Plenty, believe me.

Over the past twenty-seven years, I have seen so many ingenious ways to make things go wrong I am almost to the point where I think I have seen them all.

But people keep surprising me. Let me give you a few examples, all of which actually happened right here in Hawaii.

The kids beg Mom to deed the house to them: “Don’t worry, Mom, you can stay here ’til you die.” Six days after Mom deeds the house to them, the kids kick her out.

Mom and Dad have three wonderful children. Mom dies first. Dad...

The starting point is to get you motivated to sit down and do something.

While we all know we are not going to live forever, there are a surprising number of excuses out there that prevent many of us from doing anything about making a will. Here are a few of my favorites: “If I make a will, that’s the first nail in the coffin and I know it’s just accelerating my death.”

“Why make a will? My spouse gets everything anyway. Right?”

“It costs too much.”

“Probate and taxes? Nah—not for me. They’re for the rich, and I’m...

At this point in the book, you’re probably just itching to go out and do something, despite what I told you earlier about not doing anything quite yet. One compulsion that many people seem to have is to add someone else’s name to an asset—like adding a son’s name to the checking account, or a daughter’s name to the house, or a husband’s name to the stock brokerage account.

I’ll bet that if you look at the sheets that I asked you to prepare a couple of chapters ago (you did do that, didn’t you?) you will see that...

At this point you’re almost ready for those ugly twins, probate and inheritance taxes, because you’ve heard that they can really hurt your heirs—and you are right. But before we get to them, let’s look at other expenses when you die that might not be as easy to avoid as probate and inheritance taxes.

Q: Aside from probate and inheritance taxes, what are some of the other typical expenses that a family needs to prepare for when someone dies? I realize that these will vary considerably, depending upon the family, but could you give a general checklist? A: You’re...

This stuff can get confusing, and it’s easy to get rattled. Before we start, a little levity. I remember one lady who was telling me to be sure to include in her will that she wanted to be cremated. When I asked if she wanted the ashes scattered at sea, she quite seriously replied, “Oh good heavens no. I can’t swim.” Okay. Here we go.

Q: I’m single. I have a will, but I do not have a living trust. My friends tell me that I am going to go through probate when I die. What is probate, and if...

Q: As I understand it, there are two “problems” when you die: probate and inheritance taxes. I think I have probate under control.

But how does the inheritance tax law work? A: Inheritance taxes are the major impediment to your heirs receiving l00 cents on the dollar.

First for the good news: any assets you leave to your spouse or charity are completely free of inheritance taxation, no matter what their value. These deductions are called the “marital deduction” and the “charitable deduction,” and they are unlimited in amount. So if you have $50 billion and leave it to your...

At this point you know that living trusts avoid probate when you die, and that for married couples trusts are used to double the inheritance tax exemption. All that is somewhat theoretical. Now let’s get down to the actual nitty-gritty. Once the trust document is signed in the attorney’s office, what do you do next?

This is the area referred to as “funding your trust.” Remember that the reason these trusts avoid probate is that when you die, there are no assets actually registered in your name and therefore there is nothing that needs to be probated. Where did all...

Before we move on, let’s look at a common question. Once the inheritance tax is paid or (we hope) avoided, does the recipient have any further tax when she receives the inherited wealth?

Q: When my father dies, I will inherit about $300,000, made up of stocks, his bank account, and his home. Once I receive these things, do I have to pay any taxes? A: Finally, some good news. As an inheritor you do not need to pay any taxes on the wealth you inherit. For example, you do not need to declare this wealth as income on your...

Q: I notice all kinds of exotic devices to reduce taxes: generation-skipping trusts, personal residence trusts, charitable remainder trusts, family limited partnerships, etc. To be honest with you, many of these things are very confusing and get me all tied up in knots. In your experience, what are the most frequently used tricks of the trade to reduce inheritance taxes?

A: You’re right: some of this stuff can really get confusing. I’ve noticed over the years that clients seem to focus on four things with respect to their inheritance taxes: first, live as long as you can; second, do nothing...

At this point, it is entirely possible that you are lost. Let’s have a one-sentence review. Living trusts avoid probate 100 percent; living trusts for married couples not only avoid probate, but also allow the couple to leave two exemptions-worth of wealth to their heirs; if you have more wealth than exemptions, go see a lawyer. That’s it. We are not going to talk about avoiding probate or inheritance taxes anymore. We are going to assume that you have done those things.

Now we have to ask: what words are you actually going to put into your will and trust...

It’s always a delight for me to arrive at the embarrassing point in a conference and have a wife ask (shyly if the husband is in attendance), “Hey, if I die and leave everything to my husband, I don’t want him remarrying and his new wife getting all my money.” (It’s usually the wife who mentions this. You’d think she would pity the next wife rather than blame her!) Anyway, here’s how to handle the problem.

Q: I’m worried that if I die and leave everything I have to my husband, he may remarry and then make a will that...

The challenge is clear. You want to provide for your new spouse, but you also want to protect your children. If you just give your wealth to your new spouse without any strings or conditions, your children may never get it back—especially if your spouse has children of his own.

In other words, this problem is exactly like the one in the preceding chapter about the remarrying spouse. And both problems have the same solution: the trust.

Q: I am thinking about getting remarried. I have children from my first marriage, and she has children from her first marriage....

