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More Information about Last Will and Testaments
What is an Executor?
Do you have Minor Children?
Do you have Minor Children?
An Executor is appointed to administer your Last Will and Testament. Your Executor has three basic duties:
- Collect, identify, and evaluate all your assets and all your debts.
- Pay and otherwise settle all your debts and taxes.
- Distribute the money that is left over to the people or charities you named.
Do you have Minor Children?
Do you have Minor Children?
Do you have Minor Children?
If you leave a minor (under the age of 18 years) child at the time you pass away, the Probate Court will appoint a Guardian to raise the child and handle the child’s affairs until the child reaches the age of 18 years.
You can nominate a person to serve as Guardian for your minor children. Typically you want to nominate someone who holds values and attitudes toward parenting that are similar to your own.
A Guardian has two primary responsibilities:
1. Act as a parent of the child, raising the child until it reaches the age of 18 years.
2. Follow the instructions of the Probate Court.
Then, when the child reaches the age of 18 years, he or she can leave the guardianship, collect whatever Estate money remains in the hands of the Guardian, and go on his or her way.
There is some risk in putting a lot of Estate money in the hands of an 18 year old person. He or she is legally an adult, but may not be mature enough to handle a large inheritance.
A Testamentary Trust may offer some protection for the young or immature beneficiary.
Testamentary Trust
Do you have Minor Children?
Testamentary Trust
One way to protect a child from receiving too much money when he or she is too young is to include in your Last Will and Testament a Testamentary Trust:
1. A Testamentary Trust is a Trust that is created in a Last Will and Testament.
2. It is supervised by the Probate Court.
3. It holds the Estate money and uses it for the child’s expenses until the child reaches an age that you specified. (Age 25 is a very common age for our clients to select.)
4. Then, when the child reaches the specified age, he or she may take possession of whatever Estate money is left in the Trust.
It is, of course, your hope that by the time the child receives the money, he or she will be mature enough to handle it wisely.
Specific Gifts
Special Needs Beneficiaries
Testamentary Trust
Some people want to make gifts of specific personal items or of an amount of money to an individual or to a charity. These gifts can be accomplished in three ways.
To Individuals:
- Identifying specific items of personal property. For example, “I give the piano that I inherited from my grandmother to my granddaughter, Susan.”
- Giving a set amount of money. For example, “I give Five Hundred Dollars ($500.00) to my granddaughter, Susan.”
- Giving a percentage of your Estate. For example, “I give ten percent (10%) of my Estate to my granddaughter, Susan.”
To Charities:
- Identifying specific items of personal property.
For example, “I give the piano that I inherited from my grandmother to St. John the Baptist School.”
2. Giving a set amount of money.
For example, “I give Five Hundred Dollars ($500.00) to St. John the Baptist School.”
3. Giving a percentage of your Estate.
For example, “I give ten percent (10%) of my Estate to St. John the Baptist School.”
Conditions:
Specific gifts also can be given with or without conditions. Conditions are your instructions for how the gift is to be used. For example, a gift of money to your granddaughter for her education might read something like this:
“I give Five Hundred Dollars ($500.00) to my Granddaughter, Susan and I direct that she use the money for school tuition and for no other purpose.”
You also may restrict a gift to a charity:
“I give Five Hundred Dollars ($500.00) to St. John the Baptist School to use toward scholarships for children who demonstrate financial need.”
Risiduary
Special Needs Beneficiaries
Special Needs Beneficiaries
The Residuary of your Estate is defined as what is left after payment of:
1. Debts
2. Expense of administration
3. Taxes
4. Specific Gifts
The Residuary of your Estate is divided among the Residuary Beneficiaries of your Estate in one of two ways:
1. Equally
2. Not Equally
Special Needs Beneficiaries
Special Needs Beneficiaries
Special Needs Beneficiaries
In the case of a child or other beneficiary with special needs, that is, a beneficiary who is and who likely will remain unable to support himself or herself, a host of other matters must be considered for the special needs beneficiary after you are no longer able to provide the needed care. Among those considerations are the quality of life of the beneficiary and the standard of living of the beneficiary.
Consider:
Who will decide how the funds are spent?
Who will decide what is in your beneficiary’s best interest?
Who will look after your beneficiary’s daily needs?
Who will supervise care and see to it that your beneficiary receives the necessary care?
The quality of your plan will determine the quality of life and the standard of living of your special needs beneficiary.
If your beneficiary is receiving public assistance, planning offers additional challenges in that an inheritance may produce very undesirable results. Two principal concerns arise in planning for a special needs beneficiary who is receiving public assistance.
1. An inheritance passing to a beneficiary who is receiving need-based public assistance would cause the beneficiary to lose that public assistance. Then what?
2. After the inheritance is spent the beneficiary would have to reapply under the rules and regulations in effect at the time of the new application. This scenario leads to unpredictable and possibly undesirable results.
How do you protect your special needs beneficiary and that person’s inheritance?
There are ways to provide appropriate benefits and management for your special needs beneficiary without interrupting his or her public benefits. However, these planning tools are available only to those who invest the time and effort to plan.
No one will do it for you.