Estate planning sounds simple enough to the uninitiated. After all, as we educate our clients, the entire process really only consists of three steps. However, the details do matter, and even well educated, financially savvy people can make mistakes that can derail the process and create tremendous pain and frustration for loved ones left behind.
In fact, history has shown time and again how minor estate plan flaws can lead to havoc. George Washington and Abraham Lincoln were two of the most powerful men in history, for instance, and yet each left an estate that was contested for years after their deaths. Neither spelled out the specifics of their wishes clearly enough to make their plans airtight. Washington’s estate didn’t close until 1847, nearly half a century after his death. Lincoln, meanwhile, died intestate! For all his unbelievable accomplishments, he failed to invest a tiny amount of time and energy to write a simple will.
Horror Story #1: More recently, ABC News profiled the case of a 58-year old author, pseudonymously reported as “Jean Argento,” who did not speak with her mother for five years after the death of a great-aunt. For complex reasons, the great-aunt wrote Argento’s mother out of her will, leaving her entire $250,000 estate to Argento, instead. This surprise decision set off a terrible rift between mother and daughter. Argento later reflected: “I wish Aunt Evelyn had sat everybody down and said I’m changing my will, but she chickened out.”
Estate Planning Lesson #1: Strongly consider being as transparent as possible about your wishes and intentions with family members to prevent family feuds after your passing.
Horror Story #2: CNBC tells the story of a man who made the mistake of giving his girlfriend partial control of his assets. Without his knowledge, the girlfriend promptly transferred ownership of a huge chunk of his estate to herself. When he died, there was almost nothing to give his children.
Estate Planning Lesson #2: Think it through. This man obviously cared for a person who did not deserve his trust. If you know that you want your estate to go to your children upon your death (or someone else you care about), do not cede control of your assets to anyone else.
Horror Story #3: The story of “Brandon and Emily” has been featured in The National Law Review. Prior to their marriage, Brandon received a multi-million dollar settlement as the result of an accident. Although Brandon and Emily signed a prenuptial agreement prior to getting married, after they had been married for some time, Brandon added Emily as an 80% beneficiary. That would have been fine if Emily had not filed for divorce. A short time later, Brandon died suddenly. Even though they were no longer a couple, Emily received $14.4 million.
Estate Planning Lesson #3: Visit your attorney the moment you undergo a change in status. Had Brandon changed his estate plan at the time Emily first filed for divorce, he could have left the money to the party of his choice.
Consider your estate a living, breathing thing that changes along with the circumstances of your life. If you have any questions about estate planning, contact us at ILP + McChain Miller Nissman at 1-800-827-7784. .