When providing what should happen to your property upon your death, language in an estate plan should be clear, direct and unambiguous. Using unclear language can lead to confusion and disagreements between beneficiaries and a longer and more expensive probate process.
Kiplinger’s recent article entitled “I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge” says it would seem that using phrases such as “I wish,” “I hope” or “I desire” — known as precatory language — would never belong in a will or trust. However, there are three important cases where it can be helpful to include non-binding guidance for your loved ones and estate representatives.
- You want to encourage your beneficiaries to work with a professional. Baby Boomers will pass on more than $70 trillion in wealth to younger generations. Working with an adviser can help preserve and protect assets and set beneficiaries up for a positive working relationship with a trusted professional. If you have a great relationship with your financial adviser and estate planning attorney and want to encourage your beneficiaries to consider working with them, your will could be a great way to communicate this message. Consider the following wording:
“I desire that my children consult with our family adviser, Sally Brown, or another competent professional adviser of their choosing to manage their inheritance.”
Putting language in your will that encourages your loved ones to take action and meet with an adviser to help manage their inheritance could be just the reminder they need to set an appointment after you pass.
- You want to encourage your co-trustees to collaboratively make decisions, even if decision-making isn’t unanimous. For example, if you have named three or more co-trustees, you may have said they act by majority consent to streamline the decision-making process. You can express a desire to see your trustees work through decisions constructively and collaboratively — even if their final decisions aren’t made by unanimous agreement.
- You want to encourage your trustee to consider certain parameters when making decisions about trust distributions. A typical trust arrangement gives an independent trustee the power to make distribution decisions to beneficiaries at their sole discretion. This gives the trustee the most flexibility to ensure that the beneficiaries’ needs are met to the appropriate extent. You can add factors for the trustee to consider in exercising their discretion, such as if the beneficiary has ample funds apart from the trust funds or if the particular need at stake would likely have been supported were you still alive. Giving your trustee some guidance (“I encourage my trustee in the exercise of their discretion to consider requests related to educational pursuits”) can help them make decisions, while simultaneously not tying their hands if they ultimately decide a different route is in the beneficiaries’ best interest.
Your estate planning documents should be clear about where your property should go on your death and who should manage it. When appropriately used, precatory language can help communicate essential guidance to your family.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: Kiplinger (March 21, 2023) “I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge”