Optional Provisions of Wills and Trusts
Last Wills and Testaments and trusts are obviously separate instruments. However, they are often complementary to one another. One may choose a variety of different options regarding a will and trust. This post will focus on a few of the options that are more popular.
1. Contingent Trust – Wills distribute property upon the death of the testator. Trusts distribute property under the terms of the trust agreement. Oftentimes, though, a beneficiary of a distribution may be a minor. Alternatively, the beneficiary may be mentally incapable of minding the distribution. In these cases, clients may include a contingent trust. The contingent trust generally states that a distribution intended to a minor or incapacitated person shall be distributed into trust. The contingent trust provides for a trustee and trust powers. Additionally, the contingent trust will terminate once the beneficiary either reaches the age prescribed in the contingent trust or the incapacity no longer exists. Contingent trusts are effective tools to manage the estates of minors or incapacitated beneficiaries.
2. Guardianship – If one has minor children, then it is wise to name a guardian in case the mother and father die before the child reaches the age of majority. Oftentimes, the guardian is named in a will. The guardian can be appointed by a separate instrument, as well.
3. Independent Administration – Although not required, almost all Texas wills contain an independent administration clause. Independent administration allows the executor to more efficiently probate the estate of the deceased. It requires fewer trips to the courthouse and, generally, less oversight from the court.
4. Burial Requests – Although the provision is often called “burial requests,” it should really have another name. For instance, a testator could choose to be cremated instead. If a person desires to be buried, the last will and testament might name the plot and cemetery. Regardless, many attorneys do not recommend adding the burial request to the last will and testament because wills are not typically read until after the funeral. Instead, one should make sure the closest family members know the deceased requests.
5. Tax elections – Both wills and trusts can allow for various tax elections. Examples include generation skipping tax, marital exemption, gift tax exemptions, etc. These elections are often very specific to the testator’s current and expected financial standing. Often, too, it may require input from a CPA or financial advisor.
6. Specific Bequeaths – Wills and Trusts almost always contain a specific bequeath clause. In addition to the standard language, a testator can bequeath very specific property to specific people. Mothers often give wedding and engagement rings to daughters. Fathers pass down gun collections, or family cuff links to sons. Or, perhaps a testator desires to donate items to charity. These would all be included as a specific bequeath.
7. Disinheritance – Additionally, a testator of a last will and testament or settlor of a trust may desire to disinherit a beneficiary. It is a cruel term, but several reasons can be cited for the disinheritance. For instance, maybe one descendant is so much better off that s/he does not need any additional help. Or, perhaps a descendant already received his/her distribution. Whatever the cause may be, the disinheritance provision can be carefully drafted to soften the blow.
The above examples represent only a small number of elective provisions of wills and trusts. For estate planning needs, it is always a good idea to visit with a local attorney.
Robert Newton is an attorney based in Frisco, Texas, that practices estate planning, real estate law, business law, and corporate law. This post is meant for informational purposes only and does not constitute legal advice.