The following is a letter sent to a couple who used an internet will and then called the Law Offices of Cheryl David for assistance. The names have been changed and any identifying information has been excluded to protect the confidentiality of the clients.
Dear Courtney and James,
Thank you for allowing me to review your wills. I’m glad that you called and I’ll begin work immediately.
To recap our conversation, every state in our country has different wills and different requirements, and I’ve found, when handling countless estates for the last thirty years, that it’s what you don’t know when drafting legal documents, without an attorney, which will negatively affect your children.
In NC, you each need a will. While you may each designate your spouse to receive the estate and access the money, when it comes to your minor children, it’s a different story.
I understand that you were putting together something quick before you went away on vacation, but if you were to both die today, with your wills, I don’t think you would like the results.
As I mentioned, all of your beneficiaries should be your spouse first and then your estate, second, until your children are adults and at an age where you think they are financially responsible.
In your existing wills, you wrote, ” If my spouse does not survive me, I give, devise and bequeath my net residuary estate in shares of approximately equal value, outright and free of trust, to my descendants who survive me, per stirpes.” This language gives the money your heirs immediately, but minors can’t inherit in their own name. The money left for your children needs to be held under trust.
By utilizing different language and creating a trust in your will, to hold the children’s assets, the assets in the trust can be held by a Trustee for your children, until a certain age. I usually recommend age 25. Without such beneficiary designations, assets end up being held by the court and they can’t be accessed for the children until the Court releases them to the children at age 18. Age 18 usually isn’t the best age for children to receive these assets, and they would have been much more beneficial for the children if your trusted agent had access to them while raising the children. With our language, until age 25, your trustee would use the assets for your children, for their health, education, maintenance and support.
Your children would also be entitled to monthly social security if either of you die while they are minors.
In your wills, you also left your children your home, if you were both gone. We need special language which wasn’t in your documents to keep problems from occurring. Our language allows the Trustee to hold the house for your children, until they’re adults.
We also discussed Guardianship. You may each designate the guardians of your choice in your respective wills. Each of you would serve first for the other, and then you may each name someone to serve if both of you are gone. Courtney, you could name your sister first, and then your mother and James, you could name your mother and then your sister.
The Guardian is different from the Trustee. The Guardian manages your child and the Trustee manages your money. The same person may handle both jobs. When selecting the Trustee, they should be the person in your life whom you trust most with your money. Again, you may each name a different person, but most couples select the same Trustee.
There are four other important document that you each need, and I’ll be preparing, namely the Durable Power of Attorney, the Health Care Power of Attorney, the Living Will and a HIPAA Authorizations. These documents can save your nest egg and your life, if one of you becomes sick or is in an accident.
Thank you for hiring us to assist you with your estate planning.
Best regards,
Cheryl K. David
Attorney Law Offices of Cheryl David
Call the Law Offices of Cheryl David for assistance with your estate planning now.
