If you are planning your estate and writing your last will and testament instead of using a Trust, the last thing you want to worry about is who might try to attack your estate when you are no longer around to defend it. However, if you are not careful, the distribution of your estate can become a massive debacle as family members and creditors all fight for a piece of the pie. If you decide to use a will instead of a Trust to distribute your estate, here are five ways you can use your will to protect your estate from this kind of chaos:
- Keep your will up to date
- The simplest way of protecting yourself with your will is to make sure it is up to date and distributes all your substantial property. This includes any homes or vehicles you may own, any bank accounts in your name, your investment portfolio, and any other property of significant value you possess. By making sure your will is current, you can avoid intestacy, where any property you did not grant to someone else is instead distributed according to a state statute. You can also make sure to remove any property you no longer own from any previous versions of your will, preventing chaos when, for example, someone finds out the house they were supposed to inherit was sold ten years ago.
- Do not be afraid to disinherit
- It is an uncomfortable subject, but sometimes there are people in our families who we simply do not like and do not want to inherit from us. However, if any property falls into intestacy, that family member you do not like may inherit from you anyway, thanks to the mechanisms of the intestacy statute. The way to prevent this is to disinherit them, essentially stating that you do not want that person to inherit from you under any circumstances. It is a harsh thing to do, but chances are if you are even considering disinheriting someone, excluding them from your will is unlikely to sour your relationship with them any worse than it already was.
- Establish a testamentary trust
- When you write your last will and testament, one of the things you can do is place some or all your assets in a trust after you die. In this “testamentary trust,” whoever becomes the trustee of that trust will be tasked with ensuring the property within is distributed according to your wishes. This differs from the normal distribution of property from a will because property in a trust may be exempted from certain taxes, and may protect you from creditors who might want to use your estate to satisfy any outstanding debts you had when you died. This makes a testamentary trust useful for keeping your estate safe for your heirs. Always speak with an accountant about the effect of taxes on your estate.
- Include a residuary clause
- Even if you do everything right and are diligent about keeping your will complete and up to date, there is still a possibility that you will obtain significant money or property between when you last updated your will and when you die. For this possibility, you may wish to designate someone as a residuary beneficiary, using something known as a residuary clause. In effect, the residuary beneficiary receives any money or property in your estate that is not bequeathed to someone else, preventing any unallocated property from falling into intestacy.
- Consider a no-contest clause
- It would be nice if every family got along, but even the closest families can fight, especially when there is an inheritance on the line. And often, when someone does not get what they were expecting under a will, they will go to court to try to contest the will, in hopes of invalidating it. A no-contest clause, also known as an in terrorem clause, prevents this by disinheriting anyone who attempts to contest the will and fails. While it will not stop all litigation, a no-contest clause can at least make your more litigious family members think twice about dragging your family members into a lawsuit over your estate.
Whether for yourself or on behalf of a loved one, planning an estate and handling elder law matters can be overwhelming and emotionally taxing. The legal professionals at Hobson-Williams P.C. will advise you on the options available to you, and help you establish a plan that best suits your needs. Call (718) 210-4744 or visit our contact page to speak to one of our attorneys and learn how Hobson-Williams P.C. can help you gain the peace of mind that comes from being prepared for the future.
