As estate planning attorneys we have had far too many people contact us for help with the following problem caused by their parents’ or spouse’s failure to adopt a comprehensive estate plan. The most common failure to plan problems encountered to the surviving spouse and/or family are:
- Parent or spouse loses his or her mental capacity. This requires the child or spouse to file a petition with the court to appoint the spouse or child as the conservator of the incapacitated person so that the conservator has the legal power to deal with the incapacitated person’s financial affairs and assets. Legal fees can exceed $3,000.
- A loved one is in the hospital and unable to communicate and family members give conflicting healthcare instructions to the doctors. When life and death decisions must be made and the family cannot agree on what to do the doctors will require the family to get a court appointed healthcare decision maker. Legal fees can exceed $3,000.
- Children have no clue if their parent(s) adopted a Will or a Trust and they don’t know exactly what assets the deceased parent owned or who the parent wanted to inherit the assets.
- The number one biggest problem – Because the deceased did not have a Will or a Trust the inheritance laws of the state where the deceased resided at the time of death determines who inherits the deceased’s property. Far too often the state’s inheritance plan causes the wrong people to inherit the deceased person’s property. The single most important reason why all adults who have valuable property should sign a Will or a Trust is to insure that people selected by the person inherit property rather than the people selected by the state.
Our experience is consistent with the findings of a Consumer Reports study published in its February 2013 issue. The story entitled “7 Money Stumbles to Avoid” says that two of the 7 big mistakes are:
“1 Not Updating your beneficiaries . . . . Eighty percent of our survey respondents said they hadn’t created their will and other estate planning documents or updated them within the last five years. . . .
2 Withholding information from family . . . . The widow . . . realized she knew almost nothing about her husband’s business when he died, not even the name of his lawyer. . . . Our survey showed that in only 40 percent of the households did both spouses know where to find the details of financial accounts. . . . The death of spouse who controls family finances can leave survivors struggling to construct the financial puzzle. Communication between generations can reduce hassles and misunderstandings. Yet just 37 percent of respondents with adult children said they’d told their kids where to find important documents, accounts and passwords.