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What to Leave OUT of Your Will

28 January 2025

We advise every client who comes to us intestate to have a will drafted, and we ask those with wills to provide copies so we can review them.

But what, properly speaking, really should be left out of your will?

Here are some examples:

Jointly Held Property

Jointly held property will, upon your death, become the sole property of the other property owner(s). Some examples of property which may be jointly held are:

  • Real Estate: many spouses own their primary residences in joint tenancy. Some also own investment properties together, though at Rigby Financial Group we recommend investment properties be placed in LLCs, preferably one LLC dedicated to each investment property owned.
  • Brokerage and Bank Accounts: joint investment and bank accounts are common among married couples. Such accounts can often be given designated beneficiaries in the event they are not held jointly. Beneficiary-designated accounts will allow your loved ones access to cash prior to your will going through the probate process – don’t leave them caught short!

 

Assets With Designated Beneficiaries

Don’t include assets with beneficiary designations in your will – these designations on such assets take precedence over any testamentary disposal of those assets to the contrary:

Some examples of assets with beneficiary designations are:

  • Life insurance policies
  • Disability insurance policies
  • Retirement accounts, such as IRAs, 401(k)s, 403(b)s and 457(b)s
  • Some stocks and bonds may be “held in beneficiary”
  • Investment and bank accounts can, in most cases, have a designated beneficiary

 

Provisions for a Beneficiary with Special Needs

Leaving assets in your will to a beneficiary with special needs is usually inadvisable, for two principal reasons:

  • First, leaving assets directly to an individual with special needs can jeopardize governmental assistance (such as Social Security and Medicaid) – at least, until those assets are spent down to a small balance.
  • Second, there are better ways to protect the future of any of your loved ones with special needs, such as a trust for their benefit.

 

Two types of trusts can be arranged for those with special needs:

Special Needs Trust – this is a first-party trust whereby assets are gifted to the beneficiary and placed in trust for his/her benefit. This trust protects the beneficiary’s rights to governmental assistance, but must:

  • Be created and funded before the beneficiary turns 65.
  • Provide that Medicaid is to be reimbursed for funds received by the beneficiary at his or her death or the termination of the trust, whichever comes first.

 

Supplemental Needs Trust – this is a third-party trust, funded entirely by the grantor’s assets (no assets owned by the beneficiary may be used to fund this type of trust), such as gifts or life insurance proceeds (naming the trust as beneficiary of the policy or policies in question), This trust also:

  • Protects the rights of the beneficiary to governmental assistance.
  • Requires no repayment to Medicaid.
  • Allows any remaining funds within the trust no longer needed for the beneficiary’s welfare to be distributed according to the specifications of the grantor.

 

Your Business

If you are a business owner, your business may represent a significant portion of your assets. However, no matter how you want your business’s future handled, it’s best not to dispose of it via your will.

A much better way is to have a business succession plan in place, and to execute that plan prior to your planned retirement. We recommend this whether you plan your business’ succession as transferring control to:

  • Family members,
  • Existing partners,
  • Management and/or other key employees, or
  • And outside buyer or buyers.

 

You can also set up a trust to hold the business, in case events overtake you before you have a chance to execute your business’ succession plan.

Provisions Concerning Pets

We love our pets, they are members of our family, and, if you think you are likely to predecease your beloved animal companion, it’s natural to want to make provisions for yours.

However, under the law, pets cannot inherit a penny – they aren’t recognized as the individuals we understand them to be – legally, they are merely property.

If you want to ensure your pet is taken care of, you can either set up a trust for that pet’s benefit, or designate a guardian, providing funds to ensure the care you want for your animal.

Usually the latter is sufficient – while we are big fans of using trusts when appropriate, they can be expensive, and if you already have more than one trust, either set up or in prospect, we don’t necessarily recommend a pet trust.

Guns

If you are a gun owner, and especially if you have more than one firearm, we recommend not leaving them to your beneficiaries in your will – a public, legal document, subject to probate court scrutiny.

Gun owners, including those who inherit, are subject to federal and state requirements as to minimum age, mental capacity, and sometimes other restrictions.

We strongly recommend setting up a trust to dispose of any firearms you own, by which means you can avoid running afoul of the law.

Other Items to Leave Out of Your Will

Don’t include:

  • Sensitive information, such as social security numbers, for either yourself or any beneficiary.
  • Your last wishes and instructions. Leave guidance on the service you want, if any, or memorial celebrations, in a separate letter of instruction for those who will be tasked with this.

 

These are only some examples of what to leave out of your will. We urge you to consult with your virtual CFO or other trusted financial advisor, as well as your estate attorney, to ensure your will is updated and appropriate, and that any trusts appropriate to protect your family, your legacy, and your assets, are set up.

Please click here to email us directly – our expertise is broad and deep, and our commitment to helping you dispose of your assets according to your unique goals and wishes equally so.

Until next time –

Peace,

Eric

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