How a Letter to Your Executor or Trustee Conveys Your Wishes

A letter to your executor or trustee can help clarify your wishes and promote your goals for your beneficiaries.
A letter to your executor or trustee can help clarify your wishes and promote your goals for your beneficiaries.

A detailed, informative letter can be invaluable to those you have designated to carry out your wishes after you’re gone, says the article “Why You Should Write a Letter to Your Executor—and What to Say in It” from The Wall Street Journal. Your last will and testament or living trust does have many directions. However, there may be things you want your executor or trustee to know that may not be included in your will or living trust. This is especially important if death is sudden. The letter, which you should sign and date, can help prevent potential disputes by minimizing any confusion around your intentions, priorities and goals.

One thing to keep in mind when writing out instructions is that, if you have a will-based estate plan, the executor is charged with the responsibility of paying your debts and final expenses and then distributing the remaining assets to the beneficiaries. So the executorship is really a relatively short-term position. If you have a trust-based estate plan, it is your successor trustee who has these duties.

Because the executor has no control over your assets after they are distributed to your beneficiaries, a letter of instruction will be most helpful if you have created trusts for your beneficiares in your will or living trust. Think of the trustee of these trusts as being involved long-term. That said, there may be situations when a letter to the executor would be very helpful. For example, a letter could explain why you have decided to treat beneficiaries differently in your estate plan.

Here are some things to consider when drafting a letter to your executor or trustee.

Your thoughts about wealth. Share your story about how you came to the assets that you are leaving in your will. How was your wealth created, what do you value and what are your long-term goals for your wealth? Do you want family members to invest the assets, so they grow over generations, or do you want them used for college education costs for grandchildren?

Describe key players in the family. It is best if your executor or trustee knows the members of your family.  However, they may not know the family dynamics or history. Giving them your insights, may help them anticipate issues. Does one child tend to take over and speak for everyone, without being asked? Are there substance abuse issues in the family that need to be considered? Share your concerns, so your executor or trustee can be mindful of how the family works (or doesn’t) as a unit.

What matters to you? This is especially important, if you don’t want your beneficiaries to be dependent upon their inheritance, instead of becoming self-reliant. Share your values to encourage their earned success. Make it clear if you want to protect the family wealth, so it can be used to empower future generations and for family members to be responsible for their own financial well-being. Evidence of your intent will help a trustee if a beneficiary challenges the way a trustee is managing and making distributions from the trust.

Give your  trustee the power to make decisions, even when that means saying no. Considering the size of your wealth and the family members who are your beneficiaries, you probably have a good idea of who would do what with their inheritance. If you don’t want your wealth to be used for a start-up by a son whose financial management capabilities are questionable, say so in the letter to your trustee. If you are hopeful that a daughter will use her inheritance for a down payment on a home for her family, you should also express that.

A good estate plan is not just about who gets what and when. A good estate plan is one which tries to minimize conflict and promotes the values you hold dear. That’s why it’s important to consult with an experienced estate planning attorney who has worked with many families and who understands the challenges and pitfalls that are presented any time wealth is transferred from one generation to the next.

You may also be interest in https://galligan-law.com/does-your-executor-know-what-to-do/.

Reference: The Wall Street Journal (April 8, 2020) “Why You Should Write a Letter to Your Executor—and What to Say in It”

 

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When an Elderly Parent Refuses to Make a Will

An elderly parent may need your encouragement to get an estate plan.
An elderly parent may need your encouragement to get an estate plan.

This is a tough scenario. It happens more often than you’d think. Your elderly parent or other family member owns a home, investment accounts and a retirement account, but doesn’t want to have an estate plan. They know they need to do something, but keep putting it off—until they die, and the family is left with an expensive and stressful mess. A recent article titled “How to Get a Loved One to Visit an Estate Planning Attorney Before It’s Too Late” from Kiplinger, suggests ways to talk to a family member about the need for an estate plan.

Most people put off seeing an estate planning attorney, because they are afraid of death. They may also be overwhelmed by the thought of how much work is involved. They are also worried about what it all might cost. However, if there is no estate plan, the costs will be far higher for the family.

How do you get your elderly parent or other family member to understand that they need to move forward?

