The most common will is one involving a married couple that says all to the surviving spouse and then equally to our children. Those wills have severe flaws. The first is that the surviving spouse, upon receiving the assets, has the full right to re-gift them how they wish. You might not imagine that your spouse, upon your death, might not decide to leave your property to your chosen beneficiaries, but something that’s incredibly common is remarriage.
You might think you’re too old to be remarried, but 65% of people who become single after age 65 get remarried. Remarriage is very common and not to plan for this common event is not effective planning, but the simple will does not do that. We prefer to do a planning where the decedent’s spouse’s assets go into a trust that guarantees those assets goes to their chosen beneficiaries is their children. The surviving spouse may need to use and live on those assets, but they cannot re-gift them.
Second, the simple will simply leaves assets to the beneficiaries usually without any sort of additional protection. This is missing a real opportunity. When we gift someone’s assets, either during our life or upon death, if we use a properly drafted trust, we can provide so many protections for those assets to help the person in case they become incapacitated and need medical assistance like Medicaid, or they have creditor problems even now or something that arises in the future. Because we do not know what the future will hold, to fail to plan to give our beneficiaries these options, we believe is negligent.
So we encourage the creation of trusts, either in a will or in a continued revocable living trust, that provide these vital protections to your beneficiaries. Without such planning, the simple will will often find the assets of the estate dissipated to the beneficiaries’ creditors or they have to be spent before the beneficiary can qualify or requalify for government assistance like Medicaid. So regardless whether you use a will or a revocable living trust, we want to build robust trusts that continue for your spouse and/or your other beneficiaries to give them the most flexibility and options with the assets while protecting those assets from creditors and nursing homes.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.
