Reasons to Talk to an Estate Planning Attorney
Reason #3: You plan to name more than one beneficiary to your estate. This post will focus on some issues surrounding multiple beneficiaries who may receive gifts together. It may seem simple enough to give everything to your spouse then equally to your children (or parents or siblings or friends, etc.), but there are so many potential legal and practical consequences that need to be considered.
Co-ownership of property. A and B are beneficiaries of an estate that contains a house and bank account. The money is straightforward enough, but what happens when two non-spouses own property together? We recently dealt with a Will that left everything to several different individuals, some children, others grandchildren. We do not have the luxury of asking the person who executed the Will (the Testator) what they were thinking, but it is a safe bet that they just wanted all of their children and grandchildren to receive “something” from the Will. The problem is, the something they received is an undivided interest in property that cannot be easily sold without the consent of all of the other beneficiaries or an expensive lawsuit. For these reasons, among others, it is dangerous to execute a Transfer on Death Deed without hiring an experienced estate planning attorney. Some basic language and additional planning could have allowed for a much cleaner result.
Specific dollar amounts. I give $25,000 to my nephew and the rest of my estate to my kids. Simple, enough? Not in the least. What if there is not enough cash? Does property get sold? If so, what? What if there is only $25,0001 in your estate? Are comfortable with the nephew getting more than the children? These are just two examples of many that most people don’t think about when they do their own estate plans.
Property already in use by a beneficiary. It is not uncommon for a beneficiary to be living in a house or using a vehicle that is part of an estate. It may seem obvious that the person using the property would get that property, but without the proper drafting and safeguards, this is far from certain. Additionally, it can be difficult to have the “can I have that” conversation with someone after a devastating loss. Both practicality and sentimentality can very easily be misinterpreted as greed. There are some situations where you simply cannot do or say anything right because people are upset.
The self-appointed only child. Very frequently the family dynamic involves one child who, despite all of their parents’ statements and paperwork including all of their children, feels entitled to the entire estate for reasons only that person can understand. If there is no Will or Trust, if there are ambiguities in the documents, if the executor/trustee is not given sufficient authority, this type of individual is likely to latch on to any flaw in the plan that can be exploited to gain leverage or simply make life difficult (and expensive).
One post cannot begin to cover the hundreds of ways estate planning can go wrong if the drafter does not have the necessary background, experience, and dedication to thoroughness. Call Ramsey Law at 210-366-8732 if you have questions about how to properly set up your Will, Trust or deed.