Why It Is Important to Have a Will

Why It Is Important to Have a Will

57% of American adults have not prepared a Last Will & Testament (a “Will”) according to Care.com’s estate planning survey. The survey found that participants were more likely or less likely to have a Will depending on issues such as age, race, and education. For example, when broken down generationally, 66% of people aged 65 and older, comprising the Baby Boomer generation and The Greatest Generation, have a Will, better than the overall average. Only 39% of the participants that fell into Generation X and 18% of the Millennial participants have a Will, well below the overall average.

The survey participants that did not have a Will gave many reasons why. The overwhelming answer was that they just had not gotten around to it. This answer was given 52% of the time. The next most common reason, given 22% of the time, was that they did not think they had enough assets to need a Will. The cost of making a Will was given as a reason 6% of the time, which was one of the least given answers.

Understanding the Power of a Will

The survey points out a major flaw in understanding the power of a Will. Most people have a basic understanding that a Will transfers assets you own when you die to the people outlined in your Will. Based on this oversimplified explanation of a reason to have a Will, it is easy to understand why younger people and people who have not yet amassed many assets misbelieve they do not need a Will. Never mind that anyone can die at any time, or that you own more than you realize and you want to have someone named to deal with all your stuff.

More importantly, anyone with a minor child should use a Will to name a Guardian for that child. Whether you are married to or divorced from the child’s other parent, naming a Guardian in case of your death is paramount. If the child’s other parent or adoptive parent is alive and still has parental rights when you die, the child stays with that parent. However, if the child’s other parent is dead or does not have parental rights, then the person nominated as Guardian in your Will is the only person that can stand up in guardianship court and definitively say that you believed your minor child’s custody should transfer to them. Then, since you are making a Will, you might as well also state who should inherit any assets you might own.

Creating a Will is a simple process when you engage experienced attorneys like us. Sometimes you know the best person to care for your child. Sometimes you need help picking between family members, or you do not have family members to choose from. We are not here to just fill out a Will form for you. We are here to help you and guide you through whatever issue is preventing you from making a Will. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.

Establish a Trust to Pass Wealth and Family Values on to Your Children

Establish a Trust to Pass Wealth and Family Values on to Your Children

Parents need to instill family values at an early age to ensure the adoption of these family values. Undoubtedly the best time to teach and empower your children as eventual inheritors of your family legacy is during childhood, then continuing throughout adulthood. Waiting until your later stages in life to discuss family values as a guide to handling inherited worth is often ill-received as grown adult children prefer not to feel parented anymore, particularly when they are raising children of their own.

There is value in the spiritual, intellectual, and human capital of rising generations, and it is incumbent upon older generations to embrace this notion and work with their heirs rather than dictating to them their ideas about how to facilitate better outcomes. While the directions taken by newer generations will likely differ and can sometimes be downright frightening than that of their elders, there can still be a deep sense of service and responsibility to family values and stewardship of inherited wealth. Allow your children to exert their influence over the family enterprise early on in life and make adjustments that create synergy, connection, and like-mindedness.

If this description of a somewhat ideal family system does not resemble yours, take heart. Most families do not conform to perfect standards of interaction. The more affluent a family is, the higher the failure rate to disperse assets without severe fallout. The Williams Group conducted a 20-year study and determined there is a 70 percent failure rate that includes rapid asset depletion and disintegration of family relationships during and after inheritance. Establishing inheritable trusts can provide real benefits. Benefits include avoiding probate, reducing time to handle estate matters, privacy protection, the elimination or reduction of the estate tax, and can be effective pre-nuptial planning. A parent who wants to control outcomes should focus on these benefits of the trust instead of trying to legislate their future adult children’s behavior.

It is imperative not to allow your values and legacy to become weaponized within the family system. A sure-fire way to inspire conflict is via “dead hand control,” meaning trying to control lives from the grave. Most often, if you put excessive trust restraints on adult children, they will act accordingly to your perception that they are not adult enough to handle wealth. Instead, consider enrolling them in a few classes about managing wealth. Spark an interest in them to learn how you have created wealth, the mechanisms you used, and what their future endeavors may look like long after you are gone. Formally educate your children about finances, the earlier the better, and instead of talking about who gets what the conversation can shift to the mechanics of managing wealth. This tactic resets the context of the issue and aligns purpose and intended long-term outcomes.

Estate planners try to encourage trust choices that lead to flexibility. If a beneficiary is genuinely incapable of making the right decisions, a trustee can be appointed to make distributions in the beneficiary’s best interest. This trustee discretionary power of money management can help a well-funded trust survive for generations.

You can also write a letter of wishes or provide a statement of intent to your children. Though these are not legally binding, it gives you a platform to remind them of family values and your desire for these values to be maintained for future family generations. This type of letter is an opportunity for you to convey your vision for how your wealth can bring growth and a chance for fulfillment to beneficiaries.

Prosperity should positively shape lives. Family trust beneficiaries hopefully already have a self-driven life that includes purpose, responsible behavior, and a basic understanding of personal finance. If you worry your children may squander inheritable assets, create the opportunity for them to succeed through classes that teach them about managing legacy family values and wealth. Address your concerns legally and directly through a detailed trust that can help but not overly constrain them to achieve what you envision they can become. Start an honest conversation early on, but remember it is never too late to make good choices and create positive family value influences for the coming generations. A well-known Ann Landers quote sums it up neatly, “In the final analysis it is not what you do for your children but what you have taught them to do for themselves that will make them successful human beings” – a worthy goal of any family value system.

If you are interested in establishing a trust to pass wealth on to your children, we can help. We can also guide families on how to pass on family values in a meaningful way. We look forward to the opportunity to work with you.  If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.