Think about this for a minute. Let’s say you have a house and when you die you leave it to your son with no strings attached. He will then own it and can do anything he likes with it. While he is living, he can sell, rent, mortgage, or burn it to the ground. When he dies he can leave it to his wife, to one of his kids and not the other, or to the dog catcher. But let’s remember that it’s your house, so that if you don’t like what he might do with it you can put...

Q: My lawyer recommends that I use “generation skipping” in my will. But I don’t want to skip my children and leave everything to my grandchildren. Now I’m really confused. But my lawyer says that there are some benefits to generation skipping. Can you explain what they might be?

A: Most people, like you, want to leave everything they have to their children. This is completely normal and usual, but, believe it or not, it can be improved upon.

To keep it simple, let’s suppose you have one child, who in turn has two children.

Think about this. If you...

A surprising number of clients tell me that they are not too happy with their children’s career choices or work ethic. Must be something in the water! (I’m sure wenever disappointed our parents—well, perhaps not more than in the usual ways.) Although there is a fairly easy way to try to get your kid motivated—as shown in the next Q and A—you might remember that some people just take a little longer to mature and settle down than others. So if you’re really intent on doing something about this in your will, be careful to leave an...

Q: I want to leave some money for my grandchildren when I die, but since they’re young I want to be sure they don’t get it right away. What are my options?

A: You have three options, and the first option is not very good. The first option is simply to leave the money to an adult (like the grandchild’s parent), without any explanatory language, and hope that the adult will “understand” what the money is really for. The reason this is not a very good choice is that sometimes the adult will “forget” that the money is supposed to...

Q: My parents recently died and all of the children have a million questions. Who do we go to for help?

A: There’s one person who is in charge whether you know it or not—and that person is the executor, or “personal representative.” The personal representative would have been named in your parents’ wills or, if they didn’t have wills, then state law says that you children can select one or more of you to be the personal representative.

The personal representative stands in the shoes of your parents, and that’s the person whom you should direct your questions...

You can. And if I were sadistic I would encourage you to do it because when things go wrong—and they almost certainly will—it will take a lot more money to fix it up than it would have taken to do it right in the first place.

This is not an area for do-it-yourselfers. There are just too many people looking over your shoulder when you die for you to make even the slightest mistake. The innocent omission or addition of even one word can have a huge effect. Let me give you an example.

One gentleman of my...

If you are now convinced that you need some help here, your next question will probably be: “How much is this going to cost me?” I get this inquiry every day of the week, and here is how I answer it. I am sure you will get pretty much the same answer from any lawyer you call.

Q: We have been thinking for some time of making a will and maybe a living trust. However, we’ve been afraid to contact a lawyer because we are worried how much it might cost. How much do these things cost?

A: Let me...

It’s a jungle out there. All kinds of things are ready to bite. For example, who can really make sense out of the different kinds of trusts which are floating around and which are so confusing that we lawyers commonly refer to them by their acronyms only—like (get ready) RLT, QTIP, QPERT, QDOT, PofA, ILIT, CRAT, CRUT, GRIT, GRAT, and GRUT. No, I am not making this up—these are all acronyms for trusts that might be used in highly specialized situations for people probably completely unlike you and me.

My feeling is that this area of wills and...

You can learn a lot about human nature by working in this area, and one thing I have learned is that there is one absolutely foolproof way of motivating people: money. Dangle some in front of their noses and they will follow you anywhere.

So it’s not much of surprise that I get a lot of older clients who come in to see me because their kids are shoving them in. The kids aren’t stupid—they’ve figured out that there is right way and a wrong way to do things. Since they are standing in line as the recipients of...

Actually it’s not the will that causes trouble; it’s the heirs who do not get what they think they ought to be getting. Or when they think they ought to get it (remember the lady who wanted her teenager to get the inheritance at age 65?). Or how they ought to get it (remember the child whom his parents tried to motivate by insisting that he gets nothing unless he completes college?). In each of these cases, an heir can get angry, and an angry heir is likely to do what many of us Americans do: sue!

Now while it...

Here is an area that none of us wants to think about, but one that we know is lurking out there. There are two problems most often encountered. First, if Dad becomes unable to attend to his financial affairs, how does Mom/the kids/a kid get legal access to his accounts to pay his bills and run his finances? Second, if Dad has to go to a long-term nursing home, will the state pay?

Q: My mother is beginning to forget things more and more. We (her children) are very concerned that she may have Alzheimer’s or some other disease. We...

For those of us who have a pooch, cat, bird, turtle, or kangaroo (how did he get in this list?) and may not have a family member to take care of our pet after we are gone, here is a possible solution.

Q: If I should die I have no family member to take care of my pet. I would prefer not to see my pet euthanized so I would like to know how I can provide in my will for the care of my animal.

A: Since over 50 percent of Oahu households have a pet, yours is income...

If you have gotten to this point of the book, you can congratulate yourself because you now know more about wills and trusts, probate and taxes, joint ownership and life insurance, and what can go wrong with all this stuff, than your next-door neighbor. I hope that some of the anecdotes and stories will provide you with many pleasant over-the-back-fence conversations. I’m not going to end with yet another pitch to “get off your okole and get your papers in order”—if you haven’t heard that a hundred times already, then you haven’t been listening! Instead, I hope you have...