Pittman Law Office NewsflashEstate Planning Horror Stories
We all know that we are going to pass, yet some folks fail to have their affairs in order when the time comes. We would assume that the “rich and famous” would have an effective estate plan in place to ensure that their wealth is distributed according to their intentions, however this isn’t always the case. For instance, Michael Jackson, James Gandolfini, Barry White and Heath Ledger all died with inadequate or nonexistent estate plans. You might be thinking that since you don’t have a large estate that it will be a simple process after you pass, however typically this is not the case. Below are a couple local estate planning horror stories.Nightmare One: Mother created a Last Will and Testament with an attorney which dictated that her probate assets were to be distributed equally between her children. On her death bed, she signed a valid codicil (an amendment) to her Will, without legal representation, requiring that her home be sold and the proceeds be split between her children. This sounds logical, however the result was detrimental. Result: If mother would have died without the codicil, her primary residence would have went through a 90 day court process and the Judge would have ordered the home equally to her children. However, since she had a validly executed codicil requiring her home be sold (which is a no-no in Florida), her primary residence went through a formal court process (Probate) that took over 9 months, her house was subject to creditors and her children never received a penny from the mother’s home due to the creditors claims. Nightmare Two:
Father created a Revocable Trust in 2013 for the benefit of his 4 children. He later moved to Florida and got married in 2018. He thought he was protected when he got married because he had his estate plan created before he married his wife. Since this was both of their second marriages, they verbally agreed to have their assets go to their respective children. They agreed that his house in Florida would go to his children and she would move back into her home in Maryland if he passed away first. Father passed in 2022. Their primary residence was owned as a married couple and in 2019 he made his spouse an owner on all of his accounts to make sure it was easy for her to access the money if he became incapacitated. Wife/Stepmother died in 2023 with her own estate plan that said all of her assets were to go to her children. Result: Father had an unfunded Revocable Trust, meaning he didn’t connect his assets to his trust. The primary residence that he intended to go to his children when he passed ended up going to his spouse when he died because they owned it together as a married couple. When his spouse died in 2023 the home went to her children. The Revocable Trust said that the children were to split the money assets. However, when Father put spouse as a co-owner of his accounts, the ownership superseded the terms of the trust. Spouse got all the money when Father died. When spouse died in 2023, her children got the money that he intended to go to his children. His children didn’t receive anything.
Lessons Learned:
Seek legal advice when you want to update estate planning documents;How an Asset is titled/owned matters;Verbal agreements aren’t enough to ensure respective beneficiaries receive an inheritance; and Update estate planning documents after a major life event (marriage). |
