Many of us are familiar with the story of Cinderella. Central to the story is the relationship between Cinderella and her stepmother. After losing his wife, Cinderella’s father decided to marry again to provide a motherly influence for his daughter. While things were peaceful for a while, once Cinderella’s father passed away, the stepmother’s true colors came to light. Feeling threatened by Cinderella’s kindness and beauty, the stepmother subjected her to a life of servitude. Although this scenario seems extreme, this fairy tale illustrates the conflict that can arise when the unifying member of the family dies without an estate plan. Had Cinderella’s father engaged with an estate planning attorney to put his affairs in order, the outcome of this story might have been drastically different.
An Estate Planning Attorney Would Have Put Everything in Writing
While we do not know what Cinderella’s father’s wishes were if he had written them down in a legally enforceable manner, we would know, and they could have been enforced. With tangible proof, everyone would have known what they were entitled to, and it would have been easier for third parties and beneficiaries to enforce his wishes. To carry out his wishes, Cinderella’s father had a couple of legal tools he could have utilized.
Last Will and Testament
Cinderella’s father could have used a last will and testament, which is a document that names a personal representative (also called an executor) to collect all of his accounts and property, pay his outstanding debts, and distribute his money and property. A will would specify who would receive his accounts and property and name a guardian for Cinderella, as she was a minor at the time of his death. Although this document would only be legally enforceable at his death, it could have provided an official way to express his wishes. One downside of relying on a will, however, is that to distribute his money and property, his loved ones would have been required to go through the probate process (the court-supervised procedure to distribute accounts and property to loved ones upon a person’s death).
Revocable Living Trust and a Pour-Over Will
Alternatively, Cinderella’s father could have created a revocable living trust during his lifetime. He would have been able to change the trust document at any time until he became unable to handle his own affairs or passed away. This planning tool would have allowed him to name himself as the current trustee (the person or entity who manages, invests, and distributes the money and property) and to designate a co-trustee or backup trustee if he were unable to act. During his lifetime, he would have had to either change the ownership of his accounts and property (his assets) from himself as an individual to himself as the trustee of the trust or designate the trust as the beneficiary of his assets (with some exceptions). The trust would have allowed him to continue enjoying his assets during his lifetime and designate who would inherit from him upon his death without probate court involvement. This would protect the inheritances of his loved ones and keep prying eyes out of his affairs.
If Cinderella’s father had executed a revocable living trust as part of his estate plan, he would also have a will, but it would be called a pour-over will. This document would be referred to if one or more of his assets were not properly transferred to his trust during his lifetime or at his death by beneficiary designation or if a guardian needed to be appointed for Cinderella. The difference between a will and a pour-over will is that a pour-over directs all assets subject to the probate proceeding to be transferred to the trust instead of a person. Although Cinderella’s loved ones would still have to go through probate, the probate assets would end up in the trust, managed and distributed according to his trust instructions.
An Estate Plan Would Have Appointed Someone to Be in Charge
After Cinderella’s father passed away, without a legally valid estate plan, the law would determine who could step in to manage his affairs. The stepmother, as the surviving spouse, would likely be at the top of the list, and due to her age and position, she might have had more leverage to assume control. Given that relationships between stepparents and stepchildren can often be strained, this could have placed Cinderella in a vulnerable position. To protect Cinderella’s best interests and eliminate potential conflicts, her father could have created an estate plan that appointed a professional trustee as the personal representative under his last will and testament or as a successor trustee under his trust. This neutral third party could have managed his affairs impartially, ensuring that Cinderella’s inheritance and well-being were properly safeguarded.
Cinderella Could Have Had a Better Guardian
Upon Cinderella’s father’s passing, a decision about who would look after her had to be made. In this instance, it appears as though her stepmother was in control and did not make for a kind or caring guardian. However, if Cinderella’s father had truly thought about this, he could have nominated someone else. Perhaps there was a grandparent, aunt, or uncle who would have been able to step in—instead of the household staff who ultimately took care of her. A guardian’s nomination is usually included in a last will and testament or pour-over will. While this is just a nomination made by the deceased parent, it can carry significant weight when a judge is looking to appoint a suitable guardian. Some jurisdictions also have a separate document that a person can use to nominate a guardian. This document would be referenced in the will or pour-over will as well but would be the only document needing revision if Cinderella’s father changed his mind about who he wanted to raise her.
An Estate Plan Would Have Protected Inheritances
Given that Cinderella was young when her father passed, it is likely that she was too young to manage a large sum of money or any inheritance without some guidance and oversight. Therefore, whatever he wanted to leave behind for Cinderella could have been held in trust for her, either under his will as a testamentary trust or as a subtrust of his revocable living trust. A trust would have allowed him to craft specific instructions on when and how Cinderella would receive her inheritance. If Cinderella’s father had created a separate subtrust for her, he could have provided instructions so she would receive her inheritance when he died instead of waiting until her stepmother passed away to receive whatever was left over.
Holding an inheritance in trust is not just for minors. Cinderella’s father could have also placed whatever inheritance he wanted to leave his wife in trust. He could have provided specific instructions about how much she would get and when she would get it so that he would have the assurance that she was provided for. He would have also been able to dictate who would receive the money or property left in the stepmother’s subtrust when she died. In this case, he could have named Cinderella as next in line to receive whatever was left in the stepmother’s trust.
Help Ensure a Fairy Tale Ending for Your Loved Ones
While the story of Cinderella is just a fairy tale, important lessons can be learned. We all want our loved ones to have happy endings. We can help you take steps to avoid the missteps or drama that are part of the typical fairy tales. To discuss ways we can help you craft your happily ever after, give us a call.
