Author Archives: Megan Amelung

Pitfalls of Online Will Creation Programs

It is tempting to use an online will creation program for creating your Last Will and Testament.  There are a few programs out there and they will tell you that the Last Will and Testament created is as good as one written by an attorney and for a much cheaper price.  However, the quality of the Last Will and Testament created through those programs is, more likely than not, insufficient. Some of the benefits of working with an attorney are as follows:

Knowledge:  One of the benefits on working with an attorney to create your Last Will and Testament is that you gain access to the attorney’s knowledge.  Her knowledge of the local law, the politics of the court, and her experience and expertise.  This knowledge helps you understand how the laws and cases will interpret your words once you are gone.  Without this, the intent behind your words may be lost and in the end not followed.  The online programs do not provide you with this kind of knowledge.  They provide a generic understanding at best.

Validity:  Working with an attorney will help ensure that your Last Will and Testament is executed correctly so that it is valid.  An incorrectly executed Last Will and Testament is not valid and regardless of your wishes, the court will not honor it at time of its submission to probate.  An online program will not ensure that you correctly execute your will.

Records:  Attorneys will keep your original Last Will and Testament in some cases or return it to you for safekeeping.  If the original is returned to you for safekeeping, the attorney will keep a copy of it.  If the original Last Will and Testament is lost, then the attorney’s copy will become very important at probate or if you want to see what the Last Will and Testament says.  Additionally, if the Last Will and Testament is contested the records kept about your conversations with the attorney, capacity, and why you made the decisions is important.  There are specific situations like disinheritance that really need attorney knowledge and documentation.  The online programs do not keep these kind of records.

Complicated Estates:  Most people think that their estate is not complicated; however, most actually are.  Your estate is complicated if you(r)

  • have children that are not the children of your spouse,
  • spouse has children that are not your children,
  • want to define “child” as more than the traditional definition of “child”,
  • have assets with transfer on death or payable on death designations,
  • have minor children or beneficiaries,
  • have special needs children or beneficiaries,
  • have or want a trust,
  • estate is large enough that tax planning should occur (in Oregon that is only $1 Million),
  • own a small business,
  • are divorced, or
  • have very specific or extensive plans for property or money to be inherited.

If your situation does not fall within one of the ones listed above, that does not mean it is not complicated.  A Last Will and Testament is an extremely important document and you want to get it right.  Consulting with an attorney and making sure it adequately represents your goals is priceless.

Modifications:  A Last Will and Testament only represents your wishes at the time it is drafted.  It does not usually have provisions for what happens after you draft it.  Therefore, if your situation changes, like you have a child, get married, get divorced, open a small business, inherit property/money from someone, a beneficiary or person appointed to be a representative predeceases you, or your financial situation changes, you need to revisit your will.  Some modifications can be made with a codicil.  Sometimes a new Last Will and Testament needs to be completed.  Modifications on the document itself can result in unexpected results and should not be done unless the results are explained to you by an attorney.

Cost:  While choosing to use an online will creation program might seem like a cost effective way to create your Last Will and Testament, it is not a good idea in the vast majority of situations.  Nothing supplants the value an attorney adds to the process.  The old adage stands – You get what you pay for.  Creating a Last Will and Testament that does not accurately represent your goals is actually more costly in the end because either you will have to pay an attorney to redraft your Last Will and Testament or your personal representative will have to deal with the results after you have passed away which could lead to cumbersome and expensive litigation.  The matters dealt with in a Last Will and Testament are too important to leave to an impersonal online will creation program.

If you are looking to create your estate plan, please give me a call.  I would love to help you navigate these choices with you so that you have an estate plan that accomplishes your goals.

I consider my step-child to be my own. How do I provide for her in my will?

Many stepparents consider their stepchildren to be their own.  When this is the case, it is very important to consider how to draft your estate plan to ensure that your stepchild is treated like any other children you may have.  There are a few ways to do this.

First – you could have an attorney draft a will and/or a trust and include your stepchild as a beneficiary.  This will take a specific definition of “child” in your estate plan.  This would not give the stepparent the right to make decisions for the child.

Second – you could complete a stepparent adoption.  This process would terminate the rights of the biological parent and the stepparent would become that child’s parent and the spouse.  This could be a great option when the biological parent has been absent and the stepparent has been acting in that parent’s role. This would also give the stepparent the right to make decisions for the child like medical and educational.  If the stepchild has a relationship with the biological parent or does not want to be adopted, this would not be a very good option.

If you do nothing and pass away without a will or trust, the stepchild will not inherit anything through the intestate process.  Even if you have instructed others to provide for this stepchild outside of probate, there is no way to confirm that those people will actually follow your wishes; therefore, drafting your estate plan to reflect your wishes and desires is the only way to adequately accomplish your goals.

I would love to discuss your goals with you.

Children After Executing Will (Pretermitted children)

Congratulations!  You have done two amazing things – you brought a wonderful child into your life and you planned for the future by creating and signing a will.  Now you are wondering if you need to do a new will and what happens if you don’t.  These are great questions.

First, you should do a new will because it makes everything simpler.   If you executed your first will prior to having any children, the new will might have quite a few more considerations for you to make.  For example, you might want to consider what happens if your child was to inherit money before reaching a certain age (you pick the age) and how much he or she would receive.  You now are probably considering how you are going to pay for college and obtaining financial assistance.  Importantly, you are now thinking about the idea of who should take care of your child if you were unable to before that child reaches adulthood.  No one likes to think about this and it is a reason why many do not complete their estate planning, but it is important to take the time to make difficult choices and doing so will bring you a piece of mind.

