Carissa Giebel column: Estate planning mistakes to learn from
Mar. 24, 2014 |
Sometimes the biggest incentive to get your estate planning done can be hearing stories where estate planning, or the lack thereof, went wrong. If estate planning has been something you’ve been putting off, perhaps some of these stories may encourage you to act sooner, rather than later.
- A former Supreme Court justice decided to write his own will, using only 176 words, and his family spent over $450,000 in estate taxes and court fees that likely could have been avoided if he had taken the time to do proper planning. Don’t draft your own will; instead seek experienced counsel.
- A young woman had a will that left her assets directly to her minor son. When she passed, her estate had over $1 million from a wrongful-death claim. Unfortunately, her son passed away a few hours after her. The only heir of her minor son was his father, who was not involved in his life and was a drug addict.
All the mother’s assets passed to the minor son, and then at his death, it all passed to his father. The woman’s family received nothing. If the woman’s will had left her assets in trust for her son, naming a contingent beneficiary in case he would pass away when assets remained in the trust, the father would not have received anything. At the very least, the woman’s will should have included a survivorship provision, requiring a beneficiary to survive her by a period of time (like 30 days) in order to inherit. Estate planning needs to account for all possible contingencies.
- Michael Jackson had a trust, but all his assets were not in the trust, which led to a public fight in court between his family members. To avoid this, make sure your trust is fully funded and all your assets are in your trust or set up to fund to your trust upon your death. If not, your trust will likely not accomplish all your estate planning goals and work as it was designed to.
- A couple met with an attorney and had a will drafted, along with a health care power of attorney. No durable power of attorney for finances was ever done. When the husband had a stroke and became incapacitated, the family had to go through an expensive, time-consuming guardianship proceeding in the court in order to access any of the assets titled in the husband’s name. If a durable power of attorney was in place, the entire guardianship and court proceedings could have been avoided.
- When a father had a stroke and had to enter a nursing home, the kids closed his bank account and didn’t take the time to go through his mail. When the father passed, they found a statement for a $1 million life insurance policy. However, their father was paying the monthly premiums automatically from his bank account, and when the account was closed and payments stopped, the insurance company sent a letter that was never read by the kids. They lost $1 million. Make sure someone knows what assets you have and where to find information regarding them. Better yet, discuss with your agent named in your durable power of attorney, the personal representative named in your will, and/or the trustee named in your trust.
There is always uncertainty, but professionals can help plan for that. Don’t let your story be one for people to learn from.
Carissa Giebel is an estate planning attorney and partner at Legacy Law Group LLC. She can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it., www.legacylawllc.com or (920) 560-4651.
