02/14/2019
Happy Valentine’s Day!!
The Best Way to Say I Love You!
People do not like talking about estate planning. You can call it legacy planning, survivor planning…whatever you like, but just the idea of creating a plan for what happens when you die makes people cringe. I guess it’s because people don’t like to think about death in general. Which is ironic because absolutely every single person alive will die. I know, I know…you just cringed a little, didn’t you? Well the truth is an estate plan is actually the only way you can leave your loved ones without leaving your loved ones alone.
Consider Carl. He’s a 28-year-old man, unmarried and childless. His mother died when he was 18 and he has one half-sister, Lisa who is 26. Carl and Lisa have different fathers. Carl is engaged. He met his fiancé, Mary, in college when he was 22. They’ve been together six years. Carl proposed on Valentine’s Day and the two set a wedding date for that coming September. Just before the wedding, Carl dies in a tragic car accident. Lisa hires a lawyer to file a lawsuit on behalf of Carl’s estate. The estate is awarded $100,000.00. Because Carl didn’t have any kind of estate plan, Lisa goes to court to have the money released to her as Carl’s heir. When she goes to the surrogate court, she learns that the court requires all next of kin be notified of an intestate proceeding. Carl’s father was never around so-even though he knew who he was-he had no relationship with him at all. Nevertheless, the court requires Lisa to notify him of the money in Carl’s estate.
When Carl’s father gets notice that his son’s estate is worth $100,000.00 he looks up the law to see what he might be entitled to since Carl died without a will. His research reveals that because Carl died unmarried and without children, his father is legally recognized as his only next of kin and therefore entitled to the entire $100,000.00. And, because Carl’s father is the only legal heir, he’s also entitled to all of Carl’s other belongings, including the money in his savings account that was supposed to be the down payment on his and Mary’s new house and the car in Carl’s name that Mary drives. Carl’s father then files a lawsuit in the surrogate court to have the entirety of Carl’s estate turned over to him. It takes two years in court, but ultimately the court determines that Carl’s father and Lisa will split the money 50/50. Of course, by now they’ve spent over $40,000.00 in court and attorney fees and Mary has to give up the car. If you’re Carl, is this what you would’ve wanted?
When a person dies there is inevitably a lot of sadness and hurt. That is unavoidable. But there is also inevitably a lot of confusion, contention, and discord. That can be avoided. If Carl had created a plan, he could have protected both Lisa and Mary. He could have chosen where his belongings went, and avoided his father coming in and causing enormous stress and strife for those who mattered most to him. A good plan would’ve even ensured that money earned after his death went where he wanted and/or avoided any notification to his father whatsoever.
Imagine the difference between the experience Lisa and Mary would have with a plan in place and the experience they would have without one. This is why your estate plan is a gift. Your estate plan isn’t for you, it is for those you love.
I always say everyone has an estate plan. Either you create it or your state will. And if the state does, it will not care about the quality of your relationships or the importance of those friends, godparents, or charities that supported you throughout your life. If you want to show your loved ones how much they mean to you, protect them by putting a plan in place that prevents what happened to Lisa and Mary from happening to them.
