"The Talk" Part Four

So now, you know the importance of talking to your loved ones about your estate plan as discussed in “The Talk”: Part One.  You know what to say to your decision makers, quasi-decision makers, information agents, and non-decision makers (click here).  Now I will focus on your beneficiaries and people not included in your trust but who may be under the impression that he/she will be included.

Beneficiaries:

Ray Charles tried to do the right thing.  He met with 10 of his 12 children in Los Angeles to discuss his trust and to try to prevent issues from arising once he passed.  However, it appears he was not clear enough with his kids.  Although he stated that each kid would receive $500,000 upon his death, each kid thought he/she would receive $1,000,000.  Additionally, the kids thought they would inherit the right to license his name and likeness for profit based on Mr. Charles’ statement that they would receive more “down the line.”  This ambiguity called into question whether his trust was really his final wishes.  We may never fully know what Mr. Charles meant when he said “down the line” but I do know that if he had been specific and not added any comments, the children most likely would have not contested the trust.  Read my earlier blog about if a trust can be contested.  Therefore, the moral of the story, let your beneficiaries know what he/she is expected to receive or not to receive.  You can provide your beneficiaries with as much information as you feel is necessary, but do not feel like you need to tell them what everyone else is getting. Make sure you are specific and choose your words carefully.

People not included, but think he/she will be included:

One of the hardest parts of my job is explaining to someone that he/she has been excluded from a trust.  It can be devastating, especially if you do not leave an explanation of why this particular loved one, or not so loved one, was intentionally left out of your trust.  People are left out of trusts all the time and for various reasons.  Sometimes the loved one has built up a sizable estate, and you do not want to create a tax issue.  Or maybe the child has a drug problem so you do not want to finance his/her drug habit.  Whatever the reason for the exclusion, you need to talk to the loved one to prevent confusion and deter him/her from contesting the trust.  Better yet, talk with your attorney to see if there are ways that your trust can be drafted to be able to not exclude, but set aside, the loved one’s share.

Keep in mind that all situations are different and there may be certain situations where you may not want everyone to know about your final wishes. Make an appointment today to speak with one of our knowledgeable estate planning attorneys to discuss your specific situation so that your wishes will be carried out in the manner that you choose.

Contributed by an MH Phoenix Estate Planning Attorney.

Why Choose Morris Hall:
You have a number of options when it comes to estate planning, so why pick Morris Hall?  First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters.  Also, MH is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones.  We are one of only two firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership.  If you have assets and loved ones that you want to protect, you are in good hands with MH.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.