Estate Planning Basics: September 2007 Archives

September 18, 2007

Helmsley Dog's Trust Fund Could Be Trouble

If you've been near a newspaper lately, you probably know that Leona Helmsley, famed luxury hotel owner and so-called "Queen of Mean," left $12 million in trust for her little dog Trouble. Her chauffeur got $100,000. Two of her grandchildren got zero.

We all love to read about the crazy wishes of the ultra-rich. (Or the rich wishes of the ultra-crazy, as the case may be.) But are there possibly any lessons for the rest of us in the tale of millions left to a Maltese?

Maybe. First, don't make any gift in your will that's likely to provoke a court challenge from disgruntled relatives or other beneficiaries. Generally, you can do what you want in your will. You don't have to leave anything to your grown children, for example, if you don't want to. But if you make a gift that's excessive for accomplishing its purpose--for instance, a trust fund for a pet that's far, far larger than anything necessary to take fabulous care of the animal--other beneficiaries are likely to challenge it, and a judge may cut down the amount. (If that happens, the extra money would probably go to certain other beneficiaries named in the will.)

Second, wills are public documents. Don't put anything in them that you wouldn't mind the world knowing. Just ask the Hemsleys: As soon as Leona Helmsley's will was filed with the court after her death, it appeared online for everyone to see.

Mary Randolph

September 17, 2007

Picking a Guardian for Children: Why It's So Hard

Recently a parent at my child's school talked to me about making her will--or rather, not making it. She knows she ought to, but she and her husband got stuck when it came to naming a guardian for their two kids. "His family is better with money," she told me, "but mine is more fun!"

A lot of parents can't get over this stumbling block, and as a result they don't have wills. And if something did happen to them and their kids needed a guardian, a judge would have no clue about who they would have wanted to take on the job.

The best advice I can give is to just name somebody--you can always change it later. But don't leave such an important decision up to a judge who doesn't know a thing about you or your family. Attorney (and mom) Liza Hanks has a great discussion of how to overcome common problems in her book The Busy Family's Guide to Estate Planning.

Mary Randolph

September 14, 2007

Don't Forget Your E-Things

When you're putting together your estate plan, don't forget to pass on the login names and passwords to your online accounts. Loved ones may need access to them when you're gone.

If you bank online, use online stock brokers, or if you conduct other business online -- maybe through eBay or PayPal -- your loved ones or your executor will need to close those accounts and distribute any remaining funds. Leaving clear access will make that job much easier.

Your loved ones may also want to retrieve contacts from your email account, preserve photos from your online photo library, or post a final entry onto your blog.

Accessing online accounts without the password can prove difficult, if not impossible. In an article for the Wall Street Journal, Katherine Roseman reports that each internet site makes its own rules about providing a deceased's account information. For example, to access a Gmail account, Google requires proof of death and provides access only to an estate administrator, while facebook won't provide account access at all but will put the account in a "memorial state."

You don't need a fancy document to leave this information. Just make a list of important accounts and store it with your other estate planning documents. For more information, see Nolo's article Help Your Executor: Secured Places and Passwords.

Betsy Simmons

September 11, 2007

When to Stop Procrastinating and Make That Estate Plan

While some people may not be ready for an estate plan, others need one yesterday. And lots of us fall somewhere in between no need and urgent need.

Here are ten situations in which you need some kind of estate plan. They're listed in decreasing urgency from "you need an estate plan, now" to "you know, should really think about making an estate plan."

  1. You have an untraditional family structure. For example, you and your partner aren't married or your partner is not your child's other legal parent. Make arrangements to protect your partner and your children, ASAP.

  2. You do not want the bulk of your property to go to your closest relative. Write a will or trust.

  3. You have a child with special needs who relies on government benefits. Set up a special needs trust to supplement income, without risking eligibility for government benefits.

  4. You are close to the end of your life, either because of age or illness. Now is the time make your wishes known, with a health care directive and a will or trust.

  5. You want to name a guardian who will care for your child if both you and the child's other parent cannot. Write a will.

  6. You have a large estate (more than $2 million). Your estate will be subject to estate tax. Careful planning may allow your estate to avoid or delay paying that tax.

  7. You have specific wishes about the health care you would receive if you become unable to make health care decisions for yourself. Make a health care directive to make your wishes known to your family and to your caregivers.

  8. You want to determine what happens to your body after you die. Consider making final arrangements so that your love ones can honor your wishes.

  9. You want certain items of your property to go to specific people. Write a will, otherwise your property will be distributed according to the laws of your state.

  10. You're not rich, but you own a few high-value items. Consider writing a will to distribute your property.

Betsy Simmons

September 9, 2007

Can You Put Off Making an Estate Plan?

Most people know that it's a good idea to have an estate plan. But estate planning is rarely high on one's list of things to do, so what most people really want to know is at what point to you really have to make one? For some the need is more urgent than for others.

How badly you need an estate plan depends on a number of circumstances in your life. These include: your marital status, how much stuff you have, if you have kids or other dependents, and if you care about what medical care you receive if you're incapacitated.

You don't really need an estate plan at all if:

  • you're youngish and healthy

  • you don't have much property

  • you're okay with how the state will distribute your property if you die with out a will

  • you have no children, AND

  • you're not concerned with what medical care you will receive if you're incapacitated or what will happen to your body when you die.

That said, there are some good reasons to make a will sooner than later. Check out my next blog post.

Betsy Simmons

September 5, 2007

Do You Want Your Closest Relative to Inherit Your Property?

If you die without an estate plan that distributes your property, your property will be distributed according to the laws of your state. Those "intestacy" laws give your property to your closest living relative. But who is that? Each state has come up with its own schema for determining the closest living relative. Much of the time, the laws might work the way you want them to. For example, all states give your estate to your spouse and children first. (The share that each child or spouse receives differs according to number of children and whether or not your spouse is your children's parent. This formula differs from state to state.) Under intestacy laws, more distant relatives, such as your cousins, would only get your estate if you had no other closer living relative. So that makes sense too. But sometimes your state's choice for "closest living relative" might not be the person you want to inherit your estate. For example, what if the state identifies your father as your closest relative, but you haven't had a relationship with him since you were a child? Or what if your closest living relative cannot be trusted with your property because of addiction or mental illness? In these situations, the person who would get your property is surely not the person you would choose to give it to. The bottom line is while intestacy laws will work as an acceptable fall back in some situations, it's best not to let your state decide who is your closest relative. You're better off coming up with your own plan. If you want to know more about the intestacy laws in your state, check out For legal geeks (like us) who love this stuff, the site even has intestacy calculators that tell you how your state will divide your property if you die without an estate plan. It will estimate your federal estate taxes too... pretty cool!

And, if you'd like to create your own custom estate plan, check out Nolo's bestselling Quicken WillMaker Plus.

Betsy Simmons