What’s in a Will
I was at an event when a couple came up to me. “May we joint you for a minute? We’d like to ask you some questions, and we heard you are an attorney.”
“Certainly. Please have a seat,” I replied.
“We’re thinking about making an appointment to have a Will made”, they said.
“Good idea”, I replied.
“What we’d like to know”, they continued, “is what we should think about putting in our Wills.”
“Let me ask you some questions first”, I said.
“Do you have any children, and, if so, how old are they?”
“We each have two children by prior marriages”, he said. “All four are now teenagers.”
“We also have two of our own”, she added proudly, “ages six and two.”
“Second question. Who’s got custody of the children from your prior marriages?”
“I’ve got custody of my two”, she replied. “But that witchy ex-wife of his has custody of his two”, she quickly added.
“Third question”, I said. “Adding up all of your assets, including the amount of money which you’ll receive from life insurance, and the full value of all jointly owned property, how much would you say that it’s all worth?”
“About a million dollars, if you include life insurance and the full value of the house,” they said.
“OK. Then let’s take care of some preliminary matters before we get into what you should think about in regard to your Will.
“First, you’re not subject to Federal Estate Tax. Under new law, the Federal
Estate Tax begins at estates worth five million dollars. That’s not you.
“Secondly, Michigan abolished the Inheritance Tax in 1993. So, unlike Indiana which still has the Inheritance Tax, you don’t have to worry about that, either.
“If you were worth more than five million, then your Will could be used for estate tax planning to minimize the Estate Tax which begins at 40%, effective January 3, 2013.
“I presume that you want to leave everything to each other. Is that right?”
“That’s right” they both quickly said.
“But the problem comes with your kids. You need to know that, if you both die before the kids turn eighteen, then, unless you say differently in your Will, the kids’ parents from your prior marriages will have priority to administer your children’s money as their Conservator. As for your two kids together, if the older kids reach age eighteen, then adult siblings would have priority as both their Conservator and as their Guardian.”
“We’ll think of something!” she flared. “There’s no way that “witch” is going to get her hands on any of our money!”
“While you’re thinking about that, you should also consider who you do want to both administer all of the money and to take care of your own two children as their Guardians.
“You should also think about how old the kids should be when they receive their money.
“Under the law, they’re each entitled to their share when they turn eighteen. You can postpone that for three years, until they turn twenty-one, if you name a “Custodian” under the Uniform Gift to Minors Act. But, if you want to wait beyond age twenty-one, then you’ll want to consider a testamentary trust in your Will to postpone distribution until the age which you specify. That trust could also provide payment for your children’s college education, without giving them other access to your money.
“A critical decision in all of these matters are the people whom you will name. Who will be the Personal Representative of your Estate, who will be the Guardian of your minor children, and who will administer any Trust, or otherwise be responsible for your children’s money, before the distribution to them?
“After all of those decisions, you will need to consider whether you want to give any money to your church or favorite charity, and, if so, how much. You may also make specific burial instructions, such as where you want to be buried, whether you want to be cremated instead of burial, and which church will perform the funeral services.”
“That’s a lot to think about”, he said. “We appreciate your time. When we’ve made up our minds, we’ll call our own lawyer for our Wills. Bye Bye.”