One important purpose of estate planning is to make the transfer of your money and property to your family and loved ones as orderly and stress-free as possible.
To accomplish that goal, your estate planning documents must contain clear instructions and enough information to identify your beneficiaries and carry out your wishes. However, that does not mean every personal detail belongs in your will, trust, or power of attorney.
In general, you should avoid including three types of information in estate planning documents:
- Social Security numbers
- Complete account numbers
- Disparaging or potentially defamatory remarks
1. Social Security Numbers
You may think that including a beneficiary’s Social Security number is the best way to identify that person. Usually, however, the beneficiary’s full legal name, including a middle name or initial when appropriate, is sufficient.
Including Social Security numbers can also create an unnecessary identity-theft risk.
The Federal Trade Commission explains that identity theft occurs when someone uses another person’s personal or financial information without permission. Social Security numbers, bank account numbers, and credit card information can all be used to commit identity theft.
Estate Planning Documents May Become Public
Some estate planning documents may eventually become part of a public record.
For example, a will may be filed with a probate court after the person who created it dies. In Maryland, the Register of Wills explains that papers filed in probate estates are generally public records. A will becomes public when it is filed as part of an estate or as a “Will of No Estate.”
Other documents may also be recorded when they are used in connection with real estate or another transaction.
Once a document becomes part of a public record, people outside your family may be able to obtain a copy. There is rarely a good reason to expose a beneficiary’s Social Security number in this way.
When a Social Security Number May Be Required
A financial institution may require a Social Security number on a beneficiary designation or another private administrative form. Those forms are generally maintained by the institution rather than filed as part of a public probate record.
The important distinction is between information required on a private account form and information unnecessarily written into a will, trust, power of attorney, or other document that could later be filed or recorded.
2. Complete Account Numbers
Your estate planning documents generally should not include complete bank, investment, retirement, or credit card account numbers.
If a document containing those numbers becomes public, or simply falls into the wrong hands, an unauthorized person could attempt to access your accounts or use the information for fraudulent purposes.
Instead, keep a separate and secure inventory of your financial accounts. The inventory can include:
- The name of each financial institution
- The type of account
- The last four digits of the account number
- Contact information for the institution
- Instructions for locating the complete account information
Because account information changes over time, keeping it in a separate inventory also makes it easier to update. You can revise the list without amending your will or trust every time you open or close an account.
Be Careful About Who Receives Account Information
You should also use care when sharing complete account information with family members or other individuals.
Access should generally be limited to people who have a legitimate reason to receive it, such as an agent acting under a valid financial power of attorney, a court-appointed guardian, a trustee, or a personal representative administering an estate.
Those individuals serve in fiduciary roles and are expected to use the information for your benefit or in accordance with your estate plan. Even so, you should select them carefully.
Financial Abuse Can Occur Within Families
Unfortunately, family members do not always use account information responsibly.
In one New Hampshire case, Kile and Debora Madsen were convicted of crimes involving the misuse of their elderly father’s money. Their father suffered from dementia, and the couple used his funds for unauthorized purchases, payments, and withdrawals. The court imposed prison sentences and prohibited them from caring for elderly, disabled, or impaired adults.
The case illustrates why complete financial information should not be distributed casually even within a family.
Keep account numbers in a secure location, and disclose them only to a trustworthy person who has been properly authorized to act.
3. Disparaging or Defamatory Remarks
Difficult family relationships can complicate estate planning.
A person may be tempted to use a will or trust to explain old grievances, criticize a relative, or leave behind a final insult. However, an estate planning document is usually the wrong place to vent anger or settle scores.
In In re Croker’s Will, the court described the temptation of a person to make articulate through a will “pent up frustrations,” a desire for revenge, prejudices, or “spite past the grave.”
Estate planning documents should provide instructions not create new conflicts for the people left behind.
A Will Is Not the Place for a Final Insult
History offers some colorful examples of people using wills to express their feelings.
Philip Herbert, Fifth Earl of Pembroke, who died in 1669, reportedly included the following statement in his will:
“I give nothing to my Lord Saye, and I do make him this legacy willingly, because I know that he will faithfully distribute it unto the poor.”
The statement may have been memorable, but language like this rarely helps an estate administration proceed smoothly.
A will or trust that attacks, embarrasses, or humiliates someone may deepen family divisions. It can also distract from the document’s real purpose: identifying decision-makers and explaining how property should be administered and distributed.
Can Statements in a Will Create Legal Problems?
In unusual circumstances, false statements written in a will may lead to a defamation-related dispute. The applicable rules will depend on state law and the specific facts.
In Harris v. Nashville Trust Co., a codicil referred to Cleo Woodfin and others as “illegitimate children.” Woodfin alleged that the statement was false and malicious and was intended to damage her character. The court allowed the action to proceed.
Even when a statement does not result in a separate legal claim, disparaging language may encourage a beneficiary to challenge the estate plan. It can also make an already emotional probate process more painful and expensive.
If you have a legitimate reason for treating beneficiaries differently, discuss that concern privately with your estate planning attorney. Your attorney can help you decide whether an explanation is necessary and, if so, how to express it without including inflammatory or unnecessarily personal details.
What Should Your Estate Planning Documents Include?
Your estate planning documents should focus on the information needed to carry out your wishes. Depending on your plan, that may include:
- The full legal names of beneficiaries
- The relationship of each beneficiary to you
- Clear instructions for distributing your property
- The people selected to act as your personal representative, trustee, or agent
- Successor decision-makers if your first choice cannot serve
- Instructions for managing property for minors or beneficiaries who need additional protection
- Any legally required identifying information
Sensitive financial details can be stored separately in a secure account inventory or estate planning file. Your trusted fiduciary should know that the information exists and how to locate it when needed.
Keep Your Estate Plan Clear, Private, and Purposeful
The information in your estate planning documents should make your plan easier to administer. Social Security numbers and complete account numbers can expose your family to unnecessary privacy and security risks. Disparaging remarks can create conflict and, in some cases, legal complications.
As tempting as it may be to leave behind a final criticism, call upon the better angels of your nature. Use your will as a means of blessing those you love instead of blasting those you dislike.
We Can Help
At McDonald Law Firm, our experienced estate planning attorney can help ensure that your documents contain the information needed to carry out your wishes without unnecessarily exposing sensitive personal or financial details.
We assist clients with estate planning, special needs planning, Medicaid planning, and related matters.
To schedule a consultation with attorney André McDonald, call:
- Howard County: 443-741-1088
- Montgomery County: 301-941-7809
- District of Columbia: 202-640-2133
DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL, INSURANCE, OR TAX ADVICE.
