With the economy the way it is, a lot of consumers are turning to self-done estate planning. Even though there are hundreds of articles and blogs out there telling consumers why they need a professional, consumers insist DIY is just fine. Though some consumers skate by without any issues, the more common event is that a consumer’s estate will be paying the price down the road.
Residual Clauses
The number one item left from DIY estate plans is the “Residual Clause.” Since there is no way to know how much your estate will be worth at the time you die, you cannot list actual numbers in your estate plan unless that is really all you plan on leaving. For example, if your Will and Trust state that you leave $20,000 to your kids, but your estate now has $100,000, the courts have to decide what happens to the $60,000 you didn’t account for in your Will after years of inflation.
Residual clauses state something simple, such as “I give the remainder of my estate to….” By just stating this very simple, yet effective phrase, the courts will automatically give the remainder of your estate to the party you list – regardless of how much your estate has grown (or shrunk) since you originally drafted the documents.
- Four Reasons to Use a Living Trust - September 16, 2020
- Avoid These Three Estate Planning Traps - June 29, 2020
- Planning Solution for a Spendthrift Heir - June 15, 2020
