Is there such thing as a simple will? Kate Lanman, Esq. recently ran across this issue in doing some estate planning for an elderly woman with three grown children. The client’s estate was small: a few asset management accounts, no house, and almost no personal property. Seems like a simple will was in order, right?
“That’s what I thought,” notes Kate Lanman of Lanman Law LLC, who is both an attoney and a CPA who specializes in elder law and estate planning, with offices in Portland. “I began working on a plan to write her a simple will that would distribute the assets held in accounts to her three grown children and appoint an executor of her estate, mostly for the purpose of avoiding probate when she dies. But after looking more closely I realized that there was a possible loophole in my plan that could result in a situation that the client had not even considered.
Thinking about a simple will
“Think about this: Two of the three children had adult children of their own, and one of the three children was recently married with no children. What if the recently married child decided to have children between now and the time that my client died? That doesn’t create any real problems because the minor grandchildren don’t stand to inherit anything from my client. All of her assets are being distributed to her children. But, what if the recently married child decided to have children and then passed away all before my client died? Then by right of representation the grandchildren could inherit their parent’s share of my client’s estate, and they could still be minors.
“Now, this may not be a problem for my client. But it is something she should consider. Does she want her potential grandchildren to receive a large chunk of cash at the age of three? One of the easiest ways to make sure that no minor children receive a large cash inheritance is to create a contingent trust for any minor beneficiary.
“The complication here is that you really never know what will happen between the time that you draft the will and the time that your client dies. Will there be any minor beneficiaries? No one knows. The conclusion? Any good estate planner should take into account what will happen if minors stand to inherit, and in most cases a well drafted will (even a simple will) should include a contingent trust just in case.”