Very often, when I prepare wills, powers of attorney, and health care directives (living wills) for clients, some react with surprise when they see the length of the documents. “Why”, they say, “is the will you are preparing multiple pages when my previous one was only 2?” “The document is intended to cover many possible scenarios”, I explain, “not knowing which scenario may in fact occur”. It is not good enough to simply address the most likely ones, especially if your estate turns out to be one of the uncommon ones following your death.
Simple or poorly drafted wills result in expensive will contests. For example, let’s take the decision of designating the executor. The executor is the person who is appointed to be the official representative of the estate. He or she is legally charged with gathering estate assets, paying the debts and taxes, if any, and following the instructions set forth in the will including making final distributions to the heirs. It is a good idea to have one or more backup or alternate executors named in the will in case someone can’t or won’t serve when the time comes.
Most people think that the executor dying is the reason a backup is necessary, but that is just one possible scenario. Frequently I see a will drawn up that states “if my executor dies then I appoint ‘so and so’ to serve”. Let’s say Child A is the executor and Child B is named the alternate. Mom dies and A doesn’t want to serve. No problem. A will step aside in favor of B, right? Except that A is alive and the will only provide that B can serve if A has died. (Note the key term “died”, not refused to serve). So, what now?
Well, B can still serve as the administrator of the estate, but not the executor. Same role and responsibilities but some very important differences. An executor can serve without a bond if the will so provides but an administrator cannot. And that can be an expensive difference. The bond acts similar to an insurance policy. The company issuing the bond will pay out the inheritance if the assets are lost or misappropriated. The bigger the estate the higher the cost, sometimes thousands of dollars. While a bond can be very important, many close-knit families see it as unnecessary. Unfortunately, in my example, there is no choice. Had the will stated that the alternate can substitute if the executor dies or otherwise can’t or won’t serve, then the bond could have been avoided. A very expensive mistake and a reason you want to be sure that the attorney drafting your will is experienced in estate planning or elder law.
For further information and advice on any elder law matter, particularly your will, trust or estate planning documents, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Wills, Trusts and Estate Attorney