WV Farm Bureau Magazine April 2014 | Page 17

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