By a detailed estate plan I do not mean lots of legalese. I mean a plan that handles many of life's circumstances you may not expect. For example:
- What if there is fighting among the children?
- What should happen with your real estate, and what if there is a disagreement about it?
- What if one of your children has an alcoholism problem, or is a spendthrift who cannot handle money?
- Who will be the trustee of your trust, and who is second in line after that?
- What if you have co-trustees, and they disagree?
Many times clients come to my office and, as we work on the plan, I ask, "What if this happens, and what if this happens?" They invariably say, "Oh my goodness, I didn't even think about all that."
The more detail, the fewer problems later
The more detailed your plan is, and the more issues it addresses as completely as possible, the fewer problems you are likely to have on the back end. If there is a disagreement in the family, or a question about how to handle the family's real estate, and the plan addresses it, it is much less likely to become a problem.
Say one of the children has an alcoholism problem and there is a question about how to distribute money to that child. Does the plan have provisions for that situation? How and when does that person receive money, whatever the challenge is: a spendthrift who cannot handle money, a son-in-law or daughter-in-law who might get hold of the money, alcoholism or something else? The more detailed the plan, the less likely you are to have a problem later.
The trustees you pick want specific instructions about what to do and how to do it. If you leave too much to the imagination, that can lead to problems.
When general instructions are enough
Some families get along famously and there is zero chance of anything going wrong, or there is a sole beneficiary, such as one child and no one else. In that case you might get away with more general instructions. Generally, though, the more beneficiaries there are and the more issues there might be, the more detailed you want the plan to be, so it is less problematic for the family after you pass away.
If you need help with your estate plan, give us a call at 661-414-7100.