It happened again last week. My office got a call from an adult child whose mother had died, and the children could not find a will or a trust, but they “thought” their mom had one.
They found a will and it made reference to a trust, but it wasn’t signed.
We’ve received similar calls where one child is certain there is a trust but accuses another child of destroying the document. And of course, we often see heirs locate a will or a trust only to be completely surprised by the contents therein.
Some secrets shouldn’t be kept.
Where documents are located
None of us get to know how or when we’ll die or become incapacitated. Thus, regardless of your age, if you go to the trouble and expense of getting your estate plan in order, please make certain someone else knows where those documents are kept. One of the main benefits of a trust is avoiding probate court, but if no one can locate the original documents, nothing can be done to handle your estate (or your affairs on your behalf in the event of your incapacity) without a court proceeding.
If you’ve opted to keep your documents in a fireproof safe at home, please make sure someone else can access the safe. The same applies if you keep your documents in a bank safe deposit box.
You don’t have to disclose the contents of your documents, but where those documents are located should not be kept a secret from everyone.
Who should know about your estate documents?
The answer to this question is more nuanced and can depend on the role each party plays.
Successor Trustees. Certainly, the party you have named as your successor trustee (i.e., the person who will carry out the terms of the trust at your death of incapacity) should know they’ve been named, what the job will entail, and where the documents can be located. It may also help if they know who the lawyer is that drafted the documents.
Does your successor trustee need to know the specifics of your estate plan?
They may not need to know your net worth or the extent of your assets or liabilities, but they should have some idea of what they will be handling as trustee.
Are the beneficiaries receiving their shares outright or will the trust continue to exist for several years? Is the trustee willing to act for the entire term?
Are there assets requiring special handling such as a business, rental properties, or assets in another state? Is the trustee prepared to handle these? Are any of the beneficiaries individuals with special needs? Are there restrictions on distributions to beneficiaries?
Is the trustee comfortable carrying out these terms of the trust?
If the trust is meant to continue for some time after your death with distributions being made to beneficiaries over time, the trust document should spell out the terms for those distributions. Discuss with your successor trustee your goals for the trust as well. Your estate plan will fail, at least in part, if your chosen trustee refuses to accept the role or doesn’t understand your intent.
Healthcare agent
If you have an advance healthcare directive authorizing someone else to make healthcare decisions for you, please have a conversation with them about how you’d like decisions to be made.
The standard California healthcare directive is useful but not very personal. What does “quality of life” mean to you? What’s important to you in your care — is it staying in your home as long as possible? Being near family? Having your pets with you? Do you have specific religious beliefs that would affect your care? These sorts of things should be discussed with the person you’ve trusted to make decisions for you. You’ll be doing them and yourself a favor.
Your beneficiaries
Whether and what you tell your kids (or other beneficiaries) about your estate plan depends on a variety of factors. If your children are minors, they don’t need to know much, if anything. Depending on the child’s age and emotional development, you may just let them know there is a plan in place and perhaps who their guardian would be in the event of your death. The same might apply if your children are young adults.
• As you age, however, it becomes more important that your children know that you have an estate plan and some of the basics of that plan. You don’t need to tell them your net worth, but they should know who your lawyer is, where your documents are kept, and who you have named to be in charge in the event of your death or incapacity.
• It’s also a good idea to let your children know at least a general outline of your plan—especially if the terms might not be what they expect (e.g. unequal shares, including grandkids or other beneficiaries, or disinheriting someone). Giving the children the opportunity to express their concerns, disagreement, or agreement, while you can make changes goes a long way to eliminating arguments in the future.
Charitable beneficiaries
If you’ve named a charity as a beneficiary under your will or trust or perhaps your IRA, you do not have to let them know. However, it can be a good idea to let them know so you can assure the charity is named correctly and that the gift is put to the use for which you intend it. I’ve seen trusts that name an organization without specifying whether it was to go to the national office or the local branch. The national office usually gets the money, and I’d bet that’s not usually what is meant by the decedent.
• Privacy is often a concern here, as no one wants constant phone calls and solicitations for money. But you can request that the charity keep your name and contact details private and, if you don’t want any follow up, they should abide by that as well. You can also ask your lawyer to notify the charity, obtain the relevant information, and keep you anonymous.
• Under California law, anyone named in your will or trust will get notice of your trust (sent by your successor trustee) and is entitled to a copy of the trust, so eventually the charity will learn of your generosity as will your other beneficiaries. Secrets don’t last forever.
Privacy and discretion are important, but some secrets should not go to the grave with you.
Teresa J. Rhyne is an attorney practicing in estate planning and trust administration in Riverside and Paso Robles, CA. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.” You can reach her at Teresa@trlawgroup.net.