by Bruce L. Dorner
Isn’t it amazing how much our kids earn right out of college? Aren’t you impressed that little Bobby got a job for $55,000 a year and just bought a new condominium? Isn’t it wonderful that at age 25 Suzie and John just bought a starter house for only $295,000! Gee, I wonder if these kids should have wills and estate plans? After all, they only have debts, don’t they?
Well, if you’re a good parent, you will guide these young adults to an attorney’s office quickly. I’m troubled by the number of times I encounter a family in turmoil when an adult child dies unexpectedly without a will. Even if the deceased child wasn’t married, what happens to the new condominium? Who takes responsibility for paying the bills? Who deals with the car payment? What happens with the mortgage? Will the bank foreclose?
These situations become more complex if the adult child was married. Without a will, if the estate is over a certain dollar value, the surviving spouse gets only a portion of the estate and the parents of their deceased child also receive a portion. However, without adequate planning, there may not be enough cash to satisfy the debts. What if the parents really don’t like the spouse of their child? This can also lead to more tension and family squabbles.
Now, let’s add another layer of complexity. Insert minor grandchildren into the equation and now you have a real mess. Without a will, the estate may be divided into pieces so that if Suzie and John had a child, and John dies, Suzie gets the first two hundred fifty-thousand dollars of value in the estate, plus one-half of the remainder. The balance gets set aside for their minor child. Gee, isn’t it nice that the money gets set aside when Suzie really needs the cash now to pay for food for the little tyke! Yes, Suzie gets to be a trustee for her minor child, under supervision of the probate court, and can’t use that money without permission of the court.
Now, let’s go for the frosting on the cake. Change the facts a bit and add in adult children who have been married, divorced, and remarried. I won’t go into the gory details, but suffice it to say that determining who gets what piece of the pie is generally best performed with a flow chart of the family tree with his, hers and ours offspring.
So, with all these potentially troublesome outcomes, how do you protect your adult children? Easy! Prepare a will that establishes the flow of assets that best suits the family situation. And, best of all, as the family grows and changes, you simply change the will. Remember, wills are merely pieces of paper. We stopped using stone tablets a long time ago!
Now that you’ve given thought to helping your adult children, when was the last time that you reviewed your own will to make sure that it fits your current family structure?