An estate plan is a comprehensive strategy for managing a person’s property, assets, and obligations upon death or incapacitation. This plan encompasses personal items, bank accounts, real estate, stocks, securities, and other valuable assets. A well-structured estate plan minimizes tax burdens on loved ones and eliminates the need for lengthy probate proceedings.
Estate planning often involves wills and trusts, which are legal instruments for managing and distributing property.
A will is a legal document, either written or oral, outlining the disposition of assets after the owner’s death, specifying beneficiaries for each asset.
A trust is established by the property owner, who appoints a trustee to hold the legal title to the property and distribute trust assets accordingly.
In addition to wills and trusts, an estate plan may address various other concerns, such as the following:
Medical Treatment Preferences for the Testator (Estate Owner)
An estate owner, John, has strong beliefs against life-prolonging measures, such as artificial ventilation and feeding tubes. In his estate plan, John includes an advance healthcare directive (also known as a living will) outlining his desire to avoid such treatments if he becomes terminally ill or permanently unconscious.
Organ Donor Status
Jane, a firm believer in organ donation, wants to ensure that her organs are donated upon her passing. She specifies her organ donor status in her estate plan and authorizes her executor to carry out her wishes accordingly.
Appointment of a Person to Make Legal and Financial Decisions if the Testator Becomes Incapacitated
Mark has been diagnosed with early-stage Alzheimer’s disease. To prepare for the possibility of his eventual incapacitation, he designates his daughter, Susan, as his durable power of attorney for finances and healthcare. This authorization allows Susan to make legal and financial decisions on Mark’s behalf when he cannot do so.
Guardianship of the Testator’s Minor Children
Sarah and Tom have two young children. In their estate plan, they nominate Sarah’s sister, Emily, as the guardian of their children in the event that both Sarah and Tom pass away before the children reach the age of 18. This estate plan ensures that Emily has the legal authority to care for and make decisions on behalf of the children.
Succession Planning for the Testator’s Business Interests
David is the owner of a successful family business. He outlines a detailed succession plan in his estate plan, designating his eldest son, Michael, as the successor to take over the business upon David’s death or incapacity. This plan includes provisions for buy-sell agreements, training, and mentoring to ensure a smooth transition of leadership.
Funeral Arrangements and Specifications
Angela has specific wishes for her funeral, including her preference for cremation, the scattering of her ashes at her favorite beach, and the type of memorial service she desires. Angela provides detailed instructions for her executor to follow in her estate plan, ensuring that her final wishes are respected and carried out.
What Is a Conditional Gift?
A conditional gift refers to a provision within a will that dictates the distribution of money or property from the estate only upon the occurrence of a specific event. For example, a testator may leave a sum of money to their grandchildren, contingent upon them graduating from college before turning 25 years old.
There are two fundamental types of conditions that can be placed on gifts in wills:
- Condition Precedent: This condition must occur before a gift is made. To be enforced, such a condition should specify a reasonable time window. The example above illustrates a condition precedent, as the beneficiary must graduate college within a certain timeframe to receive the designated funds.
- Condition Subsequent: This condition applies to gifts given unconditionally but can be revoked if a particular event transpires. However, enforcement of such conditions can be challenging due to their open-ended nature. For instance, a testator may leave land to a beneficiary, with the stipulation that they may never sell alcohol on that property.
Courts will not enforce conditions that mandate illegal activities, require a beneficiary to marry or divorce someone specific, or necessitate a beneficiary to change their religion.
What Are the Limitations of a Will?
Despite the importance of a well-written and legally valid will, there are certain limitations. For example, wills cannot transfer property that the testator does not own or transfer property to pets. Modifications to a will must specify which parts are being amended, and if the testator wishes to change the entire will, the previous one is considered revoked or canceled.
Challenging or contesting a will is only possible for individuals with legal standing, such as interested parties who stand to gain or inherit from the will.
Grounds for contesting a will include the following:
The Testator’s Lack of Mental Competence During the Will’s Creation
Emily’s elderly father, George, suffers from advanced dementia. Emily’s brother, Paul, convinces George to create a new will that leaves the entire estate to Paul. After George’s passing, Emily challenges the will, arguing that their father did not have the mental capacity to understand the nature and consequences of the new will when it was created.
Duress or Coercion Influencing the Testator’s Agreement to the Will’s Terms
John, an elderly man, relies heavily on his caregiver, Karen, for daily assistance. Karen threatens to stop providing care for John unless he alters his will to leave her a significant portion of his estate. Fearing for his well-being, John reluctantly complies. After John’s death, his children contest the will, claiming that their father was coerced into making the changes under duress.
The Existence of a More Recent Will That Supersedes the Original
Mary had a will drafted in 2010, leaving her assets to her two children, Peter and Susan. In 2015, after the birth of her third child, Mary created a new will, which divided her estate equally among her three children.
After Mary’s death, Peter and Susan locate the 2010 will and attempt to probate it. However, Mary’s youngest child, Laura, contests the will, providing the 2015 document as evidence that it supersedes the 2010 will.
Do I Need an Attorney for Conditional Gifts in Wills?
If you want to include a conditional gift in your estate plan, it’s important to seek advice from a competent will attorney. They can guide you on the laws related to conditional gifts in your state and suggest acceptable and enforceable conditions.
Suppose you are the recipient of a conditional gift from a will. In that case, a lawyer can assist you in evaluating the enforceability of the condition and advise you on the next steps to take. They can also represent you in court if required.
LegalMatch is an online service that connects individuals with experienced attorneys in their area. Use LegalMatch’s platform to find an estate planning attorney who has experience with conditional gifts.
You can provide information about your case and legal needs, and LegalMatch will match you with attorneys who fit your criteria. From there, you can review their profiles and choose the attorney who best suits your needs.
Use LegalMatch to find the right attorney for your needs today.
