Estate Planning Do’s and Don’ts

By Maurice L. Offit, Principal

July 27, 2011

Family Wars

After the death of the surviving spouse, it is time to divide the household items, many of which have been in the family for decades. While not of great financial value, the sentimental value of “things” are for some, beyond measure. Our experience is that far more than over money, family members argue about the distribution of the belongings and the rifts can last a lifetime.

DO: Be specific in your will as to each item and who is to inherit. The time you spend in compiling this list is well worth it, considering the arguments that are likely to ensure when no specifics as to recipient are given. If you feel comfortable, it is wise to discuss the distribution with your potential heirs before the need arises, further reducing the likelihood of conflict at time of distribution.

OR: Give the items away during your lifetime. The later has the additional benefit of sharing in the enjoyment family members take in your gift and reducing your taxable estate.

Catch 22: Where Should You Put Your Will

Most people put their will in a safe deposit box at the bank with themselves listed as the sole person with right to entry. The good news: no one else can get in. The bad news: no one else can get in. The estate cannot be opened without the will. An executor could open the box, but he will not know if he is the executor until he gets into the box to read the will…which he cannot open. There is a procedure to get the needed court approval to open the box, but this is a nuisance and expensive because the time of attorneys is involved.

DO: Be sure to include another name, besides yours, on the signature card at the bank.

Estate Planning For Pets

For many, their pets are their children and a key concern is therefore, “Who will take care of my pet if I am unable, due to death or disability?” Many make informal arrangements, but there is no way to ensure that such arrangements will be honored. A far better way to make certain that the pet will be cared for as intended is to provide for them in formal legal estate planning documents. In these, the owner will clearly state

who they intend to get custody,
how they want the pet to be cared for and
financial assets that have been provided for that care.

As of 2009,  Maryland joins 38 other states and DC in allowing Pet Trusts. There are honorary, statutory and traditional, each of which has pros and cons. Considered personal property, a pet cannot be a beneficiary under a will or trust but a Pet Trust will ensure that the benefactor’s wishes are met, just as would be true in the case of minor children.

DO: Look into ways to ensure that your pets will be cared for by whom you want in the way you want by “formally” providing for them in estate planning documents.

What’s Your Password?

We live in an electronic age. Many take extensive time to organize their financial data in files on their computer, but forget to take a few minutes to make a simple list of the passwords. Hence, when they die or are disabled, the data is inaccessible as no one else can retrieve it.

DO: Be sure to keep a list of your passwords and let someone you trust know where it is.