Before It's Too Late ~ Eric Gullotta

Eric Gullotta Eric S. Gullotta, JD, CPA, MS (Tax) specialies in estate planning and taxation law. His office is located at 232 West Napa Street, Suite A, in Sonoma. Contact him at 938.7234 or visit


Keeping it simple

Posted on September 19, 2015 by Eric Gullotta

Okay, I want my bicycle to go to my cousin Jim, but if Jim isn’t around then Marcy gets the bike but only if … I hear this all the time. Detailed estate plans that are unnecessarily complicated. Clients feel that their wishes have to be detailed to be effective. I argue the opposite.

Not all detailed plans are as dramatic as my intro. Sometimes they are subtle. A common request from a client is that their home (or other real estate) is “to be sold” or to the contrary “not to be sold” upon their death. Stating whether or not the real estate is to be sold is ridiculous. How can you possibly know what is best for the property in the future? If you designate what is to happen to the house – the trustee or executor is stuck, and can’t change it.

For example, upon your death you state that your home is not to be sold, but “kept in the family so generations can enjoy it”. Here’s the problem: a developer is putting in dense residential and wants to buy your lot for a 25 percent premium over market. What’s worse? If you don’t sell, the high-density housing will devalue your property. What if you required that “the property be sold upon my death”? Does that mean one of the children can’t keep it and keep your property tax base? (if all other requirements are met) Yes! Give your family flexibility to do what is best at the time you die and frankly, you don’t know what that is right now.

Other conditions people love to use are sobriety, education or marital status. The problem here is interpretation and/or monitoring. Let’s say you state that your son shall not receive his inheritance unless he is sober. Let’s go one step further and say that he must be free from drugs and alcohol for two years. Well who knows if he is or not!? If he slips one day does he start all over? What if he took prescription drugs? What if he was selling drugs and not taking them? He could be an absolute drug addict, but a decent lawyer and some in home drug tests could possibly convince the court that he’s sober.

Flip that around, how about if the kid was clean and sober, but there is no way to prove it? Will the court still give him is well-deserved cash? Furthermore, if the beneficiary hasn’t achieved their sobriety, education or marital goal the trust must stay open all the while paying accounting, attorney and tax prep fees. You can always go and petition the court to change the conditions of the estate plan, but any trust that ends up in court is a failed plan.

How can you avoid this headache and still make sure that the gift you give your loved ones upon your death is done responsibly? Sometimes you can’t and you just have to define every little detail as best as you can. Another way to go is to give someone who will survive you the discretion to make decisions about whether or not the beneficiary should get the inheritance. Sort of like a gatekeeper. They can be given discretion to grant or deny the gift. Yet, this has its own faults. What if the person doesn’t carry out your wishes? After all, they have complete discretion.

Bottom line – consider giving up some control. It may be more helpful than you think.

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