Talk with the financial professionals your elderly parent or family member already uses and trusts, like a CPA or financial advisor. Ask them for a referral to an estate planning attorney they think would be a good fit with your family member who doesn’t have an estate plan. It may be easier to hear this message from a CPA, than from an adult child.

Work with that professional to help your older family member get comfortable with the idea of talking about their wishes and values with the estate planning attorney. Offer to attend the meeting, or to facilitate the video conference, to make your loved one feel more comfortable.

An experienced estate planning attorney will have worked with reluctant people before. They’ll know how to put the older person at ease and explore their concerns. When the conversation is pleasant and productive, the person may understand that the process will not be as challenging as they had thought and that there will be a lot of help along the way.

If there is no trusted team of professionals, then offer to be a part of any conversations with the estate planning attorney to make the introductory discussion easier. Share your own experience in estate planning with your older family member and mention the reasons that prompted you to create an estate plan. Those reasons could include the peace of mind knowing that your family will not be faced with the time consuming and expensive task of trying to straighten out your affairs after you are gone.

Sometimes the best way to initiate a conversation with your elderly parents about estate planning is to mention that you are planning to do your own estate plan and ask their advice on what issues your should be considering. That may make it easier to ask your family member what they have done regarding their own estate plan.

Trying to force a person to engage in estate planning with a heavy hand, almost always ends up in a stubborn refusal. A gentle approach will always be more successful. Explaining how an estate plan includes not only distributing assets at death, but planning for medical decisions while the person is living, may motivate an otherwise reluctant family member to take that first step.

Describing what the family members will need to go through if there is no will, may or may not have an impact. Some people don’t care, and may simply shrug and say, “It’ll be their problem, not mine.” Consider what or who matters to the person. What if they could leave a gift to a favorite charity or create a fund for their grandchildren to go to college? That might be more motivating.

Another thing to consider: what if your elderly parent or family member has an estate plan and it is out of date? That may be just as bad as not having an estate plan at all, especially if tax laws have changed since the estate plan was made. Also, what if, instead of naming their children as agents to make medical decisions for them, an old health care directive names an undesirable person, such as a former brother-in-law to make medical decisions?

Most people really want to have an estate plan in place, but just never get around to doing it. You could provide a great service to your elderly parent or other family member by giving them the encouragement and assistance to move forward so they can cross this task off their list of things they need to take care of.

You may also be interested in https://galligan-law.com/caring-for-an-elderly-parent-without-ruining-your-relationship/.

Reference: Kiplinger (May 11, 2020) “How to Get a Loved One to Visit an Estate Planning Attorney Before It’s Too Late”

 

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Warning Signs That There May a Will Contest After You Die

Address issues in your estate planning now to avoid a Will Contest later.
Address issues in your estate planning now to avoid a Will Contest later.

One of the goals of estate planning is to avoid conflict in the family, including a Will contest, after a loved one passes away.

Take a look at the following situations. If any of them apply to you, know that you can take steps now to minimize the chance of a Will contest in the future.

Here are 10 warning signs that there may be family conflict after you are gone:

  • There are step-parents and step-children – and you want to be fair to everyone
  • You have lent money during your lifetime to one child; or one child has needed more help from you during your lifetime than your other children.
  • You plan to leave all or a large portion of your estate to charity or to a non-relative.
  • You have a lifestyle certain members of your family don’t approve of.
  • You have children who don’t get along – it will get worse after you are gone.
  • Your children’s abilities to handle money differ – one is prudent, another is a spendthrift.
  • Your extended family members disagree on how your minor children should be raised if you are not there do to so yourself.
  • Some of your children work in the family business; others do not.
  • One child has moved into your house to take care of you (or has moved into your house because of a financial setback).
  • You have family heirlooms and have not left instructions on how they are to be divided.

Every family has its issues. While it may not always be possible to eliminate all conflict, there are ways to structure your estate plan so as to minimize the chance of a Will contest. If any of these situations apply to you, contact an estate planning attorney now to find out what steps you need to take to preserve family harmony in the future.

You may also be  interested in https://galligan-law.com/does-your-executor-know-what-to-do/.

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