When you are young and carefree, responsible for no one but yourself, it’s pretty easy to get by without a will. You probably don’t even really have any property to speak of, not that requires a will to distribute anyway.
But as most young people do, you eventually decide to settle down and start a family. You may get married, get a real job with a pension, buy a home for your growing family. And as many people do, when you start down the road to domestic bliss, you start thinking about the day you will no longer be around to care for them. Sure, you’re still young, but starting a family changes your perspective about your responsibility to those around you. The fact is, none of us has a guarantee to be around next year, the next day, the next hour. Looking at your young kids, you start to wonder: what will happen to them if you’re no longer around?
I know you’ve probably heard pitches like this a hundred times, trying to scare you to get your will done now, before it’s too late! So you will probably be surprised to hear my answer: from the perspective of inheritance, probably not much. The truth is, like all states, Louisiana has rules for “intestacy;” that is, dying without a will. Those rules are designed as a backstop to prevent chaos resulting from an untimely, unexpected death.
But that protection is meant as a last resort, and it only goes so far.
If you are married with kids and you die without a will, your spouse automatically gets the use and fruits (“usufruct”) of your share of the property for the rest of her life or until remarriage, and your children get the remaining interest. Your spouse is already the natural guardian of your children, so nothing changes there. And if your children are still minors, your spouse will continue to manage the property which, hopefully, will not fall into their hands until well into adulthood.
So for the most part, if you die with no will, protecting your spouse, providing for the care of your young children and distributing your property looks very much like it would look if you do have a will. But that doesn’t mean you don’t need estate planning advice. Your will is not really designed for circumstances more or less already covered by intestacy. It is really designed for another possibility: your spouse’s untimely death.
It may be improbable, but common accidents that take the lives of both spouses do happen. Or, a family may have a run of ill luck where both pass away from unrelated causes within a few years or even a few months or weeks of each other. In that instance, a well-drafted will protects the young children who survive their parents in several important ways.
Perhaps the most important aspect provides for guardianship of the children. Naming one or more successive guardians in your will can clarify your intentions and prevent a pointless and costly contest among several relatives filing competing claims with the court.
The guardianship decision is a simple, one sentence declaration in your will. But it will have the most impact on your kids for the rest of their lives, and many factors need to be considered. Many clients will off-handedly suggest their parents be named guardian. It’s all well and good that the kids get along best with their grandparents, but think about it: do your parents have the vitality to take care of rambunctious young children full time? Wills are meant to provide for the future; situations that may not happen for years. If you have young children now, how will your parents manage unruly teenagers — perhaps rendered more unruly by the untimely deaths of their parents — when your folks are in their sixties or seventies?
Depending on your priorities, other factors may be just as important. Does your intended guardian share your religious preferences? If you want your children to attend regular services one or more times a week, you may want to make sure the intended guardian shares not only your beliefs, but your devotion to them.
Where your intended guardian lives may be very important. New Orleans has a sizable foreign-born population. I have many clients who come from overseas and express a desire that if they die, they want their children to return to the country they hail from. It isn’t uncommon that parents who moved to Louisiana from abroad years ago have not considered the fact that their young children have little or no recognition of their home country. I encourage these parents to think about how children may feel, after losing their parents, being shipped away to live in a country they’ve never really known, with a culture and language they barely understand.
Finally, lives change. People move away. Friendships, even close ones, fade when neglected. Perhaps you chose your intended guardian because they have one child who is close friends with your child, but as time passed now they have their hands full with four. If it is possible, it is important to have a deep bench of successive guardians in case circumstances for you or your intended guardian change.
The next consideration is what happens to your property. Should you and your spouse die without having a will and your children are minors, they still inherit your property in full ownership regardless of their age. In that case, your estate may deplete thousands of dollars in a contest between competing trustees seeking to control the finances of the children. You can avoid that simply by adding a provision to your will, called a “spendthrift trust,” that not only provides for the management of your estate for the benefit of the kids, but also protects them from themselves by insulating your estate from their creditors. Who will manage the trust for the children, called the “Trustee,” may be but is not necessarily the same person as their guardian. That decision too can implicate a number of factors you may or may not have considered.
For the sake of simplicity, you may elect to have the same person act as the kids’ physical guardian and their trustee. That does simplify things, if that person is multi-talented. This person may be really good for reading bedtime stories every night, kissing boo boos when the kids hurt themselves playing, sitting up with them to make sure they understand their homework. Do they also have any training as a financial adviser, or perhaps just innate financial wizardry? If so, congratulations. You’ve found the perfect candidate to wear both hats as Guardian and Trustee.
If not, you may want to consider assigning those roles to different people. In that case, you will want to ask yourself about the candidates’ ability to work as a team for the common goal of raising your kids in your absence. It takes more than getting along, and you need to consider that the dynamic of their relationship may change dramatically with their new jobs and the fact that you are no longer in their lives to act as a balance.
Before you finalize designating representatives with your lawyer, make sure you ask their permission first. I encourage my clients to take their time in these decisions, weigh them carefully. Speak with your lawyer to get a thorough understanding of what the roles entail, give it some thought, and feel free to come back and ask if questions occur to you that you hadn’t previously considered. Speak with them about their appointment, and make sure the intended recipients are prepared for the job. It is easy for them to agree when you stand before them hale and hearty and the impact is a distant and remote improbability. It is a ton of bricks when they get the call from your lawyer asking for a meeting that will change their lives forever.
And now, re-reading what I wrote, I am afraid I’ve made all these decisions sound overwhelming. They shouldn’t be. You need to think carefully about these choices, and in ways you probably didn’t consider before speaking with your lawyer. But remember: you can always change your mind. Wills are meant to be living, breathing documents that accommodate change. But if there is an unforeseen development, remember they can be changed relatively easily. Don’t expect you need to anticipate every possibility. If your intended guardian moves across the country unexpectedly, or you find out your “financial wizard” friend who you intended to name Trustee is actually on his third bankruptcy, you can take them out of the role with a quick review and amendment that need only take a few minutes. The important thing is to stay on top of things, and stay mindful and revisit what your will says as changes accrue throughout your life.