Louis N. Teti, LL.M.

Original Article with analysis of Misconceptions #16 and #15 - "Top 16" List of Common Misconceptions in Estate Planning- Highlighting Misconceptions 16 and 15
Analysis of Misconceptions #14 and #13 - "Top 16" List of Common Misconceptions in Estate Planning - Highlighting Misconceptions 14 and 13
Analysis of Misconceptions #12 and #11 - "Top 16" List of Common Misconceptions in Estate Planning - Highlighting Misconceptions 12 and 11
Analysis of Misconceptions #10 and #9 - "Top 16" List of Common Misconceptions in Estate Planning - Highlighting Misconceptions 10 and 9
Analysis of Misconceptions #8 and #7 - "Top 16" List of Common Misconceptions in Estate Planning - Highlighting Misconceptions 8 and 7
Analysis of Misconceptions #8 and #7 - "Top 16" List of Common Misconceptions in Estate Planning - Highlighting Misconceptions 6 and 5
Analysis of Misconceptions #6 and #5 - "Top 16" List of Common Misconceptions in Estate Planning - Highlighting Misconceptions 4 and 3

Misconception #2:
"I don't need to read my Will for accuracy. My lawyer sent a draft to me, but he told me what was in the Will, so I'm sure everything is fine."
Not so! Lawyers are human, and they can make mistakes. Remember that your Will and other estate planning documents dispose of your hard-earned assets at the time of your death. It is critical that you carefully review the language of your Will, to make sure that your ultimate intentions will be carried out upon your death. If you read the Will and do not understand certain terminology, you should ask your lawyer to explain that terminology so that you do understand it before you sign the Will. It is quite possible that your lawyer may have assumed something in drafting the Will, and in an effort to complete the assignment expeditiously, he or she did not fully review that assumption with you.

As an example, I spend considerable time discussing with clients what happens in the event of a "catastrophic situation," when there are no children, grandchildren, or other "conventional" heirs surviving the decedent. In such a situation, many "form Wills" (which I have discussed in earlier articles as being a dangerous way to go) have the estate passing to "intestate heirs." Many times, a client will not know what the word "intestate" means, let alone know who his or her "intestate heirs" are. This terminology is simply a reference to statutory provisions in the state where the decedent resides that provide for an order of distribution of the estate in the event all of the beneficiaries named in the Will are deceased, or in the event there is no Will. Many times, a client's intestate heirs are not the persons to whom he or she would want to leave the estate in the event of a catastrophic situation. You should always review this issue during the initial estate planning conference, and you should review your Will to make sure that your intentions are accurately stated.

Also, it is possible that there are clerical errors in the drafts of the Wills that you receive for your review. A person's name could be spelled wrong, initials could be incorrect, or, of even greater concern, the name of a beneficiary could have been omitted inadvertently.

My advice to all clients is not to sign a Will unless he or she has first read a draft of the Will, or has at least been given an opportunity to read it. At the very least, the provisions of the Will should be reviewed by the attorney with the client at the time of the signing, before the actual signing occurs. Remember that there is no such thing as a "simple" estate plan. Each plan is different, and every family situation is unique. Take the time to review a draft of your Will before you sign it, to make sure that you understand it, to make sure that there are no errors in the Will, and most importantly, to make sure that your intentions are clearly and accurately reflected. Taking the time to review and discuss the Will now will avoid potential heartache, misunderstanding, hard feelings, and expense at the time of your death.

Misconception #1:
"We are concerned about our son's marriage and whether it will last. His inheritance from us won't be part of his and his wife's marital estate if he gets divorced after I die."

Over the years, one of the most frequent questions posed by clients is how they can "protect" their child's inheritance from the reach of that child's spouse. With the divorce rate in America climbing with each passing year, this particular concern is on the minds of many clients. It is a concern which requires careful thought and understanding, and, more than likely, a dialogue with the child.

First, remember that divorce laws differ from state to state, and the controlling law is the law of the state where the child resides. It is unwise for a client to assume that an inheritance will not be part of a child and a child's spouse's "marital estate," without consulting the law of the state where that child resides. Also, clients frequently misunderstand the fact that upon their death, if they give their estate outright and with no restrictions to a child, then the child will then be the owner of the inherited assets, and the child will control the ultimate distribution of those assets. If the child keeps inherited assets in his individual name, then upon that child's death, those assets will be distributed in accordance with the child's Will or other estate planning document(s), but such a distribution could be subject to the right of the child's spouse to "take against the Will."

However, children frequently receive inherited assets and either immediately, or over time, convert them into joint assets with his or her spouse, thus changing the picture completely. At that point, these assets become joint property, subject to the control of both the child and his or her spouse. More importantly, if the assets are held in a joint account as "tenants by the entireties," then the ultimate disposition of those assets will be determined by the Will of the person who dies last. This could be your son-in-law or daughter-in-law.

This particular issue is influenced by many factors. Frequently, clients advise us that their children are all happily married and that there are no marital issues. Unfortunately, more frequently we hear that there is at least one child who is in a difficult marriage, and the client wants to make sure that the child's spouse does not receive any portion of the inherited estate. In these situations, we encourage clients to, first and foremost, understand the impact of giving an asset to a child outright versus giving it to the child in trust over a period of years or over the child's lifetime. We also stress the importance of family meetings, where parents and children may have open and frank discussions about issues relating to inheritance. Generally speaking, children are uncomfortable raising issues about inheritance with their parents. Even when the parent initiates a conversation, children are frequently uncomfortable with discussing issues relating to their parents' mortality. However, if you have a concern about how your assets will ultimately be distributed, and if you have a distinct desire to exclude a child's spouse in the ultimate distribution plan, then it is critical that you discuss with your children ways to protect these assets if the child inherits them outright, and/or the advisability of creating a trust for the child's lifetime, so as to insulate the inherited assets from the reach of a child's spouse.

Conversely, sometimes clients want to make sure that if a child is deceased, then that child's spouse will receive that child's share instead of the child's children. Most frequently, this occurs in cases of long lasting, mature marriages where the child's spouse is seen as one of the clients' natural children as opposed to an "in-law." In these situations, the Will must be carefully worded to reflect the client's intention that the child's spouse will receive the child's share if the child predeceases the client. If such a precaution is not taken, then the "normal" language of a Will would provide that if a child is deceased, then that child's children would receive the deceased child's share.

In the first article of this series, I stressed that there is no such thing as a "simple" estate plan. Over the last several months, I have reviewed various commonly held misconceptions, each of which is designed to illustrate that in order to do an effective estate plan, even in the "simplest situation," it is critical that the client and the client's lawyer meet for an extended initial conference to review various facts and circumstances which make the client's situation unique. Also, it is important to ask the critical "what if" questions in order to explore as many potential situations as possible in achieving a final Will that accurately reflects a client's intentions, at least as those intentions that exist at the time the Will is signed.

Of course, it is also important to review your Will regularly, at least every two or three years, because circumstances in today's world can change very quickly, and intentions can also change that quickly. Remember, you have worked hard for your assets and for the wealth that you have achieved. The size of your estate should not affect how you feel about the estate planning process. These are your assets, and you want to make sure that your intentions are carried out at death and not the intentions as interpreted by a judge, another family member, or a state's intestate laws. It is always very satisfying to see the relief the clients feel once they have gone through the process and have signed estate planning documents with which they are comfortable and that they fully understand.

MacElree Harvey
17 West Miner Street
Post Office Box 660
West Chester, PA 19381–0660
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