When doing it yourself can cost much more

Legal issues

Dear Jonathan: I am naming my sister as one of my beneficiaries in my last will and testament. I am signing the will at my home since it is hard for me to get out. I know I need to have two witnesses. My question is whether my sister can act as one of those witnesses.

Jonathan Says: It depends upon the law of the state in which you live. Some states allow interested parties, i.e., someone who is named as a beneficiary in the will, to also act as a witness without invalidating the gift to that individual; some states do not. You need to check with an attorney in your area as to the laws and requirements of your state when it comes to witnessing wills.

Dear Jonathan: I am a single mom. I am preparing a trust so that if something happens to me prematurely, my assets will be held in trust on behalf of my three young children until they reach age 30. By that time, I figure, they should be mature enough to handle whatever money they get from my estate.

I do have one concern though: how much flexibility does the trustee have in making distributions to my children? In other words, even though each child is not to receive his or her respective share of my estate until he or she reaches the age of 30, what if one of them needs money before that? Does the trustee have the authority to make need‑based distributions to a child prior to his or her turning age 30?

Also, if the trustee has the authority to makes these types of distributions, how do I make sure that all my children are treated equally? If one of them receives distributions before he or she reaches age 30, won’t the amount of that distribution reduce the amount available for my other children? I know if I call a lawyer in my area I could get the answers to these questions, however, I am trying to prepare this trust on my own so that I do not incur a large legal bill, so whatever help you are able to provide would be greatly appreciated.

Jonathan Says: I am happy to answer your question, but I recommend you rethink your decision to draft your trust on your own. Drafting trusts and other estate planning documents can be complicated for attorneys, let alone a lay person, and you want to make sure that these documents are not only drafted properly but in compliance with state law so that they are effective when you need them to be effective. The last thing you want to do is have the trust fail or end up in litigation if it is not prepared properly or it has ambiguous provisions.

My suggestion is you at least contact estate planning attorneys in your area and find out if any of them are willing to meet with you for a free consultation (some attorneys are willing to do this), and then once you meet with them, you can explain to them your financial concern and my guess is that you will be able to find an attorney who will be willing to work with you.

Having said the above, in answer to your question, you can draft the trust so that the trustee has the discretion and the flexibility to make distributions to your children for things like educational expenses, helping them buy a car or a home, helping them with the expenses of getting married, as well as for other legitimate purposes if it becomes necessary in the trustee’s judgment to expend the money on behalf of the child prior to his or her reaching the age of 30.

As for your other concern, you must include language in the trust that states which distributions made to a child prior to his or her reaching age 30 are to be treated as advancements against that child’s share so that when distributions are ultimately made to that child, his or her share is reduced by the amount he or she received before age 30. By putting in this type of provision, any child receiving such an advancement will not be benefitted at the expense of your other children.

Please consider meeting with an attorney to help you with the drafting of your trust. Also, besides a trust, there are other important estate planning documents you should consider drafting, including a last will and testament, and financial and health care durable power of attorneys. Good luck.

Jonathan J. David is a shareholder in the law firm of Foster, Swift, Collins & Smith, P.C. in Grand Rapids, Mich.

Rendered 07/16/2024 20:23