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Introduction

A Last Will & Testament serves as the foundation of many estate plans. Although many other methods now exist to transfer property on death, a Will is still a an important part of any estate plan. Use of a Will allows the naming of a personal representative (sometimes called an executor), waiving certain expensive or complex court rules, and for disposition of property, including gifts for long term support. This article will discuss some of the basic Will planning considerations to think about in planning your estate.

Personal Representatives

A Personal Representative (sometimes called an executor) is a person named in a Will to settle an estate. The role of a personal representative includes filing the Will with the proper Court, assembling and safe guarding the property of the deceased, preparing inventories and itemizations of property and expenses, and distributing the deceased’s property to its rightful recipients. This may sound like a daunting challenge, but in practice most of the actual work may be done by an attorney selected by the Personal Representative.

When planning a Will it is important to select a trustworthy person to be named as Personal Representative. It is also important to consider an alternate Personal Representative to be named in case the first selection is unwilling or unable to serve as Personal Representative when the time comes. A natural choice is often the Will maker’s surviving spouse. A trusted relative or adult child can also perform the role of Personal Representative. For especially complicated estate plans it is also possible to name a corporation such as a bank to act as Personal Representative. Due to the cost of such corporate representative, however, it is usually preferable to name a relative unless the estate plan is very large or complicated.

If no person named in the Will is willing or able to serve as Personal Representative, that will not cause a Will to be ineffective. Under such circumstances the court of the jurisdiction in which the person died may appoint a qualified Personal Representative of the court’s choice. Courts will often still consider relatives for such role, but if none are willing or able to serve each county maintains a Public Administrator who may administer estates when no other person is available.

Independent Administration and Bond

Once a Personal Representative (and perhaps an alternate) has been selected it is important to decide what ground rules will govern the estate. Missouri provides for either supervised or independent estate administration. With supervised administration the court must approve most actions of the Personal Representative before the actions may be performed. Alternatively, with independent administration the Personal Representative mostly handles the estate without supervision and reports to the court at the end of estate for final review and approval of the actions taken.

Supervised administration is the default, unless a Will requests independent administration. In most circumstances we recommend independent administration, because it is faster, simpler, and often less expensive. Even with independent administration a court will still review all of the Personal Representatives decisions at the close of the estate prior to the deceased’s property being distributed. As such, the risk of problems arising due to the lesser amount of active supervision is low.

There are circumstances where we recommend selecting supervised administration. Generally, supervised administration is appropriate where there is significant conflict between the potential heirs or if there is a controversial gift or provision contained in the Will. Under such circumstances a court’s approval of the Personal Representative’s actions before they occur may prevent some conflict.

In addition to selecting the method of administration, it is also important to consider whether the Personal Representative will be required to post a bond with the court. The default position is that the Personal Representative must post a bond for the approximate value of the deceased’s assets. This is generally done by retaining a bonding company which must be paid a fee to issue the bond. In circumstances where the deceased’s property will all be given to his or her spouse and or children we often suggest waiving the Personal Representative’s bond, as it is an additional expense which must be borne. However, as with supervised administration in situations in which significant conflict or controversy is expected it may be wise to include a bonding requirement for the Personal Representative.

Gifts and Devises

Perhaps the most important consideration in drafting a Will is who will received the deceased’s property. Gifts of property can be either specific or general and many wills contain both. A specific gift would be a gift such as “my wedding ring to my spouse, John Doe” A generally gift would provide for division of any property not included in specific gifts, i.e. equal shares of the remaining property to each child, etc.

Generally, any property can be gifted by a Will with an important caveat: Property that is subject to a transfer on death (TOD), pay on death (POD), beneficiary designation (such as life insurance), beneficiary deed, or other means of non-probate transfer cannot be gifted by Will. If you own property that contains such designations it is imperative to regularly review such designations to make sure they still match your desires. Such designations will supersede the provisions of a Will regardless of which document was created first/last.

Providing for Children

A Will is also one of the best vehicles to provide for the long term care of minor children. A first consideration is what person would be best to care for children upon the death of the children’s parent(s). Generally, if only one parent dies the surviving parent will be the natural guardian of the children. However, if both parents die in a common accident or otherwise a Will may name the person that the parent’s desire to act as guardian of the children thereafter. If both parents are deceased and the named person is qualified and able to serve as guardian then a court must follow the wishes indicated in the Will.

Minor children also cannot directly receive inheritance gifts. As such, a Will should set up provisions for trust to be created on behalf of the children in the event of the death of both parents. The Will can name the person who would serve as trustee and how the money should be distributed to the children. A common distribution scheme is for the children’s health, education, support, and welfare to be provided while they are minors and then for the remaining inheritance money to be distributed upon reaching a certain age. Such distributions can also be graduated, for instance 25% at 25, 25% at 30, 50% at 35.

Providing for Disabled Relatives

Special considerations must be taken into account when making gifts to a disabled relative. Many disability benefits, such as medicaid and supplemental security income (SSI) are means tested. This means that if a person receiving such benefit suddenly inherits even small sums of money he or she may become ineligible for such benefit. Lose of such benefit can be the difference between life and death.

Gifts for disabled relatives is beyond the scope of this article, but Missouri does provide for methods of making such gifts that avoid the lose of benefits. Common examples are special needs trusts and MO-ABLE accounts. If you are considering making a gift to a disabled relative, please contact our attorneys and we would be happy to discuss specific options available to your situation.

Conclusion

Hopefully this article has provided information that will assist in making your estate planning decisions. Usually a Will is only one part of a comprehensive estate plan that may also include powers of attorney, trusts, living wills, and healthcare directives. When you are ready, please contact our office to schedule a free consultation where we may review and discuss your specific needs.

 

 

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