The Will to Succeed

Guest blogger Elizabeth Leverage Hilles’89, Director of Trusts, Estates, and Gift Planning at the University of Virginia’s Law School Foundation and gift planning chair for her 25th Reunion, shares five common estate planning “myths” that can create unintended problems and consequences for you and your family.

Myth #1:  Appointing an executor is easy; so is appointing a guardian for my children.

Well, sort of.  It’s not difficult to choose an executor or trustee, but you want to be sure your chosen fiduciary is able and willing to undertake the legal and financial responsibilities of administering your estate or a trust you create.  Typical appointments include a spouse, child, sibling, trusted friend, or sometimes a financial institution.  You should also consider whether to appoint two or more fiduciaries to serve jointly.  And, be sure to appoint a successor if your first choice(s) can’t serve. 

Although there’s ample information out there regarding what to consider when appointing an executor, there’s not much guidance on what to think about when appointing guardians of minor children.  Unlike an executor, whose duties will typically terminate within two years of your death and who is supervised by the probate court, a guardian of a minor child will serve until your child attains the age of majority and will make all health, education, and other important decisions for your child.

It’s important to think through your wishes thoroughly. If you appoint a married couple jointly — for example, your sister and her husband — as guardians of your minor child, what will happen if they get divorced before or after you pass away?  And what if your sister predeceases you?  Do you want your brother-in-law to serve alone as guardian of your minor children? 

It’s important to plan for the unthinkable.  It will save heartache, legal fees, and bad feelings later.  Your family will appreciate clear direction on your wishes, and you’ll have peace of mind knowing that every contingency has been addressed.

Myth #2:  Hooray!  I’m going to save money because my neighbor will do my will for free/I’ll find a good form on-line and do it myself.

The saying “penny wise, pound foolish” comes immediately to mind.  I don’t practice estate planning law anymore, but it used to baffle me when friends would tell me that they didn’t want to pay to have an “expensive” lawyer prepare a will for them. 

Your estate plan involves your last opportunity to take care of the people you love and charities you want to support, and it involves everything you own and have worked for your whole life, so you should value your desires enough to have them implemented properly.  I have seen (and had to litigate) some poorly drafted wills that failed to address many of the most straight-forward issues, and I’ve seen seemingly small mistakes on life insurance and retirement plan beneficiary designations cause unintended consequences.   

Most importantly, I’ve witnessed heartache and dissension in family members who are grieving, but find themselves embroiled in litigation because of a poorly drafted document that is now making it through an arduous court system.  And I’ve seen the wishes of a decedent destroyed by compromises needed to settle matters.

I recommend that you find a good, quality lawyer who specializes in estate planning (not your neighbor or cousin who practices some other type of law and promises to do your will “for free,” or heaven forbid an online form!)  You’ll save money in the long term, and you’ll know that your affairs are buttoned up for your wishes to be carried out.

Myth #3:  Once my will is done, my estate plan will be complete.

Not so fast.  Your will only governs the disposition of “probate” assets that are titled in your sole name at your death. It will not affect the distribution of assets that you own jointly or for which you have a beneficiary designation on file.  Examples include life insurance proceeds, retirement plan assets, real estate, bank and brokerage accounts, and any other asset that passes by operation of law outside of your probate estate.

Those assets often comprise the largest monetary value that will be distributed when you pass away.  Thus, a big part of your overall estate plan will include focusing on how those assets should be titled and distributed.  You should review and update your beneficiary designations as part of your planning, and you may want to consider retitling some jointly held assets to make your plan work.

Myth #4:  My estate is too small to need a will.

Not true.  A will is important for everyone, unless you’re OK with the state legislature dictating where your assets go.  Typically, state intestacy statutes require that everything be distributed to a living spouse or to the children, who will get everything outright if they are already the defined statutory age (usually 18).  If you are remarried and have children from a prior marriage, the statute may say something quite different. If you want a say in how your estate will be distributed, you should have a will.

Myth #5 (well, it’s not really a myth – more of a suggestion!):  I already have a will, and it’s locked away securely in my safe deposit box. 

It’s wonderful that you have a will, and a safe deposit box is certainly a safe place to keep it, but keep this in mind:  when you die, your executor will need to file your original will with the probate court.  If that individual doesn’t have access to your safe deposit box, he or she will first have to petition the probate court for approval to access the box for the sole purpose of retrieving the will, go to the bank to retrieve the will, and then take it back to the court to initiate the probate process. 

If no one knows you have a will stored in your safe deposit box, your family may search through all of your paperwork at home and conclude that you passed away without a will, leading to an intestate estate administration process.  It could take a long time for your executor to discover that you ever had a safe deposit box, much less a will, extending the estate administration process even further.

Think through how to keep your will secure, but also be sure that your intended executor and one or two other family members know where to find it.  Note that many law firms will hold the original will for you and give you conformed copies (not photocopies) of the will for your own files.  Whoever is going through your papers after you pass away will find the conformed copies and know where to find the original.

To learn more about Elizabeth or to contact her, please visit her faculty page at UVA.

TAGS: Estate planning bequest legacy will myths

About the author

Gift Planning

giftplanning@duke.edu

Duke University’s Office of Gift Planning specializes in charitable gift planning for estates, charitable trusts and annuities, and other complex current and future gift plans.

For more information, please contact the Duke University Office of Gift Planning at 919-681-0464 or giftplanning@duke.edu.