Ever wondered what a founding father’s Last Will and Testament looked like? Probably a lot like yours. Ben Franklin provides an excellent look into several issues regarding what you leave and to whom.
Sam Moak, an attorney in South, Texas, has a great breakdown of Ben Franklin’s Will. Here are some of the highlights.
Franklin gave his son William all of his property in Nova Scotia “to hold to him, his heirs and designs forever.” William is what we consider a primary beneficiary because he received the property outright from the will. Much like you might leave your home to your children or to their children, Ben Franklin kept his property in his bloodline.
Franklin owned three homes on Market Street in Philadelphia, other property within Philadelphia and pasture land outside the city. These are probably worth a pretty penny nowadays. Ben transferred the right to use that property together with his “silver plate, pictures and household goods” to his daughter Sarah Bache and her husband Richard Bache for use “during their natural lives.”
This gift created a life estate. You may have a home or other real property and desire for a particular person to use that property for his or her lifetime. A life estate is an excellent way to give a person life use of property. Clients often use this type of gift to ensure a piece of property remains in the family for multiple generations. Children can’t sell the property, but can live in the home forever. Think a family ranch for a Texas specific example.
If you create a life estate for a person, then you may also designate a person or perhaps a charitable organization to own the property after your life tenant passes away. Make sure to visit our site for an upcoming article about charitable giving and how it might be a great idea for you.
Ben Franklin’s intent was to transfer property to his daughter and son-in-law for life, with the remainder to his grandchildren. But what if one of the grandchildren were to pass away prior to the demise of both parents? Franklin indicated that if one of the grandchildren were “to die under age, and without issue,” that share would be “equally divided among the survivors.” This is an example of a contingent beneficiary.
A contingent beneficiary is the person who will receive the property if the first person is not living at the time of the transfer. For example, you may wish to give a gift through your Will to a brother or sister. But if he or she passes away before you do, then it is important to select another person to receive the property. We often see DIY Wills where a client names a primary beneficiary but fails to name a successor beneficiary.
Franklin also realized some of his grandchildren might be young if and when their parents passed away. Franklin stated in his Will that some of them are “under age” and “may not have capacity” to manage the property. Therefore, he ordered the Supreme Court of Pennsylvania to select “three honest, intelligent, impartial men” to manage the property.
If your estate plan includes young children, then you will want to create a trust to manage property for the benefit of the children. The trust should work to provide a distribution of income and, if needed, principal from the trust to the child until the recipient reaches an age you designate for distribution of the assets. In Texas, children under eighteen (18) cannot inherit property outright. Instead of going through the expensive and time consuming process of petitioning the Court (not the Supreme Court in this case, but a Probate court) to create a Trust, consider having an attorney draft this trust as part of your Last Will and Testament.
If you don’t have a Will, don’t panic. Wills are simple to draft and easy for attorneys to set up. Over 60 percent of people pass away without Wills. Your property will eventually get to your heirs-at-law, but the process is more expensive and time-consuming.
Come see us for an Estate Planning meeting right away! 817.638.9016.