Estate Planning Considerations for Mothers

How should a mother provide for her children in her will?  A recent article asks this question, pointing out that many women live alone and need to make decisions on their own, and not with a spouse or partner, regarding their estate planning, finances, and inheritance for their children.

“There are 26.7 million women who are aged 65 or older, according to the 2016 profile of older Americans by the U.S. Department of Health and Human Services. Nearly half (46%) of women who are aged 75 or older live alone. These women have homes, financial resources and children, requiring them to make these decisions on their own.”

The author points out that a mother’s desire to treat her children “equally” in her estate planning, may not match the realities faced by her children.  “For many, dividing the inheritance equally among their offspring is a deeply held value. But it isn’t always easy: What if one child is a successful professional with a good pension plan, and the other is a struggling artist who may never have adequate health coverage? Or perhaps one daughter has a special-needs child, and the other has chosen not to have children? What then is the process of balancing their value of equal distribution and the contradictory need to make financially realistically decisions?”

 

Finally Writing a Will

Here’s a journalist’s take on getting (his long put off) estate planning documents in place:

What it was Like to Finally Write My Will, by John Schwartz.

And here’s Mr. Schwartz’s “To Do” list from this piece.  Of course, I recommend always having a lawyer prepare your documents!

“Get a will. Really. Dying without one — “intestate” — is a drag for everyone.

Get a lawyer. Unless your life is wonderfully uncomplicated, you’ll want the help of an adviser. Even if you do it yourself, have an attorney look over your work.

Decide on your beneficiaries, and make sure your insurance policies and other investments are in agreement with what your will says.

Name an executor. It’s a tough and thankless job, so get someone with good judgment; this person can be paid out of your estate.

Got young kids? Name a guardian. If not, the courts will appoint one; why not take care of this essential matter ahead of time?

Secure your paperwork. Once the documents are done, put them in a safe place and make sure your relatives know how to find it.

Revisit it every five years. The world changes; your will should, too.”

This is a great starting list, but I also add:

Get Advanced Directives.  Have decision makers in place in the event of incapacity.

Put a Trust in Place for Minors.  Make sure you protect your children’s inheritance until they are at mature ages.

Dying Without a Will: Indiana’s Default Estate Plan

Indiana law provides a “default” estate plan for you, if you do not have a Will at your death.   This is called an “intestate” estate.

Does Indiana’s default plan match your intentions to provide for your loved ones?  Here’s a guide to determine what the law would provide if you died without a Will in Indiana.

First, a look at your estate plan if you are not married:

Not Married and without children:  Indiana law provides for your estate to be distributed, in equal shares, to your surviving parents and siblings.  Each of your surviving parents will receive no less than one-fourth of your estate.

Who does this default “plan” exclude?  Everyone else.  Only your brothers and sisters (or their children, if a sibling dies before you) and your parents will receive your estate.  A significant other, regardless of years together, will be excluded, as will lifelong friends or caregivers.  Each sibling will be treated equally, regardless of whether your relationship with that sibling was a good one.

Not Married, with children:  Your children will receive your estate, in equal shares.

Who does this default “plan” exclude?  Again, everyone else.  Only your children, in equal shares, will receive an interest in your estate.

In either of these situations, dying intestate as an unmarried person means that friends, other relatives, significant others, and charities, are completely excluded from your “default” estate plan.