We all have an idea of what we would like to happen to our assets after we are gone. We want them to help our children and grandchildren have a better life. Perhaps we want them to help our community.
Often, people focus on the current situation of their assets and beneficiaries, without taking into consideration that their wishes may not be implemented for many years to come. For example, let’s say you want to leave your assets to your two children, Mary and Johnny, who are now in their early teens. Mary loves spending time at the lake house and Johnny enjoys spending time with his friends in town. So, in your estate plan, you specify that Mary should get the lake house and Johnny should get the house in town, which are both worth about the same amount. Your death may occur decades later. Mary has grown up and married and has kids of her own. They live thousands of miles away. Meanwhile, Johnny’s maturation has taken a different path. He and his kids now spend a great deal of time at the lake house. In fact, his youngest is an avid conservationist.
In addition to the changes in interests, the lake house and the home in town have changed in value over time. The lake house is on several acres and the land around the lake has appreciated rapidly due to development pressure. What once was a modest home worth $50,000 is now a prized lakefront parcel worth $500,000. Conversely, the home in town which was worth $50,000 is now only worth $100,000. While it was in the prime residential neighborhood a generation earlier, it now is in an area past its prime, with crumbling infrastructure.
Whenever you are dealing with assets of value, it is well to consider that tastes, desires, and values may vary considerably over time. A qualified estate planning attorney can help you achieve your goals while drafting flexibility into the estate plan. For example, this plan could have divided the assets equally, but have specified that Mary could elect to have her share first satisfied by the lake house and Johnny could elect to have his share first satisfied by the home in town.
Nadine Gordimer, the winner of the Nobel Prize for Literature, said “Time is change; we measure it by how much things alter.” A qualified estate planning attorney can help you put a plan in place that can stand the test of time.
Compliments of the McGee Law Firm, Attorney Brandon McGee
Written By: The American Academy of Estate Planning Attorneys