Estate planners do encourage clients to be specific with their various bequests within their estate plan. When describing gifts of both real and tangible personal property or defining beneficiaries, we want the assets and individuals to be identifiable. However, it can actually cause problems when clients get too specific and potentially lead to unintended complications when the estate is administered.
Property
When describing real property in your estate plan, you have to decide if you are wanting to leave the particular piece of property you currently own to your beneficiaries or if you are intending to leave whatever real estate you own at your death to your beneficiaries. You will want to convey your intentions to your estate planning attorney so that they can draft your plan accordingly. If you plan to leave whatever “home” you live in at the time of your death to your beneficiaries then you probably do not want to specifically reference the address or legal description of the property you currently own in case you move or sell that property before your death. Limiting such bequest to a specifically referenced address or legal description can cause the gift of real estate to fail and possibly transfer to unintended recipients.
The same is true for tangible personal property. When clients complete their tangible personal property lists, they might include the locations of an item but then move the item or give it away during their lifetime. They might also incorrectly describe the item, making its identity questionable. It is important to try to put yourself in the shoes of your nominated estate administrator and ask yourself, “Is this item/gift clearly defined and identifiable?”
Additionally, when clients make specific cash gifts in their estate plan, they run the risk that there will not be enough cash in the estate to satisfy those specifics gifts. Instead, clients might want to consider making bequests in terms of percentages or shares so that their beneficiaries will at least receive some gift – regardless of how big or small the estate.
Beneficiaries
Another common problem is when clients end up limiting bequests to certain individuals but in actuality intend to include a broader group. For example, grandparents might make a gift to their grandchildren and list them by name but not include a provision to incorporate any grandchildren born, or adopted, after the date of their Will or Trust. While the client prefers to be specific and list the names of their grandchildren, it might actually be easier for the gift to be made in more general terms, such as “to my grandchildren” in order to incorporate any future grandchildren.
Fiduciary Directions
Lastly, sometimes clients want to provide very detailed instructions to their fiduciaries with regards to the administration of their estate and/or trust(s). Being too specific with such guidance can be problematic when it limits the fiduciary’s ability to act in the future when circumstances have changed after the client has passed. Clients might think it is a good idea to list specific instructions to their nominated trustee with regards to the distributions of a trust fund on behalf of the client’s children. These instructions might significantly limit the distributions when, for example, the child is faced with a medical emergency for which they could benefit considerably from less restrictive distributions. While it is certainly advisable to give some guidance to your fiduciaries, clients might want to provide some discretionary authority to their fiduciaries to adapt to changing circumstances.
As clients review their new, or old, estate plans, again, they should put themselves in the shoes of their nominated estate administrators and ask whether the gifts and instructions are clear or whether there is room to interpret the plan differently than what was intended. You might find it could actually be beneficial to leave certain provisions more general than too specific. Be sure to work with your estate planning attorney to figure out the best way to convey your wishes.