Second, if you do not create a new will, there are statutory procedures that will step in for children born, adopted, or conceived after execution of the will and not provided for or mentioned in the will and survives the testator (person making the will).  These children are called pretermitted children.  In Oregon, the following happens based upon situation:

1.  If a testator has one or more children living when the testator executes a will and no provision is made in the will for the living children, a pretermitted child shall not take a share of the estate of the testator disposed of by the will.

Ex: Fred has one living child, Greg, when he executes his will, but does not provide for Greg because Greg is the beneficiary of his financial accounts.  A few years later, Fred has one more child, Hannah.  He never amends his will to include Hannah or make reference that he has provided for Greg outside the will.  After Fred passes, Hannah will not inherit from Fred and Greg will inherit the financial accounts outside of probate.

2.  If a testator has one or more children living when the testator executes a will and provision is made in the will for one or more of the living children, a pretermitted child is entitled to share in the estate of the testator disposed of by the will as follows:

  • The pretermitted child may share only in the portion of the estate devised to the living children by the will.
  • The share of each pretermitted child shall be the total value of the portion of the estate devised to the living children by the will divided by the number of pretermitted children plus the number of living children for whom provision, other than nominal provision, is made in the will.
  • To the extent feasible, the interest of a pretermitted child in the estate is of the same character, whether equitable or legal, as the interest the testator gave to the living children by the will.

Ex: Fred has one living child, Greg, when he executes his will and he provides that Greg is to receive one-half of his estate, the remainder to Anna, Fred’s wife and mother of Greg.  A few years later, Fred and Anna have one more child, Hannah.  He never amends his will to include Hannah.  After Fred passes, Hannah and Greg will each receive 1/4 of the estate and Anna will receive the remaining 1/2 of the estate.

3.  If a testator has no child living when the testator executes a will, a pretermitted child shall take a share of the estate as though the testator had died intestate, unless the will devised all or substantially all of the estate to the other parent of the pretermitted child and that other parent survives the testator and is entitled to take under the will.

Ex: Fred has no children when he executes his will providing the entire estate to Anna, his wife.  Fred then has a child, Greg, in an affair with his physical therapist, Lyla.  Paternity is established.  Anna graciously forgives him and requires him to find a new physical therapist.  A few years later, Fred and Anna have one child, Hannah.  He never amends his will to include Greg or Hannah.  After Fred passes, Greg would receive 1/2 of the estate (his intestate share) and Anna receives the remaining 1/2 of the estate.  Hannah would not take under the will because the will devised all of the estate to her mother and Anna survived Fred.

As you can tell, life gets messy and the examples above are just a few of the situations that can happen.  Therefore, when your family changes, it is best to revisit your estate plan, consult with a qualified attorney, and make sure it is what you want.

Should I do a POD or TOD on my accounts?

Many people hold financial accounts that have payable on death (POD) or transfer on death (TOD) designations where you can select who gets the account upon your passing.  The question that arises is should you use them?  The answer is maybe or maybe not.

A POD and TOD can be a great tool to distribute financial assets upon your death.  Accounts such as life insurance policies, bank accounts, brokerage accounts, and retirement accounts have such options. If you use the POD or TOD option, that asset will be distributed outside of your will, trust, and probate process.  This means that your beneficiary can quickly get this asset by providing your death certificate and completing a form provided by the financial company.  If your plan is to avoid probate and the rest of your assets are owned by a trust, this could be a great option.  This is also a good option to provide assets to someone outside of probate.  Some people will choose to provide for one child through a POD or TOD and specifically not provide for that child in his or her will. This can be helpful if that child would need quick funds upon your passing and it would be unfair to also provide for him or her in the will based upon an equal distribution.

While this sounds like a great option, using PODs and TODs for all of your financial assets posses a problem if your estate is submitted for probate.  Recently, my family ran into this issue with my grandfather’s estate in Iowa.  All of his financial assets had PODs, which was great for my mom and her two sisters, but it left the estate cash poor.  There was no liquidity in the other assets and my aunt, the personal representative of the estate, was required to loan the estate money in order to pay for my grandfather’s estate’s expense such as preparing the house for sale, the bond premium, and utilities.  Fortunately, my aunt had the funds to do this, but some families do not have this option.  It is better to leave at least one account without a POD or TOD designation.  This means that the asset will be included in your probate estate, but it also provides the necessary liquidity for the estate to pay for the expenses that arise through out the probate process.

It is very important that when you are preparing a POD and TOD designation, you use an experienced estate attorney to coordinate your estate plan so that every thing runs smoothly for your family upon your death.

Do I need a Will?

A will is an essential document for every adult.  A will provides direction for what to do with your items after you pass.  You can decide who is in charge of your estate, who gets your prized possessions, which charity should get the remainder of your belongings, or how to divide monetary assets.  Wills can create trusts so that you are able to provide for the care of your minor children or pets.  Wills can also create trusts so that money inherited is protected from overspending.  A will can let you do almost anything with your assets.  The best thing about a will is that it gives you a chance to make these decisions for yourself and is private until your passing.  This means that you can make the decisions that are right for you and your family without the concern of a family member being unhappy with you.

A will will not stop your estate from going through the probate process.  Your estate will go through probate unless you have no assets that need to be passed with court supervision.  This can be accomplished with a trust established during your lifetime.  The assets must be transferred into the trust and titled in the name of the trust.  Other assets pass outside of probate because they have payable on death beneficiaries or transfer on death beneficiaries or are held with rights of survivorship.  If your assets are not titled in the name of the trust or passed outside of probate, then a probate is necessary and your will controls who gets what.

 

It is important to talk to an attorney so that you can get your estate plan done correctly.