Recently the Wall Street Journal published an article that stated only 10% of the adult population has a plan for a lifetime disability or for distribution of assets at death. This is pretty stunning when you consider how protective we generally are of our children and the things we own, combined with the fact that we are all unable to avoid death. But the truth is - if you don’t make a plan for after you’re gone, then your state mandated estate plan may harm, rather than benefit your family.
We all have an estate plan, it just isn’t one we’ve designed. If you have no will or living trust, then your state of residence will provide you with one that will probably not align with your true wishes, and will likely leave your family stressed and fighting.
The following Last will and Testament, a document that has been floating around the legal field anonymously for years, is an example of exactly how an automatic state plan will affect your estate, family, business and legacy.
Being of sound mind and memory, I __________________________________, do hereby publish this as my last Will and Testament:
FIRST: I direct my estate be distributed to my spouse and family according to the probate code which can result in various splits between my spouse, my children or my other family members depending upon who survives me, whether my children are of my current marriage and the value of my estate and I realize this method leaves me no control over who receives what parts of my estate.
SECOND: I do not want any responsibility in deciding how my children are to receive my estate or who is to receive my estate and manage it for my children if they are minors or otherwise need help in managing assets. I forgo the opportunity to take advantage of estate planning techniques which may be more advantageous for my children and descendants.
THIRD: I do not want any responsibility in deciding how my business will be passed down to my children or key employees or making sure that is an orderly transition. I recognize most likely the business will be sold to third parties probably for less than it is worth. I do not care if my children in the business fight with those out of the business or if my children out of the business force a sale of the business. If I am in business with others I forgo the opportunity to have orderly control over what happens to my business interest and the opportunity to maximize and make sure my spouse and heirs receive what my interest is worth.
FOURTH: Should my spouse remarry, the second spouse shall be entitled to a share of my estate and my spouse’s estate and the second spouse shall not be bound to spend any part of his/her share for the support of my children and may use my assets and my spouse’s assets for and leave them to his or her children.
FIFTH: Should my spouse predecease me, I do not wish to exercise my right to nominate the guardian of my children.
Rather than nominating a guardian of my preference, I direct my relatives and friends to get together and select a guardian by mutual consent. In the event they fail to agree on a guardian, I direct the court to make the selection and unnecessary time and money be spent in court.
SIXTH: Under existing tax law, there are certain techniques available for minimizing death taxes on my estate and income taxes on my retirement plan or IRA but I am foregoing the opportunity to take advantage of those techniques and wish the government to be one of my beneficiaries.
We all have good intentions for our family, but failure to execute our plans and intentions can have catastrophic results. Don’t put your family and loved ones at risk - contact a qualified attorney to help you create a uniquely tailored estate plan that puts your true wishes and intentions into action.