Creating a last will and testament is not complicated or expensive. You can even write your own will. But does it make sense legally? It’s crucial to devise a will if you have any assets such as a home, bank accounts, or any children. Writing your will protects your loved ones’ future. However, what you should never put in your will includes many items! Let’s look at what is best left out of a last will and testament.
Your will is crucial to prepare loved ones for the unexpected and prevents intestate law from determining inheritances. But be careful if you obtain a DIY will online. Consider assets carefully before leaving them in your will.
Disabled or Special Needs Bequests
What you should never put in your will includes a lump sum inheritance for a disabled or special needs family member.
If you have a family member who is disabled in some way and receives government benefits, it is seldom in their best interests to leave them assets in your will. Anyone who depends on the eligibility of government benefits may become disqualified if you leave them assets.
Leaving assets to someone, not your spouse, who is age 65 or older, blind, or disabled can make them ineligible for health insurance, transportation, and room and board benefits until they spend down the endowment you leave. Once they’ve used up the legacy on their daily needs, they may become eligible again for benefits.
Instead of leaving a special needs person assets in your will, make a special needs or 3rd party trust to leave assets to them. A trust holds assets for them in a way that does not count against their eligibility for benefits.
Jointly Owned Assets & Beneficiary Accounts
A retirement account or life insurance policy always has a named beneficiary who will receive ownership of the account immediately upon your death. Naming someone in your will for these types of accounts is unnecessary.
If you name one person in your will and another on the account, you may cause arguments about who is supposed to receive the inheritance. The individual named as beneficiary legally inherits the total account assets.
If you own property, such as a home, jointly with a spouse or child who has the right of survivorship, the property automatically goes to them upon your death. If one person is your co-owner with right-of-survivorship, naming someone else in your will may harm your family’s harmony.
Including beneficiary accounts and real estate owned jointly in your will is unnecessary at best and can even be harmful to your family.
For example, let’s say in your will, you leave your home to your daughter, Anita. In your mind, you think that you will die, and then when your wife passes away later, Anita will inherit the home. It makes sense to think that way, but that is not how the law works.
In the above example, your executor will read your will to your family after your death. Your daughter Anita will hear that she inherits the home. However, Anita does not inherit the home at that point. Your wife now owns the home. It is now your wife’s choice who to name as heir for the home.
Your wife may leave the home to another daughter who cares for her in later years. When the executor reads your wife’s last will and testament to family, the home goes to Carol, the other daughter. Anita is understandably upset because she thought the home would be hers.
Misunderstandings can tear families apart. You can prevent family discord by consulting with an attorney while writing your will to ensure that you’ve thought through co-owned property issues and beneficiary accounts before writing your will.
Assets Owned in Trust
A trust bypasses the will that you write. Trusts don’t go through probate court to be distributed by the dictates of a will. Trusts never go before a public audience in a courtroom.
Instead, your named trustee distributes the trust’s assets according to the trust’s terms. So if you opened a special needs trust for a son who is mentally and physically disabled, the assets you’ve placed in the trust will go to him at the times and in the amounts that the trust terms dictate. Your named trustee will distribute the assets to this son as the trust framework allows.
Because it is a special needs trust, there will likely be distributions to your son each month in amounts that do not make him ineligible for government assistance in the form of health insurance, room and board, and transportation. The trust terms you decided before your death may also allow the trustee to buy medical devices, pay for his educational expenses, or buy a gift for him at certain times of each year.
Other types of trusts operate in other ways, but no trust assets distribute to heirs through the dictates of your will.
Guns
If you leave guns to someone in a will, all of those guns will pass through a public court process called probate. Probate includes an inventory of all assets in your estate. Every weapon is assessed for value by the executor of your will and listed in your estate’s possessions. The probate process lists your assets in the public record of the estate’s inventory.
However, if you place guns into a trust, there is no need to put them in your will. No one will know about your guns other than those you tell. Guns placed into a trust do not pass through public probate processes and do not need to be included in your will.
Probate court does not interfere with trust assets. A trust’s assets continue to be managed by the named trustee after your death.
By opening a gun trust, you may also pass on registered NFA guns. The trust gives heirs time to accomplish the required tasks to lawfully assume ownership of the weapon. Your heir may receive the gun from the trust by:
- Acting as a co-trustee for the trust while you are still living (you may legally share NFA registered guns this way)
- Inheriting through a distribution of the trust after your death
A gun trust can also help your loved ones if you are declared by a doctor to be incapacitated, incompetent, or mentally ill. If this happens to you, you may no longer legally own firearms. Your guns could fall into the wrong hands and your loved ones face legal trouble. With a gun trust, you have a plan in place for your weapons so that they don’t fall into irresponsible hands.
Keeping your guns safe in trust protects your family and gives you peace of mind. There is no need to include any trust assets in the writing of your last will and testament.
We Can Help
Whether you need help creating your last will and testament or drawing up and funding a trust, we are here for all of your legal needs in the greater Fayetteville area. Our estate planning attorneys at Cape Fear Law help you and your family prepare for the future and whatever may come next. Our attention to the legal details of your documents prevent misunderstandings and discord in your family’s future. We ensure your estate plan includes everything you need to keep your loved ones cared for and safe.
Contact us today to get started making your plans with a free initial consultation.