardian if they become disabled. A disability can result in a “legal incapacity” to manage your own affairs. So, a Judge appoints a guardian to do that under Court supervision. Priorities in the statutes direct the Judge when deciding who to appoint. The most important priority is who you propose. You might not like who has priority if you do not select whom you want so the Judge can honor your wishes.
- CREATE A TRUST. Will language can include the terms of a trust that comes “to life” when we pass. While managing an estate is limited in time, trusts can continue almost indefinitely. Parents often leave money to children in trusts. This is so distributions to them can wait until way past when they are “of age.” This is a “testamentary trust”; created by your Will. There are also “Living Trusts”; created while you are alive as a contract between you and a trustee. The law calls them “Inter Vivos” trusts, which is Latin for “between lives.” The person creating the trust (who the law usually calls the “Grantor”) signs an agreement with a trustee. So, such trusts literally come into existence by the act of two “living” folks. Of course, that Trustee may be a bank or trust company. Whether creating a living trust is the wiser course over a testamentary trust is another discussion. Simply, whether created under a will or while the Grantor is alive, a trust can manage property for many generations. There are other general values to leaving property in a Trust. For example, you can protect this property from the claims of your beneficiary’s creditors, or estranged spouses.
- DELIVER PROPERTY. The main purpose of a Will directs who gets the net property after administration of your estate, paying of debts and taxes. It can be divided many ways, and in many forms (including the trust). Here you can leave property in ways best for your family. For example, families with Special Needs children want to be sure they do not lose their government benefits. If there is concern about substance abuse or other self-destructive behavior, trust terms can manage how that person receives income or assets. Even if you delay eventual distribution, you can arrange that money becomes available to pay for schooling, weddings, or to start a business. There are no specific rules. You can be as creative and careful as you want.
- DELIVER VALUES. You might use your Will as a place you tell those who survive you about your values and what you hope for them. This is an age old tradition not much seen today. A simple letter directed to be read may serve the same purpose. So, if you want your passing to be a teaching moment for your family the Will just might be a way to accomplish that.
- CAN I WRITE MY OWN WILL? Remember the legal principal the lawyer who represents himself has a fool for a client. While there are many tools for writing your own Will (on the Internet or in programs available in office supply stores), the surrounding considerations are just too many and too complex to trust yourself. Analyzing what is and what is not governed by the Will is a first step. Making sure the terms clearly direct what you want is critical. Compliance with the law, in what you say and how you sign the Will is critical. This is too important to leave to non-experts. Not even all lawyers are experts in writing Last Wills and Testaments. Find an expert who does a lot of them.
- DO I HAVE ENOUGH MONEY TO NEED A WILL? If you have minor children, you still need a Will to make sure they are properly taken care of. See my post on this topic CLICK HERE. Also, I have done a manual specifically devoted to that limited project called Estate Planning is Kid’s Stuff! Let me know if you have an interest in that at email@example.com. Remember too the things a Will can do to take care of you. For example, a Will is a normal place to identify to Judges who you want to be your Guardian if you need one.
- HOW MUCH DOES IT COST? Having a Will prepared by a good expert lawyer is less expensive than the cost to your family if you do not. Different lawyers cost different amounts based on their skills, experience and other reasons. However, you should never have surprises about fees. Make sure you know what the costs are before becoming obligated to pay them.
- IS THAT ALL THERE IS? The Will is not the only document you need to deal with. This is why getting the services of a good lawyer experienced in the field is important. Recommendations from friends are one way to find that lawyer. Also, there are many “directories” that help you find the right lawyer. I would be happy to help you with that task.
SUMMARY & CONCLUSION. The ultimate benefit of having a well drafted Will is to you. Yes, it is mostly about leaving things to family and others after you are gone. However, there are specific decisions that affect you too (such as naming who would be your guardian if you need one). In my experience dealing with folks for many years they have one key desire: to make sure their family is cared for. There is no better way to have that assurance than to know you have done proper estate planning.
I look forward to working with you.
This is all devoted to guiding you to complete your own Retirement Planning, Estate Planning and Closely Held and Family Business Planning; and you gaining the Peace of Mind that comes from knowing your own future is secure and your family is protected. I help you by coaching, not teaching, so you can complete the work you need to do.
Join in! Ask Questions! Comment on my Blog posts. Most important, get to the Peace of Mind that happens when you complete your Retirement & Estate Planning. Get free “The 9 Safest Ways to Build an Income that Will Last the Rest of Your Life“ and updates of new Blog Posts and other important information by completing and submitting the form below. Also join me on my SCOTT F BARNETT CONSULTING YouTube Channel by CLICKING HERE.
DISCLAIMER: Since I am a member of the Florida Bar I should make it clear interacting with me on this site does not create a lawyer/client relationship. If I would enter into one, it is only after we sign a written agreement setting it up. I am more than happy to help you find a good lawyer when the time comes. I am retired from law practice and now focus on this blog and the matters I discuss in it. (CLICK HERE to see the WHAT I CAN DO FOR YOU! page.) Thanks for understanding.
I would appreciate it if you “Share” this article with others you believe would “Like” it too.