Question: I’ve tried to impress upon my parents the importance of preparing a will or trust for their estate planning to avoid the need for courts or attorneys as well as family wars over who gets what. If they won’t listen to me, are there some short-form examples that estate planning attorneys provide to support my efforts in convincing my parents to plan before it’s too late?
Answer: Too many people try to save a penny by not hiring an attorney to assist in protecting their assets. Death too often inflicts horrifying anguish upon beneficiaries. Of the thousands of examples, the following are a few self-inflicted blunders that may assist in explaining the importance of estate planning.
A second marriage for both husband and wife, each with children from previous marriages. The couple combined all of their assets, including a home purchased by the husband during his first marriage. The husband died and his second wife died a month later. Result: The second wife’s children got everything; the husband’s children got nothing.
A divorced father designated his minor child as beneficiary of his life insurance. At his death, a court-supervised guardianship was required to manage insurance benefits until the child turned 18. Result: Thousands of dollars lost from unnecessary legal fees.
A mother’s revocable trust left her estate to her three children. Unaware of his substance abuse problem, she named her oldest son as trustee. At death, she had $195,000 in the bank, which he withdrew, squandered on drugs and is now homeless. Result: The other two children got nothing.
Parents gave their daughter a new car for her 18th birthday. They titled the car jointly with their daughter, who caused an accident that killed two people. Result: The parents were sued for wrongful death and their life savings were severely decreased to pay for damages.
A retired engineer wrote his own will by copying legal text from his parents’ wills written 50 years earlier. Result: When he died, his wife owed hundreds of thousands of dollars in estate tax that could have been avoided entirely with proper trust planning.
A man divorced and remarried, living happily with his second wife for 20 years before his death. He had a $300,000 life insurance policy from his employer naming his first wife as beneficiary. It was never updated after his divorce. Result: His first wife received all life insurance money; the second wife got none.
To avoid probate, a widow deeded her condominium to her daughter. Two years later, the daughter died. Result: The deceased daughter’s son, as the rightful heir to his mother’s estate, filed probate, obtained title to the condominium and evicted his grandmother.
Don’t impact your family with self-inflicted blunders. See an estate planning attorney today.