Black Sheep Estate Planning and Myths
When we get to that point of creating an estate plan, we tend to figure out the collective feeling. What I mean exactly is the overall emotion everyone has about the situation. We might feel happy, sad, or even angry at the person whose estate is being represented. Usually the feeling is going to be mutual with everyone else. The circumstance on wealth and relationships are going to be a factor when thinking about the future. Though it’s one thing to get an understanding on how everyone as a whole feels, its another when an individual has another opinion.
Every family is bound to have one person whose personal situation is questionable. Are they mentally capable of making their own decisions? Are they in a financially secure place? Do they have a substance abuse problem? Are they irresponsible with money? The good news is that all of these factors can be acknowledged within an estate plan.
I’ll bet before you clicked on this link to read the article, you’ve already done a web search about those issues and might have even come across statements that you weren’t sure were fact or a hundred percent true. I’m going to go through a couple of myths surrounding “black sheep” family members and estate plans.
Myth 1: You have to divide your estate plan equally amongst your beneficiaries
This is NOT true. In fact, this is something I encourage depending on the family. Just because your want more of your assets to go to someone over the other doesn’t mean your don’t love that other person. A good example would be if you have someone in the family who is mentally disabled. They may require a larger share if they need a more secure position with their medical and caregiver expenses covered. Or there may be a situation you want to disinherit a beneficiary. That doesn’t mean you don’t agree with their choices. But perhaps someone in the family is starting a new business and needs the extra assets to get things moving.
Regardless of the reason for anything, dividing assets unequally should be explained before anything is set in motion. Though it also helps to have a documents that explains your decision.
This is also why I highly recommend checking your estate plan sporadically to see if you still want you beneficiaries to receive assets as you planned when the document was laid out.
Myth 2: I can’t change my mind once I set up to have a beneficiary disinherited
This is NOT true. Like I said before, I recommend going back to your estate plan every couple of yours and thinking about everyone’s position. Are they in a better place? Has something come up? Life is full of surprises and one of them may force a chance in how things are distributed.
Myth 3: You can’t control things once your dead
This is NOT true….sort of. Once You’ve passed on, unless there’s a new way to resurrect the dead, you yourself are gone from direct control. However, your estate plan gives the ability to see your wishes carried out. Does someone in the family need an incentive before they receive their distributed assets? You have the ability to create a distribution contingent (a clause that says they can receive something after they done something). This can range from unlocking funds after finishing college, and allowance if proven to be in rehab.
This goes back to the idea that not all distribution has to be equal. What this does do, is ensure that something needs to be done in order to receive an asset.
Myth 4: Trusts are complicated and a pain to control
As long as you have everything set with a good lawyer…then this is NOT true. Let’s say that someone in your family has special needs and requires someone to look after his well being. A special trust can be created with someone being appointed a trustee that’ll take charge of the responsibility. But if naming someone is too much of a burden, then naming a professional trustee is also an option. Yes, there are costs to a corporate trustee, but you also have to debate at what cost are you willing to stick to with that family member.
Though let’s be honest, making these kinds of decisions are never easy. Just the thought of speaking to a lawyer about the future of someone’s passing can make you uneasy and even depressed. But I can tell you now that its better to do this as soon as possible then wait until it’s too late. Our law office can help guide you through this subject with ease and determine what action is best for your family. Click on the button below for more information or to contact us.