Incorporating gifts to friends in your estate plan can be a thoughtful way to show appreciation for their years of support and friendship. Contrary to common belief, you can remember all those you care for in your final plans – not just close relatives.
Here are some considerations if you want to include your closest friends in your estate plan.
Specific bequests
To leave specific items or amounts of money to your friends, include these bequests in your will or trust. Clearly describe the item or amount and the friend to whom it should be given. This can include personal belongings, such as jewelry, artwork or other sentimental items.
Beneficiary designations
Consider naming friends as beneficiaries on accounts such as life insurance policies, retirement plans or payable-on-death (POD) accounts. For those without close family members, this option can allow you to make a meaningful difference in the lives of your closest friends.
Joint ownership
Adding friends as joint owners on assets like real estate or bank accounts can allow them to receive these assets upon your passing. Be sure to consult with an estate planning representative to understand the implications of joint ownership and ensure it aligns with your overall estate plan.
Letters of instruction
Including one or more letters of instruction with your estate plan can provide additional guidance on your wishes. While not legally binding, this document can help clarify your intentions and even provide personal messages to your friends and family.
When you create an estate plan in compliance with California law, you are free to make any bequests you like, even gifting substantial wealth to your friends. However, it is wise to seek legal guidance when making any substantial estate decisions.