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Your Will and Estate Planning Documents – When Bigger is not Better

OLA_Eric

I have seen hundreds, if not thousands, of estate plans.  I have drafted them, reviewed them for others, and fought to either enforce or break them.  What I have learned from all of this reading is that the longer a document—whether  a contract , a will or a trust—the more likely I will find a problem with it.  An important principle of legal drafting – get to the point, quickly.

Wills that are very long are more likely to contain mistakes.  A properly executed one-line Will – “I leave all of my stuff to Harry Teichman” –leaves no room for mistakes.  Understandably, your final wishes may be a bit more complicated.  And there are other provisions that should be included and will save your family time and money in administering your estate; provisions such as authority to deal with digital assets are a must in any modern will.  But there are a lot of “standard” provisions that are included in most wills and that I would omit from any estate planning documents I draft today.

As a new lawyer, I spent a lot of time learning what each and every provision in every document that I drafted meant.  Soon, I began to question the usefulness of many provisions in wills and trusts.  What I noticed is that some very long and most likely expensive documents contained mistakes; some very costly.  The grammar may have been perfect, the punctuation may have been perfect, the spelling may have been perfect, but the end result of some of those documents would have been very wrong.

A big reason for many of these problems was a failure by the estate planner to get to know his or her client’s family circumstances.  Estate planning is not a one-size-fits-all solution. The main advantage I have over a computer (at least for now) is that I can ask a lot of questions and I can make suppositions and suggestions to clients about what it is they really want to do with their assets when they die.  And I can take that information and develop better techniques to get those results without jeopardizing a client’s assets.

Here is a recent, real-life example in which an estate planner’s failure to understand the decedent’s family, coupled with the use of an unreasonably lengthy will form, created disastrous results:  To appreciate the epic failure of the document in this example, you need to know that Florida law generally protects one homestead—the personal primary residence of a Florida decedent— from creditors, and also allows 2 cars and $20,000 of household furnishings to pass free and clear of a probate.  In other words, your house, 2 cars and some furniture and art that are in your name get quickly passed on to your family, provided your will does not mess that up.

. . . And that’s where the 55 page will comes in.  Decedent, a widow, wanted to make sure that her daughter gets the widow’s residence, her son gets the family’s beach house, and her grandson gets the Ferrari that her late husband purchased during the latter stages of his mid-life crisis but barely used.   She tells all of this to her lawyer, who plugs the names into his will-drafting software and spins out a 55-page will, complete with all of the standard provisions dressed up with impressive legalese.  After the widow dies, owing a lot of money to a hospital, her adult children learn the language in the impressive-looking will allowed creditors to force the sale of the Ferrari and the family home, both of which should have passed free and clear of those creditors.

Had her Will been one or two pages, her kids would have kept a large portion of her estate despite the crushing debt to the hospital.  But because her estate planner used forms containing flowery, expensive and official sounding language, including a phrase directing that the personal representative “pays my debts” or leaving “all my automobiles and personal effects” to certain people who don’t get creditor protection, they got none of it.

The widow’s estate planner should have discussed with her certain doomsday scenarios, such as having large debt at death.  Further, the estate planner should have discussed the likelihood that the Ferrari would eventually be passed on to her grandson by her adult children after they received it (with protection from creditors).

Estates of all sizes are still entitled to these protections.  No matter the complexity of your holdings, you should view a very large estate planning document with skepticism.  Ask your lawyer about doomsday scenarios and how they play out with your intent for your assets.  Further, make sure your lawyer understands your family dynamic when drafting your plan.   Finally, be careful when reading language in a will directing anybody to pay your debts.  Such language is unnecessary—the personal representative will pay what is required to be paid, with or without such language—and can only create greater obligations than may otherwise exist.

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