GUEST BLOG: Revising wills and trusts a stressful task for many
(Editor's Note: This is part of an ongoing series by family business leaders and advisors with information and ideas about topics unique to family businesses, developed in conjunction with the Conway Center for Family Business.)
By Bea Wolper
Most people care deeply about passing a financial legacy to the next generation, but many don't take simple steps to help make this possible!
A rule of thumb is that a will and trust should be reviewed every five years or whenever major life events occur. Unfortunately, no one wants to do this. Ever.
It is difficult enough to contemplate your own death, but to add the possibility that a loved one could pass before you do is almost too much to bear.
Well-written wills and trusts need to contemplate all scenarios, even ones you don't want to think about. Those are the "what if's" like, "What if I die first? What if you die first? What if something happens to our child? What if…?"
They also contemplate how to care for a loved one who is unable to receive an inheritance because of an illness, trouble keeping track of finances, or another known problem. Without proper planning, the gift you have given could disappear quickly or be too much of a burden for the beneficiary to bear.
A large inheritance can often be the downfall of a recipient for many reasons. A well-crafted will and expertly created trust can ensure next generations have a strong work ethic, such as by providing matching funds to recipients for income they earned, as opposed to a yearly stipend or lump sum gift.
It is said that, "Fair is often not equal and equal is often not fair." Adjustments likely need to be made in wills and trusts to acknowledge that ownership of business interests is not the same as cash. More headaches can come with running a business, so it's a good business practice to make provisions in your trust which may help the business continue.
Keep in mind, your will and trust should make it easier for the executor and trustee, not harder. Anything you can do in advance will help; simple things, like:
- Filling out a personal security checklist, available on the Emens & Wolper Law Firm website at www.emenswolperlaw.com;
- Regularly updating passwords to provide beneficiaries safe but simple access to your accounts and records. (Remember to also update your will and trust with current passwords or the host site may deny access to your executor and trustee.), and
- Preparing a memorandum of personal property you would like to give to specific people.
Updating estate documents may be a little stress for you now, but it could save huge stress for your loved ones.
Bea Wolper is a co-founder of theConway Center for Family Business and a partner in the law firm ofEmens & Wolper LLP, in Columbus, where she focuses on succession planning, estate planning, general corporate law, contracts and the buying and selling of businesses, with an emphasis on family-owned businesses.