My process is pretty straightforward when people come to me to create a will and/or trust. I present them with an intake sheet, which asks all the questions I need answered to create their will and trust (yes, it’s a lot of pages). I try to get all the decision-making done upfront, so the rest of the process is just memorializing their wishes on paper. After doing this for several years (I don’t want to depress myself with an exact number), I find there are many things most clients have never considered. With that in mind, here are a few things to consider when creating your own will or trust.
- Do you want to have a provision for your pets?
This topic is growing in popularity as far as the things you should consider when creating your own will or trust. Now, this consideration isn’t always necessary – sometimes clients have a child or friend they know will take the pets, and everyone else will bless them for it. But sometimes, the client has a specific person in mind, but it’s unlikely that the person will step forward unless they’re named. And sometimes, the client knows that everyone wants the pet, so they want to name a person to ensure there’s no fight about it. Whatever the situation, if there’s a specific person you want to take your pets, you should probably say so in your will or trust.
You may also want to set some money aside for the pet to ensure that the pet is taken care of. The new owner may or may not need it, but it can be helpful while they’re adapting to the new household addition.
- Do you want your house to be sold?
Most of the time, the house gets sold as part of the estate administration because, in most cases, the beneficiaries want the money more than they want the house. However, in some cases, a client does not want the house to be sold (e.g. their children are too young to decide if they want the house, or they want their child to be able to grow up in the family home). In other cases, one child wants the house, but their siblings want it sold yesterday. Or the client may have multiple properties and want to give specific properties to specific people. If any of these are true for you, you probably want to have a provision that tells everyone what will happen to the family home.
- What happens if your beneficiaries don’t outlive you?
No one wants to think about this possibility, but unfortunately, it sometimes happens. If you have five children and fifteen grandchildren, you probably don’t need to worry about it, but if you’re giving your entire estate to one or two people, you should probably think of a backup plan if they’re not there to inherit.
If you don’t think of something, the California Probate Code has a backup plan in place. Your estate will go to your closest blood relatives if you don’t have a living beneficiary. For some people, that’s fine and dandy; for others, this is their worst nightmare. If you fall into the latter category, a backup plan is essential.
- When/how do you want your children (or other young beneficiaries) to inherit?
Minors are not allowed to inherit outright, so their share has to be held in trust until they’re 18. I don’t know about you, but I wouldn’t trust most 18 year olds with an inheritance, so it would be a good idea to set a higher age limit for them (e.g. 25).
It also doesn’t hurt to break up their inheritance into chunks distributed over time. That way, even if they blow through their first distribution, they still have a chance to be smart when the subsequent distribution rolls around.
- Are any beneficiaries receiving government benefits for a permanent disability?
If you have a special needs child or if a beneficiary became permanently disabled later in life, then an inheritance may be a curse rather than a blessing. These government benefits are needs-based, meaning that if the recipient comes into money, then the government benefits stop. In addition, many disabilities make the person incapable of managing funds responsibly, making it unwise to give them the money outright. You should seriously consider a Special Needs Trust when you have a beneficiary who cannot manage money, and/or who will lose government benefits if they receive an inheritance.
A Special Needs Trust holds the money for the beneficiary and uses it to supplement their government benefits rather than replace them. It’s also possible to have multiple people involved to ensure the beneficiary gets the right level of care for their particular disability. The beneficiary will never have direct access to the funds, but the funds will be used to help and support them. Most Special Needs Trusts also have provisions allowing the trustee to dissolve the trust should the beneficiary become capable of supporting themselves. All in all, it’s an excellent tool when you have a beneficiary on government benefits.
These are just a few of the questions I ask on my intake sheet (like I said, it’s a thorough form). And I would suggest they are at least some of the things you should consider when creating your own will or trust. If you would like to learn more about these topics, or if you would like to come in for a consultation, you can feel free to email me at firstname.lastname@example.org.