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Estate Planning

A Tale of Two Families – In or Out of Court?

Two elderly ladies, Martha and Karen, died. Their families grieved. Both had assets valued at about a million dollars and four living adult children. Martha had a well drafted estate plan; Karen did not.

Estate Plan

Martha met with an estate planning attorney. They talked about her present and future wishes and goals. Martha decided who would speak for her if she couldn’t speak for herself. She determined who would receive her worldly possessions and assets when she died. Her attorney prepared a customized estate plan.  Martha executed four documents: a will, trust, health care power of attorney and durable power of attorney for property. Martha transferred all of her probate type assets to her revocable trust. She named one of her children, Cassie, as her successor trustee. She reviewed and updated the beneficiary designations on all of her insurance policies and retirement type accounts.

When Martha died, Cassie “stepped into Martha’s shoes”.  Cassie is following the directions in Martha’s estate plan. It tells Cassie how to distribute Martha’s assets. Cassie did not need to go to court. She was able to distribute Martha’s assets to herself and her siblings.

Martha did not divide her assets equally among her four children. She provided a larger share for one child. Martha believed that child should receive more than the other three.  Martha’s children did not need to argue about what she wanted. She made it quite clear in her estate plan.  Whether or not they all agreed with what she chose to do, there was no question about her wishes. Martha’s estate plan kept her family out of the courtroom.

No Estate Plan

Karen, unfortunately, had no estate plan. She died without a will or trust. One of her children, Nancy, lived at home with Karen throughout her lifetime. Nancy cared for Karen in her final years. She believed she should receive a greater share of her mother’s estate than her siblings. Nancy hired an estate planning/probate attorney and filed a petition for probate in court. The court appointed Nancy administrator of her mother’s estate.

Nancy did all of the work selling her mother’s real estate. She was very angry that she did not be receive a larger share. One of her siblings asked the court to order “supervised administration”. Nancy was required to obtain the court’s approval each step of the way. There were a number of disputes among the siblings. More than one attorney participated in the case. The amount of money spent on attorney’s fees far exceeded what it would have cost Karen to hire an attorney to prepare an estate plan. All of Karen’s children dislike the results.  They will no doubt remain angry with one another for many years, perhaps throughout their lifetimes.

Would Karen’s children have better relationships with one another today if Karen had an estate plan? While there is no guarantee that they would, the lack of an estate plan certainly contributed to the bad feelings that exist among them.

What do you want for your family?

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