A good friend of mine walked into the office the other day and said, “Hey, can you read over my pour-will and trust?” After a quick read-through, it was clear that her will lacked adequate flexibility, a problem that plagues many out-of-the-box wills and trusts.
Here’s how it goes down: Client walks into a large real property law firm and says, “I need a will.” At this point they will be directed to fill out a client interview form asking them to list all of their assets. After completing the boilerplate client interview, an attorney will sit down and run through a checklist of issues, explaining anything that the client may not understand. The attorney then pulls goes to the firm’s “form bank” and begins pulling standard clauses from older forms until she has a will that seems to properly effectuate the client’s intent of disposition.
Ok, so far, so good, right? Well, not exactly. Many times the client has tunnel vision and fails to consider that the circumstances as they exist today may not continue unchanged until death. For example, let’s say that Mrs. Jones has two children, Bill and Suzy. Bill is 25 years old, single, with no children. Suzy is married and has three children. Mrs. Jones has $1.2MM in assets, $800,000 of which is the equity in her home. She also claims $200k in an IRA with her children as beneficiaries. Additionally, she has $200k in a personal checking account. Mrs. Jones says, “I would like my children to share all my real property (the house) and my grandchildren to share any remaining cash.” Alright, Mrs. Jones we can certainly do that and the standard form used by the firm can easily be pieced together to accomplish this objective.
But wait. … Let’s just suppose for a moment that Mrs. Jones retires 5 years from now and shortly thereafter ends up selling her current house, never thinking how this may affect her testamentary desires as set-forth in her will that was crafted years before. Although she is currently looking to buy an even bigger house in Florida so that she can retire in style, she never got around to purchasing the new house before she dies two years later of a heart attack. The result is that Bill ends up with $100k, while Suzy and her children end up with a windfall. What now? Possible litigation nightmare? A family torn apart? This is typically a result that no one is happy with, and one that could have been avoided had the attorney written the will providing the sort of flexibility that allows for ultimate disposition to most closely effectuate the testator’s intent, while also recognizing that circumstances may change over time.