9 Who Should Get My Property?
Robert hadn’t given any thought to his estate until shortly after getting word of his diagnosis. When he learned from a consultation with a specialist the low probability of his survival for more than a short while, Robert promptly turned his thoughts to caring for his spouse and children. Fortunately, Robert had amassed substantial business assets. But most of those assets remained tied up in the business. Robert wasn’t even sure how best to pull assets out of his business interests to ensure that his wife could provide for herself and their children. Yet Robert was confident that with the right advice, he could do just that. And so even before giving substantial attention to potential experimental treatments that might extend his life, Robert engaged counsel to form and execute a solid estate plan.
Property
How large of an interest or concern your property may be, surrounding your demise, may well depend on how much property you own, its value, and its nature. You can’t take it with you. Yet you have significant control over who receives it or benefits from it. And because you have control, your family members and others may expect you to exercise that control in specific ways, for their benefit or the benefit of others. Thus, how important your property is, in the circumstances of your demise, can also depend on the number, ages, and needs or interests of your family members, and your relationships with them. You may have little property to convey and thus little concern. Or you may have much property to convey but no family member with a substantial need or interest in it. In those cases, don’t worry much about it. But otherwise, with substantial property and substantial family needs or interests in it, be wise and diligent in your property disposition.
Plan
Your estate plan provides for the orderly disposition of your property and interests after your demise. People usually think of a will as the means by which individuals direct their property’s disposition. And indeed, a will is an important if not essential part of most estate plans. In the simpler instances, a properly drafted and executed will may be all or most of what you need for your estate plan. But in many instances, you can advantage your surviving spouse or other family members and heirs by designating beneficiaries on policies or accounts, deeding real property differently, titling personal property differently, placing funds in trust, gifting property to individuals, donating property to charities, or making other arrangements alternative to bequests and devises within a will. The options are numerous and subtle enough, and peculiar enough to each individual’s circumstances, that you should seek qualified counsel for your estate plan. Do not delay. Do it now while you are competent. Once you lose your mental competency to direct your affairs, others must do so for you according to the laws of intestacy, which may differ from your family’s needs and your preferences.
Heirs
A decedent’s heirs are usually the natural objects of affection, beginning with a spouse and continuing on to children and perhaps grandchildren. But you get to choose. Your family may have a different structure. You may, for instance, have living parents in need of support. Your spouse may have predeceased you, or you may have divorced or never married. If you have children, they may have no need for or expectation of your support, or they may be estranged from you in some way that would discourage you from including them as heirs. If you are elderly enough, and your children are adults of substantial means with their own children, your grandchildren, then you and your adult children may prefer that your bequests skip their generation in favor of the grandchildren’s generation. Or you may not have natural heirs and may instead prefer to treat companions, friends, business partners, or caretakers as heirs, or to convey your entire estate to charities. Once again, you get to choose. Choose thoughtfully and wisely, consistent with your relationships and best intentions.
Dependents
A primary consideration in the disposition of a decedent’s estate is to provide continuing support for any dependents. You may have an elderly parent or parents for whom you wish to continue to provide after your demise. You may also or alternatively have an elderly, disabled, or vulnerable spouse for whom you need to provide after your demise, while protecting your spouse from coercion. You may also have minor or adult disabled children for whom to provide, under circumstances where you cannot prudently leave assets in the hands of their other parent, referring to your spouse, ex-spouse, or other individual with whom you had no marital relationship. You may in those circumstances place funds in trust for your dependents’ benefit. If you have a trusted relative to act as trustee, then you may designate that person to do so. Otherwise, you may designate a corporate trustee such as a bank, professionals from which would manage the funds as you direct, for the purpose you direct and as long as the funds last. Be wise in your estate planning for the care of dependents. You leave a special legacy when you do so.
Proportions
Family member bequests, especially to a spouse and children, tend to be by proportions of your estate, after paying debts and administrative expenses. You might, for instance, leave your entire estate to your spouse, assuming that your spouse may need the estate for your spouse’s support, and further assuming that your spouse would distribute the remainder not necessary for your spouse’s support to your children in equal proportions. Or instead, your estate may be sufficiently large to bequeath just half to your spouse, sufficient for your spouse’s support, with the other half divided in equal proportions among your children. If your spouse has predeceased you, then you might divide your estate in equal proportions among your children. You don’t have to use equal proportions. Your children’s different needs and your different relationships with them may lead you to provide for unequal distributions. You may also provide for specific amounts or percentages to go directly to grandchildren, recognizing that any specific bequests of a certain amount would generally go out of the estate before distributing the remainder in proportions. You may have a lot to consider. Give yourself time to deliberate, but also ensure that you execute your estate plan while still competent.
