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Estate Planning Requires Clear Direct Language, or Does It?

Estate Planning Requires Clear Direct Language, or Does It

For the most part, there’s no room in an estate plan for vague language, says a recent article, “I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge” from Kiplinger. Using unclear language can lead to confusion, arguments between beneficiaries and a longer, more costly probate process, especially if court intervention is needed to help resolve disputes and clarify your intent.

With that said, it seems like the use of phrases like “I wish,” “I hope,” or “It would be my desire,” known as precatory language, would never belong in a will or a trust. However, there are three instances where this language, considered non-binding, is indeed useful for estate representatives and loved ones.

  1. If you want your beneficiaries to work with your financial advisor or estate planning attorney.
    A recent survey says people expect to consult a financial advisor as part of the expected great wealth transfer as Baby Boomer wealth passes on to younger generations. The same study reports that people will consider working with current family advisors. If this would be your wish, you can communicate this message using precatory language in your last will and testament.

    The language could be as follows: “I desire my children consult with our family advisor, Samantha Smith, or another competent advisor of their choosing in managing their inheritance.”Dealing with the loss of a loved one and managing an inheritance at the same time can be overwhelming. Providing guidance regarding a financial advisor or a trusted estate planning attorney in the will can give family members the relief of knowing whom to turn to when they have questions and need help.
  2. If you want co-trustees to collaborate in making decisions, even if the final decision-making process is ultimately not unanimous.
    Let’s say you’ve named all three of your children as co-trustees. They have an equal platform to express their wishes. However, a child their siblings regularly overrule is likely to feel like their childhood dynamic hasn’t changed even as an adult. Your gentle recommendation reminds them to treat each other fairly, hopefully preserving the bond between siblings and keeping the co-trustee relationship healthy and productive.
  3. You’d like to encourage your trustee to consider certain guideposts when making distribution decisions.
    For example, an independent trustee has the authority to make distribution decisions according to the terms of the trust, which in some cases gives the trustee complete discretion. Unlike the common standard of HEMS—health, education, maintenance and support—discretion provides the trustee with the most flexibility to ensure that the beneficiaries’ needs are met. However, there may be factors you’d like the trustee to consider, such as if the beneficiary has their own wealth or if a need exists that you would have supported if you were still living, like buying a first home.You can guide your trustee with language like this “I encourage my trustee in the exercise of their discretion to consider requests related to educational pursuits” or the like. This will guide the trustee in making decisions while not tying their hands if they decide the beneficiary’s request is not in line with what you wanted.

Estate planning documents should be clear and direct as to where your property should go and who should manage it. However, there is also room to communicate essential guidance from you to your loved ones.

If you need help with your estate planning, book a call with us today. Let us guide you through the process and help you create a clear and effective plan for your legacy.

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