Kelly Bullis
Every year, I ask clients the status of their estate documents. Do they have them and/or are they current and up to date? I like to put a reminder in their tax letter, too. So let me ask you, “What is the status of your estate documents?”
At a minimum, you should have a will. Having no will is just being plain cruel to your loved ones. The mess left behind when you die without a will is ugly, intrusive, costly, time-consuming, and public.
Do you have a trust? You should. By having a properly setup trust, you avoid the publicity of just a will, and are able to direct disbursement of your estate in a more orderly and drawn out fashion. If you leave a large sum of money to a young person, odds are they will blow it and have little or nothing to show for it. If, instead, via a trust instrument, you give out some at each life event, your inheritance will go much further.
Do any of your kids have a rotten spouse? Giving your child your inheritance outright, in a community property state like Nevada, more than likely means that rotten spouse gets half immediately. By leaving your inheritance in a trust, your child retains 100% control and ownership without the rotten spouse getting anything.
Do you have a “black sheep” child? Controlling their inheritance with behavior stipulations in a trust is the more loving thing to do rather than give them everything all at once to blow on drugs, etc.
What about a Power of Attorney? For medical purposes and a different one for financial purposes. If you are temporarily incapacitated, you need somebody you trust to make medical and/or financial decisions on your behalf. For doctors, lawyers, courts, banks, etc., to accept actions on your behalf, your designated person must have the legal document giving you the right and authority to act. That is what a Power of Attorney does.
Here is one thing to consider that every parent needs to stop and think about. Where will your underage kids go if all parents were to suddenly die, like in a car accident? No will, the state will put them in foster care. They most likely will not even be kept together. Just stop and think how traumatic that would be to a child. Losing their parents, being place in a strange home, split up and away from other siblings.
How do you prevent this? Have a will and name the legal guardians of your children should you die. Talk to your friends and family to find the right folks who are will and able to take on the responsibility of raising your children the way you would. You might want to appoint a different family member to administer the inheritance on behalf of your children if you worry that the legal guardians would not use the funds wisely.
I strongly suggest you hire a good attorney to assist you in the writing of all these estate documents. Legal Zoom is not a good answer. You need customization, tailoring, etc. to your unique situations.
Have you heard? Prov 13:22 says, “A good man leaves an inheritance to his children’s children, but the wealth of the sinner is stored for the righteous.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com. Also on Facebook.