In an ideal world, our family lives would always be harmonious. If that were the case, then our Estate Plans would be easy to put together: all our heirs would share alike in the benefits, and there would be no recriminations, disputes, or bad feelings. And if we became seriously incapacitated, our family members would happily step forward and cooperate in taking care of us.
Unfortunately, while that does happen in some families, that is not the case in others. Children can become estranged from their parents, and siblings can become estranged from one another. Maybe some children are financially successful, while others are less so. One may have good money management skills, and another not so much. And things can get additionally complicated in blended family relationships that involve divorce, step-siblings, half-siblings, and mixed ownership of assets that may be governed by laws about community property, separate property, or common law ownership.
All of these situations can affect how you want to structure your Estate Plan, and, in order to avoid problems and further discord, you might not want to share your Estate Plan with any or all of your family members. Can you do this? Basically, the answer is yes. But there will be a few things that will end up being disclosed to others, and even some things that it would be wiser to share with others, to make sure that what you want to happen in your Estate Plan gets carried out.
What Parts of My Estate Plan Can Remain Private?
An Estate Plan will usually include several documents, including a Will, one or more Trusts, a durable power of attorney for financial and/or medical decisions, and an advance healthcare directive. Your Estate Plan can also include things like 401(k) plans, pensions, IRAs, and life insurance.
For vehicles like life insurance and pension plans, the beneficiaries are named on the documents themselves, and they pretty much operate independently once you set them up, subject to a few notification rules. For example, if you are married, your spouse must be a beneficiary on the 401(k) plan unless your spouse waives that right. Subject to these rules, you need not inform anyone about your beneficiary decisions.
For a Will, it can remain completely private while you are alive, but you should make a few exceptions: you should notify the person(s) whom you name as executor or executors (and even contingent executors). You will want to talk to and obtain assent from whomever you select, as this responsibility can be burdensome, particularly if your estate is complicated. It can be even more burdensome if you believe that some family members will be unhappy with the contents of the Will.
Once you die, if your Will goes through the probate process, it will become a public document, and this cannot be avoided. Thus, you should be aware that devising your estate through a Will, rather than a Trust, will mean that parts of your Estate Plan will not be private – to family members or to anyone else.
You should let your estate attorney know of any family problems so that the attorney drafting your Estate Plan takes care to add language that can protect your estate plan from legal challenges. For a Will, this can help your estate and your executor avoid a long and costly probate process. The more you share with an executor that you trust, the more likely it will be that the wishes expressed in your Will will be carried out in the way that you want.
One good way to avoid probate problems and to keep your Estate Plan private is to manage most of your estate through a Trust or multiple Trusts. But in order to have a Trust, you have to name a trustee or trustees, as well as contingent or successor trustees. Again, you will want to obtain the agreement of these trustees to undertake this legal duty, and explain to them their responsibilities, so you will not be able to keep this information entirely private.
The same is true for designating individuals to exercise powers of attorney (POA). You should involve your designated POAs in setting up these documents so that they fully understand what their responsibilities will be should they have to exercise this power, whether they are family members or not.
When you choose someone to act as POA, make it clear to that person why you are choosing them, and what your expectations are. Unfortunately, particularly in situations involving POAs for financial matters, some families may try to take advantage of you if you become incapacitated – such as if you become aged and suffer from dementia – to improperly obtain property or funds. Among other things, your POA’s duty is to prevent that. You have a right to set up an Estate Plan that protects your interests, and involving your designated agents in the process and sharing your thinking with them will be the wiser course.
Set Up an Estate Plan that Suits Your Needs
When it comes to your estate, it is true that you cannot “take it with you,” but you can at least make sure it is used how you want it to be used, even if it may ruffle the feathers of some of your family. The way to do that is by setting up a comprehensive Estate Plan.
While you get to make all the decisions, the fact is, other people will ultimately have to be involved in making sure your plans are carried out. It will be in your best interests to share necessary information with people you trust and make sure the people you involve are willing and able to follow through on what you want to happen.
For more information about how you can structure your estate, contact the estate attorneys at eLegacy today. We will help you craft a plan that addresses all your concerns, including ways to protect your interests if you anticipate hard feelings or legal action from family members regarding your estate decisions.