Charities
Whether you have family members whom you wish to treat as your heirs or not, you may wish to convey assets or funds to one or more charities or to your church. You can do so through your will, just as your will can provide for family member bequests. You may designate specific amounts to your church and favorite charities, recognizing again that specific bequests come out of your estate before distributing the remainder interests in proportions among your family members. Don’t unwisely impoverish your family members with lavish bequests to your church and charities. Instead, recognize the size and limitations of your estate when making specific charitable bequests. If you make a charitable bequest and have any concern that your personal representative and family members will not honor it, then provide a copy of your will to the charities and churches to which you make bequests, giving them an opportunity to seek enforcement. Be wise in your bequests to your church and favorite charities.
Causes
You may also support advocacy organizations and their causes with bequests. The line between a charity and advocacy organization can be vague. Many charities effectively advocate for the populations or causes their missions pursue, while advocacy organizations likewise typically serve public interests benefitting certain populations or policies through their advocacy. Your career and deepest commitments may have been to a field or cause that you wish to benefit through your estate plan. Education, conservation, healthcare, community development, and the arts are examples where the generosity of individuals and families in their estate plans have made significant contributions. If, for instance, you have no family members for whom to provide, then you may wish to promote your life-long cause rather than find charities or others who might benefit from your unexpected largesse.
Friends
Close companions and friends are less frequently the objects of generous bequests. Indeed, such bequests are unusual enough that family members surprised, disappointed, and adversely affected in their own inheritances by friend, caretaker, or acquaintance bequests may challenge them as gained by undue influence. An attorney, financial advisor, or residential caretaker, for instance, would generally be subject to special scrutiny, and may even face an ethical bar, when named the recipient of a bequest by a decedent whom they served. But if you have a close companion or friend whom you wish to favor with a bequest, you may do so, just as you may designate or choose not to designate certain family members in your will. Beware both the material and emotional or relational impact on your family members, though, if you choose to favor a friend or companion with a generous bequest. You may alternatively find that a sentimental gift of modest value during your life will suffice to honor a friend, without invading and diminishing your estate around which your family members have natural expectations.
Representative
You have the privilege of naming your estate’s personal representative, sometimes called an administrator or executor, in your will to carry out your wishes. Law binds your personal representative not only to carry your will into effect but also to follow the probate laws. Generally, individuals executing a will name as their personal representative their surviving spouse or, if their spouse predeceases them or is incapable, then the oldest, nearest, or most-responsible adult child. Communicate with your candidate before you name them so that you know that they are willing to accept the role. You may also designate a back-up personal representative, perhaps your next-oldest or most-responsible adult child. You may alternatively designate a corporate personal representative if you have no trusted and competent adult family members or prefer not to involve or burden them. Provide a copy of your will to your personal representative, holding the original will in a secure place where your survivors will know to find it. Record a copy of your will with the county clerk or other official whom your state’s law designates, if that law gives you the option and you wish to ensure your will’s discovery and enforcement after your demise.
Counsel
You should retain qualified legal counsel, specifically a skilled and experienced estate-planning attorney, to help you prepare and execute your estate plan, especially if it is of substantial value or complexity. You may find online services offering you estate plans or at least simple wills. But executing a simple will in your state’s standard form may fail to qualify your estate for significant tax or other advantages, and may fail to treat your family members, other heirs, and charities in the most favorable manner available to you. A relatively small tweak in your estate plan could make a large difference in the impact of your estate’s distribution. The execution of estate documents may also require attested signatures, witnesses, notarization, seal, recording, or other treatment simply to be effective. Don’t risk spoiling your well-intended estate plan through its incompetent preparation or execution. Retain qualified counsel, recommended through reliable word of mouth, other references, and the local bar association.
Reflection
Have you already executed a will? Does it provide for your property’s distribution according to your present wishes, or do you need to update it? Do you have other opportunities to improve your estate plan with the designation of beneficiaries or gifting or retitling of property? Did you have the assistance of a skilled estate-planning attorney in preparing your estate plan? Does your estate plan treat your natural heirs, referring to your closest family members, equitably? Will your family members understand any inequality in their relative treatment under your estate plan? Does your estate plan place assets in trust for minor or incompetent dependents? Do you have a church, charities, or causes that you should include in your bequests? Do you wish to include a friend in your bequests? If so, would your family members understand your doing so as being free from undue influence? Have you chosen a personal representative whom you can trust to carry out your estate plan according to your wishes?
Key Points
Provide for your property’s timely and proper distribution on demise.
Prepare and execute a thoughtful estate plan favoring your heirs.
Choose your heirs from among your natural objects of affection.
Ensure the continuing provision of your dependents after your demise.
Make equitable proportional distributions of your estate remainder.
Include church and charitable bequests without harming family.
You may also advance causes important to you through your bequests.
Include friends among bequests cautiously, without undue influence.
Choose a trusted personal representative to carry out your estate plan.
Retain qualified legal counsel to draft and properly execute your plan.