Dear Jonathan: I have two children and I am going to divide my estate equally between them when I die. The problem, however, is that the value of my house represents the bulk of my estate and my daughter has expressed an interest in receiving that as part of her inheritance. How do I give my daughter the house and still treat my children equally?
Jonathan Says: In the correct governing document, whether it is a will or a trust, you would state that your estate is to be divided equally between your children and that your home is to be distributed to your daughter as part of her share of the estate. You would further state that if the home exceeds in value the share your daughter is supposed to receive, then she will be required to reimburse your estate for the difference. For example, if your daughter’s share is worth $250,000 and your house is valued at $300,000, then your daughter would be required to reimburse the estate for the difference, i. e. , $50,000, half of which she would end up getting back as an equal beneficiary of the estate.
To make sure that your documents and this provision in particular are prepared correctly, I encourage you to meet with an estate planning attorney who can guide you through this process. Good luck.
Dear Jonathan: I am in a rather curious situation. I am a widower and I have two children, a son and a daughter. I am going to be updating my estate planning documents in the near future and it was my intent to name my son as my fiduciary on all of my documents, which will mirror the documents I prepared a few years ago when my wife was still alive. Those documents include a financial durable power of attorney, a health care durable power of attorney, a will and a trust. When I discussed this with my son, he told me that he really was not interested in acting as my fiduciary under any of these documents. Although he gave me a variety of reasons, most of which made sense given his current life circumstances, I was disappointed. The problem is that if my son won’t act, that only leaves my daughter, who although I love dearly, is totally irresponsible and really don’t want to put her in charge of any of my affairs. So I am at a loss as to what I should do. Any thoughts?
Jonathan Says: If your son is unwilling to act and you don’t want to name your daughter, then the only thing you can do is go outside of your immediate family and find someone else who you trust to act as your fiduciary in those various capacities. It could be a relative, a friend, a business associate, or even a professional. Whoever you choose will need to be someone that you can trust to make financial decisions for you under your financial durable power of attorney, make health care decisions for you under your health care durable power of attorney, and to manage your trust when you are no longer able to do so.
You also might consider asking your son whether he would be willing to be named as your first choice as fiduciary with the understanding that if, when the time comes for him to act, he is unable or unwilling to act, he doesn’t have to. This presupposes that you are able to find someone who is willing to act as your son’s back-up and understands that it is likely that he or she would end up acting as your fiduciary because your son will probably refuse to act on your behalf.
Good luck.
Jonathan J. David is a shareholder in the law firm of Foster, Swift, Collins & Smith, PC, 1700 East Beltline, N.E., Grand Rapids, Michigan 49525.