How to Make Sure Your Assets Are Distributed According to Your Wishes

A COMMON problem facing many families after the death of a loved one is the disposal of the estate and ensuring the wishes of the deceased are honored.

When there is no will in place, this can become expensive and time consuming, as the estate will be divided amongst heirs as set out by state law – which may not reflect what the deceased wanted and can cause family fractures.

Making a will can help mitigate these problems as your wishes will be followed, and your possessions, belongings and wealth given as you intended.

But it is important to ensure a will is properly legally written and witnessed, and even then, there can be problems if the will has not been structured well, which is why using a legal professional is always advisable as they can guide you through common problem areas.

It helps to understand how distributing your estate works in practice. The first stage is to handle specific bequests as you lay down, most often used for prized possessions. For example, leaving a cherished antique to a named individual or set amount of cash to a favored charity or good cause.

The second stage is the general, or residual, bequest where everything else not specifically set down is liquidated and poured into the ‘residual distribution’ which is then allocated amongst named beneficiaries, such as your spouse and children, in percentages you can specify. For example, ‘I leave my whole estate to my wife, and should she predecease me, the estate is to be split equally between my two children’.

Allocating the residual distribution can be done in many, many ways, and permutations according to your preferences and family dynamics, especially as extended and blended families become ever more common. Often people attach conditions as well, such as specifying a beneficiary must have reached a set age before inheriting – possibly in several layers. These ‘constraining clauses’ may need a trust to be established and will have ongoing legal fees while they are in place – all the more reason to work with a lawyer with expertise in this area.

When considering passing money to your beneficiaries, you can specify a set dollar amount for a percentage of the residual. Other than for token cash gifts to specific individuals, a set dollar amount is often not a wise idea – it will be paid out first as a specific bequest and if the estate turns out to be smaller than anticipated, the key beneficiaries in the residual bequest may now get much less than you intended after the specific bequest is paid.

Alternatively, if you made your will many years ago and not updated it, what may have been a very generous specific bequest then may have become much diminished in value and your intent over time due to inflation.

Bequeathing your estate in percentages gives much more flexibility when finalizing your estate and is much more likely to achieve your intent in your giving than specific dollar amounts.

As can be seen, creating a will can be a simple affair, but creating a will that will achieve your desired wishes and ensure your possessions are left to those you want to benefit from them can be rather more complicated. Seeking good legal advice in preparing your final wishes can give you – and your loved ones – strong peace of mind.