Dolly Parton’s estate planning matters less for the size of her estate than for what it can teach the rest of us.
A Sept. 30 MarketWatch article describes a too-common scenario where there may be mismatched expectations or miscommunications. The case is still early in litigation, but the article describes how solid planning can provide a clear path forward. If a plan is silent on a particular issue, parties sometimes end up in court … BUT, lawyers are nothing if not masters at the “what if” game.
While a client may come in with a desire to simply split an estate equally, a comprehensive plan should account for contingencies that can crop up in any number of ways:
- Should gifts to an unstable, addicted child be left in the same form as gifts to a stable, successful child?
- Should a gift to pay for college for 18-year-olds and 3-year-olds be in the same amount, or should it account for market growth and/or tuition inflation?
- How will non-monetary gifts (property, heirlooms, etc.) be appraised and/or distributed, when the beneficiaries may value them differently?
- If a child predeceases the parents, should their share be managed by the surviving spouse (who may remarry) or be left in trust for the grandchildren?
- Will a family business left equally to two siblings create a stalemate that may doom the business?
In short, a well-written trust removes uncertainties, and while its terms ultimately control the outcomes, legacy planning should go further. Conversations during a lifetime with both prospective trustees and beneficiaries can go a long way to removing any mismatch in expectations.
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