Article summary: We consider some real-life scenarios in which an intentional estate plan would be beneficial. State probate law is an inflexible, one-size-fits-all estate distribution option that is unlikely to meet with the approval of the deceased or the heirs in most of these cases.
Last week I talked about three common reasons people give for not wanting to create an estate plan. Let’s take a look now at some good reasons to make an intentional estate plan. It is important to realize there are common family dynamics that state probate laws do not consider.
If any of these situations describe your family and you have your own ideas on how your assets should be taken care of upon your death, you’re going to need to be proactive. Otherwise, you’re at the mercy of the courts and the law.
Consider these various scenarios:
- You are childless and have always been so.
- You have children who are still minors.
- You have children who are deceased…who had kids of their own before they passed away…or who were childless before they passed away.
- You have step-children.
- You have adopted children.
- You have estranged children.
- You have a special needs child…or more than one.
- You have children of vastly different ages, stations in life, income-producing capacity, money-management skills, or levels of maturity.
The probate laws of your state are inflexible. Families are ever-changing, occasionally messy, and always complex. If any of the above scenarios fit your life, your intentional estate plan can provide direction to your executor about which members of your family get what you want them to receive. In the case of scenario #1, you get to decide who becomes legal guardian of your minor children and who manages the assets of those minor children (e.g. life insurance proceeds). If you don’t decide, a judge who doesn’t know you or what is important to you will do assign a guardian for your children.
Now consider these scenarios:
- You want to determine who gets specific family heirlooms.
- You don’t want your children to receive their entire inheritance all at once…because you are afraid they would spend it all at once on something red with four wheels…or because they are too young (or did I just repeat myself?)…or because it is important to you to give your heirs a stream of income small enough to require them to continue working productively in society but large enough to allow them to pursue a career that will bring them happiness regardless of how little it pays .
- You want to prevent your family from fighting over money…or you don’t trust any of your heirs to manage your estate.
- You believe enough in the mission of your church/alma mater/community foundation/local food bank/etc. to want to bequeath some of your assets to that charity…or you have no close living heirs and you want your entire estate to go to help the poor (or poor college students).
- You want to use certain assets to pay off personal debts (or estate taxes)…or you don’t want certain other assets sold for any reason.
- You have a family history of physically debilitating disease…or mental illness…or have been diagnosed with either.
- You do not wish to have extraordinary life-saving measures taken on you in certain instances…or wish to be an organ donor.
The last two scenarios can be addressed with a Durable Power of Attorney, a Medical Power of Attorney, and a Directive to Physicians. The other four scenarios are just a few examples of what can be covered with a properly created will, but that your state’s probate code most likely will ignore.
Next week we will look in more detail at what can (and cannot) be done with a will. In the mean time, if you would like more information or advice on creating a will that accomplishes your goals, please contact The ACU Foundation. My email address is chris.sargent (at) acu.edu. Our toll-free phone number is 1-800-979-1906. Our services are completely confidential and completely free of obligation or monetary cost.
Disclaimer: All information on this blog is for educational purposes only. Employees of The ACU Foundation, and the writer of this blog specifically, are not attorneys and are not your adviser. Call us or come see us if you have any questions about this. See here for a more comprehensive (and more boring) version of this disclaimer.