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All I Need Is A Simple Will

Posted by Mary R. LaSota, Esquire in Estate Plan, Uncategorized, Will | 2 comments

Potential clients often tell me, “All I need is a simple Will.”

I always respond, “No Will is simple.”

If you have minor children and the proceeds from your estate will be in the tens of thousands of dollars, then your estate plan should include a trust for the benefit of your minor children. The trust would arise under your Will and go into effect when the proceeds from your estate would likely pass to your minor child.   A minor may be able to own property, but he or she cannot exercise control over that property. Therefore, you need to implement a plan so that the money and property can be managed for benefit of your minor children.

If the proceeds are passing to your minor child, then this means that both you and your spouse are dead. Hopefully, your Will contained a guardian provision. Does that guardian provision appoint an adult to be the guardian of the person[1] and the estate[2] of your child? Hmmm… maybe you should check that right now…. I’ll wait… So maybe you did appoint a guardian of the person of your child, but neglected to name a guardian of the estate of your child. This is when the Orphans’ Court steps in and appoints a guardian (or conservator) of your child’s estate. Now the person who is raising your child, providing food and shelter for your child needs to access those funds to offset the cost. Can he or she simply go the guardian of your child’s estate and request those funds? Not likely. Every action regarding that property will need to be approved by the Orphans’ Court by filing a petition with the court. Don’t forget at the end of every year an annual accounting must be filed with Court. And once your child turns 18, the funds and property are released to him or her. Maybe, the remaining funds only total $1,000… so what. But what if the remaining funds total $50,000, or more. What would you have done with $50,000 at age 18?

Let’s just say your Will appoints a person to be the guardian of the person and a guardian of the your child’s estate with the proceeds of your estate now flowing into an Uniform Transfer to Minor’s Act account (commonly known as “PAUTMA” or “UTMA”). Now the guardian does not have to petition the Orphans’ Court for funds to support your minor child because under the law the custodian of the account can release the funds for the benefit of the minor.

“So, why would I need a Trust?”, you ask.

Keep reading…

Transfer of UTMA account property may be delayed until your child reaches a designated age beyond 21, but not later than age 25. So again, your child could be coming into a lot of money that he or she is incapable of managing. Nor does the Uniform Gift to Minor’s Act provide a plan to distribute the property to your child, as a trust might contain. The Uniform Gift To Minor’s Act contains some guidance for administration and reporting, but the Pennsylvania Uniform Trust Act provides greater oversight of the trustee and more detailed rules for administration and reporting. A trust also can provide protection asset protection, protection against your child’s creditors, protection from possible divorce claims and may even prevent your child from being disqualified from disability benefits and tuition assistance. An UTMA account provides none of these protections.

“Oh, but wait… my Will contains a guardian and a trust for my minor children,” you state.

Have you looked at the contingent beneficiaries of your IRA, your 401K and your life insurance policy? Are your minor children named as contingent beneficiaries?

And here you thought all you needed is a simple Will.

[1]  A guardian of the person is authorized to make decisions about the life of the minor.

[2]  A guardian of the estate (or conservator) manages, protects, preserves and disposes of the minor’s estate, in accordance with the law.

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Comments (2)

    Inspiring quest there. What occurred after? Good luck!

  2. Business Insurance says:

    After reading this post, you are able to tell you’re an expert writer with lots of experience.

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