Wow! What a crazy year! The holidays are coming, but boy are they different this year! Covid looms all around us and many of us are missing out on the big family gatherings; some of us limiting things to immediate family and others forgoing it all. The thing to remember is simply that it’s all about family, isn’t it?
So as lawyers when we think about family, often the first thing we think about are wills. We lawyers are often pretty clinical about things; we have to be. Wills are often pretty touchy subjects, but it’s just one of those things that you have to put sensitivities aside and think about and getting one.
Covid truly makes us realize how fragile life is; but in truth it didn’t take Covid to make it so. We always say that our lives – and anyone’s - can change on a dime. So we are not saying that now is the time to get all somber, jump down your parents throats or skip all festivities and do an accounting of your assets. We’re saying the holidays are a good time to talk to your loved ones, to think about your own desires and to take stock of what you have.
Many people don’t have wills. Each state has laws which control where your stuff goes if you pass away without having one. The laws may be fine with you. The more assets you have, obviously the more crucial it is to have a will. Yet, almost everyone has something they hold dear, that they would like to specifically say who gets it.
There’s also the issue of cost. Many don’t realize that if you have very few assets, your will is simple and thus not costly at all. Also, there are things that are in addition to a will – maybe you need a trust, perhaps a power of attorney (so that if something happens to you where you are incapacitated, someone else can sign on your behalf), or perhaps Covid has made you think of the medical decision making documents that you might need if you are not in a position to make medical decisions yourself.
So start the basic process of discussion. Let’s start with your parents.
1. Do they have any of these documents? If so, where are they kept? What is their attorney’s name and phone number. Who is the Executor (the person in charge of doing the duties under a will) or Trustee (person in charge under a trust)?
2. Do they have a list of assets with details (like account numbers)?
3. Do they have online banking of their accounts? Make sure to get their username and passwords and to update you whenever the passwords change?
4. If they don’t have these documents, have they considered how they would like their assets to be disposed of?
5. Burial wishes. Again a very touchy subject. Yet it is crucial to know their desires and this is often included in a will. Even more important is the details of any burial plot because sometimes the actual will may not be found in time.
6. Is a trust appropriate? There’s 2 basic types of trusts: revocable (they can undo it at any time) and irrevocable (not undoable). Tax benefits are given to irrevocable trusts but not to revocable ones. Yet, revocable trusts can be helpful in avoiding probate. Probate is the court process regarding dealing with a will and the division of assets after someone dies. In a trust, the Trustee administers the trust and often can do it with no court interference, although each state has strict laws to guide them on how they must act.
7. Is it possible that an old will might need to be updated? People often make joint appointments – which can now mean including a divorced spouse, someone who has passed away and many other things that are inapplicable. If the will or trust included successors ( someone who serves if the first chosen is unavailable) they will step in. Yet, often there is no second successor chosen. Since you don’t want to change your will on a regular basis, it’s good to have a successor that is viable.
Now think about yourself.
1. Have you considered who you trust enough to be your Executor or Trustee? Sometimes people will even pick an accountant or lawyer to serve. Sometimes you’ll have one person as your Executor and a separate Trustee to manage the trust for your children. It’s wise to have your children’s appointed Guardian(s) as the Trustee of the trust for their benefit if the person is financially responsible and is the person you would trust most to raise your children. However, suppose the person you desire would be the most loving Guardian to your kids, yet isn’t necessarily the most financially savvy?
2. Write down your assets, including accounts, online banking usernames and passwords and keep it in a safe place. It’s easy to forget about things and things can get very complicated. Banks are taken over, change account numbers, lose beneficiary documents and can make it terribly crazy. Keep some nice folders where you keep copies of documents and important things like beneficiary designations. Also take some time to check that everything is up to date as far as names, account numbers and etc.
3. Truly think about and discuss some of the possibilities. Is that person you counting to take on your beloved dog really willing to do so? Suppose they are unable to ? Same with Guardians.
4. If you cannot make medical decisions for yourself, who do you trust to do so? Do you want a Do Not Resuscitate order?
Now it may not be fun to think about this – so what happens if you just forget about it? Well if you pass away with no will, you’re considered ‘intestate ‘. Each state has its own laws. Generally if you die and you are married, everyone assumes that all your assets go to your spouse. This is not necessarily true! Each state is different but generally they get 1/3 to 1/2 and the rest will be divided by your children if you have them. No spouse? Generally, if your parents are alive it will all go to them – not to your brothers and sisters. Dislike you deceased brother’s two bratty kids? Depending on the state, they may get what would otherwise be his share. You get the point. Each state has orderly rules for division – but not necessarily the ones you would want!
It’s much more complicated than even the above, but just start thinking, taking stock and talking to your loved ones during these times. Then reach out to us!
Happy Thanksgiving!