A
s promised after our presentation at the
Farm Bureau’s November 2013 annual
meeting, we will be discussing topics in
the next several issues of the West Virginia Farm
Bureau News based on your questions. The first
of those topics we are going to discuss is wills and
trusts. We will be discussing just exactly what they
are, what they do and how they can help you reach
your planning goals.
Many people are familiar with wills. A person
may have seen a parent’s will, a friend’s will or even
have one themselves. A Last Will and Testament
is a legal document, used to spell out a person’s
thoughts and wishes about their assets and their
family. When the person dies, the will provides
for a distribution of his or her property to family,
friends, a charitable organization or church, or
whomever that person lists in the will. One of the
primary purposes of a will is to reduce confusion
and disagreements among the person’s family after
he or she is dead.
Generally, an attorney would prepare a will for
a person based on that person’s circumstances.
Many attorneys follow a general format for
preparing a will. In fact, there are certain legal
requirements of what is to be in a will and how
it is to be signed. Each state has its own legal
requirements regarding wills, which is why a
person may want to think twice about purchasing a
mail order or online will. All too often, a will like
that may not meet the state requirements.
Even though a will follows a general format, a
person can personalize the contents, including as
much or as little detail and instruction as he or she
wants. Wills are meant to be specific and personal
to each individual, so each will should be crafted to
that person’s own individual situation. No two wills
are exactly the same, because no two people have
exactly the same situation. So, John’s will may be
just a single page, leaving everything to his wife,
kept short and sweet, while Jane’s will may be 10
pages long, leaving property to 12 different people,
with detailed instructions.
A question I frequently hear is, “If I get a will,
do I need a trust too?” The simple answer is: It
depends. A common misconception about trusts is
that they are just for wealthy people, but the need
for a trust does not always depend on a person’s
wealth. Often, it depends on a person’s family
situation. For example, trusts are regularly used
in situations involving a second marriage. For
example, let’s say Bill, a widower, marries Sarah,
a widow. Both Bill and Sarah have children from
their first marriage. Both of them agree that they
want to provide for each other for their lifetimes,
but ultimately each wants his or her own property
to go to his or her own children. If Bill leaves
everything to Sarah, his children would basically
receive nothing. If he leaves everything to his
children, then Sarah receives nothing (except what
she could claim under the law as his spouse). In
this situation, a trust may be the right choice. Bill
can leave all his property into a trust at his death.
Sarah would get the benefit of the trust while she
is living, then Bill’s children would receive all the
property in the trust when Sarah dies.
When thinking about a trust, a person may
want to think about their family’s needs and
circumstances. Is there a spouse or child who is
not very good with money? Is a child in a rocky
marriage that may lead to a divorce? Is there
a grandchild with special needs? Is a person
receiving certain government benefits that may
be disqualified if he or she receives property?
A trust may be right for one person and not for
another. Not everyone’s situation warrants a trust,
but trusts have many uses and are very helpful for
some people.
Watch for more information about specialty trusts
in my next article in West Virginia Farm Bureau
News. In the meantime, please contact me if you
have questions or need additional information.
Emily R. Lambright is a senior associate
in the Charleston office of Bowles Rice LLP.
Licensed as a certified public accountant (CPA),
she has experience in wills, trusts,
estates and business succession
planning. For more information,
please contact Ms. Lambright at
(304) 347-1100.
West Virginia Farm Bureau News 17