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When a Will Isn’t Quite Enough

On Behalf of | Mar 4, 2018 | Elder Law

We put on a lot of educational workshops for our community. We discuss the difference in a Will, a Power of Attorney, a Healthcare Directive, and a Living Will. We talk about planning to avoid probate and to prepare for Long-Term Care Costs. And we talk about the big T – trusts.

After our workshops, we are often approached, and at every workshop, we are told the same thing – “I already have a will, so I’m covered.”

This is so often repeated to us that we have begun to address it within our workshops. For many people, a will really is all that they need. Usually a young family with few assets really just needs the basic estate planning documents – a Will, a Power of Attorney, a Healthcare Power of Attorney, and a Living Will. As family situations change and people age, however, their estate planning needs often evolve into something…more complicated.

Take for example the Halfus family. Mr. and Mrs. Halfus informed me at their vision meeting that they had been married for 30 years. They have three children together, but Mrs. Halfus also has an older child from a previous relationship. Mr. and Mrs. Halfus each have a will, which was executed 15 years prior to our consultation. The wills leave everything to each other first, and in the alternative, to their children. One of their children has been diagnosed with bi-polar disorder and has a substance abuse problem.

So what’s the problem for the Halfus family? The problems are two-fold. First, the painfully clear reality is that if Mrs. Halfus dies first, her property will pass to her husband. Upon his death, their property will pass to their children – not to Mrs. Halfus’ oldest child.

And second, the Halfus’ should not leave an outright gift to their bi-polar child with a substance abuse problem. That could quickly lead to both the loss of benefits and a very dangerous, possibly life-threatening, substance abuse situation.

But wouldn’t the easiest solution be to simply change Mr. Halfus’ will to include Mrs. Halfus’ oldest child as well and to give the other children a little extra to help the disabled child? Perhaps…except that Mrs. Halfus has no guarantee that Mr. Halfus will not change that will the day after her funeral…or upon his own later remarriage…or when his step-child forgets to send him a Christmas card after a few years. And the Halfus’ have no guarantee that the other children will use any of their inheritance to assist the other child.

In blended families, and in families with disabled children, a family trust is often the best course to protect ultimate beneficiaries.

Now that Mr. and Mrs. Halfus realize that a trust is the best protector of their ultimate beneficiaries, they have to consider the cost. The cost of a will 15 years ago will never compare to the cost of a trust today. Mr. and Mrs. Halfus have to decide if the future value of avoiding probate and protecting their ultimate beneficiaries is worth the $3,100 cost of an Enhanced Revocable Living Trust package today.