When making a will or living trust, be aware that making specific bequests of property, rather than dividing your estate into shares or dollar amounts, can increase your legal fees and costs in the future. If you have a limited budget for estate planning, it is important to have your will, living trust, and other estate planning documents drafted with consideration of potential changes that may occur with respect to your assets and beneficiaries in the future. Unless your estate plan features some amount of flexibility, your will or living trust may become outdated too quickly and require costly revisions, such as codicils and amendments or entirely new documents.
It can be tempting to leave specific property to a particular child or heir. You may feel certain property will be more appreciated by a certain beneficiary. The problem is, the property we own and its value is likely to change over time. This can create problems with an estate plan that has the intent of leaving children or grandchildren equal amounts of property using specific bequests.
For example, you may want your stock portfolio to go to your son and your vacation home to go to your daughter. At the time you made your will, those assets may have been worth approximately the same amount. However, a few years later, your stock portfolio has declined in value and you sold your vacation home because you rarely used it. You decide to leave some other assets to each child. Unfortunately, you need to make a codicil to your will to ensure each child receives the same amount of inheritance. A better alternative may be to leave your estate to your children in equal shares, regardless of what property ultimately remains in your estate.
Stepparents and Specific Bequests in Wills
Specific bequests are extremely common in stepparents' estate plans. This is because a stepparent may not want stepchildren to inherit his or her property, which means each spouse may leave specific assets to each child in a will or living trust, such as the house to our son, John, and the car to Jimís daughter, Lily. If the car is not in the estate when the couple dies, the daughter is left without an inheritance because specific bequests of property were used. Use of specific bequests can result in accidental disinheritance or unintentional disinheritance.
When one spouse has a child from a previous relationship and the couple has a child of their own, it is not uncommon for the stepparent to want all his or her property to go to the coupleís biological child. In these situations, the couple may leave their house and its contents to their child. The parent of the stepchild may then divide his separate property between the child from the previous relationship and the child from the new marriage. Using specific bequests in this type of estate plan almost guarantees the need for frequent document changes and added costs.For parents who want to avoid the need for frequent codicils and trust amendments, a simpler alternative is dividing the estate into shares or dollar amounts, whether equal or unequal. For example, a married couple may leave two thirds of their estate to their child and one third to the husbandís child from a prior marriage. Using this method of distribution, your child may not inherit a specific asset, such as an antique desk or a specific piece of land, but you can ensure your child will receive a fixed percentage of your estate. Conversely, specific bequests can result in unintentional disinheritance of a child due to certain property no longer being in the estate.Related articles: blended families, stepparents estate plan, and parent's estate plan.
Making Specific Bequests in an Estate Plan
Although making specific bequests has certain disadvantages in estate planning, you may still decide it is important to ensure a particular beneficiary inherits a specific asset. In these circumstances, have your will or living trust prepared by an attorney so the documents can be drafted in a way that minimizes the need for frequent updates and reduces potential problems. See making specific bequests.
INFORMATION ON THIS SITE, INCLUDING ARTICLES, ESTATE PLANNING FORMS, AND THE ESTATE PLANNING BLOG, IS NOT LEGAL ADVICE. Pennyborn.com is not a law firm and is not a substitute for a lawyer. Your use of this site does not create an attorney-client relationship.