Don’t make us go all Grim Reaper on you. You might only need a simple Will or you might need something more complicated, but you need a plan. If you die without an estate plan, the law will decide who gets what, regardless of your informally expressed (including sticky note) intentions. Heirs will argue and may find themselves paying high probate costs, attorney fees and taxes for the estate administration and distribution. You might live out your final days mute and tethered to bleeping machines. Who would want such a thing?
Three cautions at the outset
First, you should know that the law of the state where you reside when you die governs Wills and inheritance. The laws in Connecticut are not the same as the laws in California. If you have moved, you need a new Will.
Second, you should talk to an inheritance attorney – a specialist --not the guy who looks over your taxes. Only a specialist can help you spot potential problems and solutions.
Finally, only after you have spoken with your inheritance lawyer, consider sitting down with your family and other beneficiaries to discuss your intentions. A surprise at the reading of the Will may be great for TV drama, but it can trigger an inheritance lawsuit in real life. Inheritance lawsuits waste estate assets and damage relationships.
Having said that, inheritance lawsuits are occasionally necessary in cases of elder financial abuse, incapacity or undue influence, but these are rare and uniquely difficult situations.
Make your plan fit your life
You can do lots of things with an estate plan other than giving away money and things. Sitting down with an inheritance lawyer is an opportunity to discuss how you intend to care for minor children, for example. Surely, you have life insurance, but how about a formal guardianship agreement? That conversation with your best friends, Tom and Mary, does not count. How do you intend to ensure that the proceeds of the life insurance would be available to your children’s guardian in the event, for instance, that you and your spouse die simultaneously in a car accident?
Do you have children from a prior relationship who you would want to provide for after your death? Do you have a child or a sibling who has a disability and will need lifetime care? Is there anyone else who is financially dependent on you or someone you would like to recognize for long and faithful friendship? Talk to your attorney about the role a trust fund might play in securing any of these plans.
California is a community property state, but that does not prevent some property from being owned separately. What would you like to do with any separately owned assets?
Are you the sole proprietor or partner in a business? What do you want to happen to the business when you die? Probate proceedings can paralyze a small business for a long time. If it cannot operate and there is no income, how will your family live? How does your estate plan fit together with the financial plan you have for your life?
Is your estate plan up-to-date? Many things may have changed since you considered all of the preceding questions carefully.
What about a power of attorney or an advance health care directive (these have different names in different states) to describe the level of care you would want for yourself in the event you become unable to express your wishes? Many of us have a horror of being kept breathing by machines long after life has left.
These are all issues you will want to discuss with a practiced and reputable inheritance lawyer. That is their job. Turn over every stone.
When things go terribly wrong – from the beneficiary’s perspective
As we live longer and can expect to spend some time in supportive care, troubling situations—incapacity, undue influence or even elder financial abuse—can arise. In the best of all possible worlds, these would not be probate issues, but matters of lifetime care. Note to family: check in on your loved ones while they are alive. Occasionally, however, these issues surface only after someone is gone.
In order to make a valid Will, someone must have the mental capacity to understand what they are doing and the likely consequences at the time they make the Will. People may be old, sick, cranky, naturally possessed of terrible judgment or crazy as a loon after they sign the Will. It doesn’t matter.
The law presumes that everyone is competent, absent compelling evidence to the contrary. It is very difficult to challenge a Will on the basis of lack of capacity without a court judgment appointing a conservator. If you see this issue looming, get to court as soon as possible.
Someone in a position of power or trust may also exercise undue influence over a vulnerable person. It seems to come up in nursing home situations – watch the administrator, not necessarily the nurse. The standard of proof is a little lower. A strange or unexpected disposition of assets may mean a little more if this is the allegation.
In most states, elder financial abuse is prosecuted as a crime, not always as obvious as armed robbery at the ATM, but a crime nonetheless. Since it is usually a crime of coercion, the issues of undue influence and lack of capacity can also become involved.
So, you need a plan. Whether you are young and healthy, have mid-life responsibilities that may be simple or complex, or feel the winding down and want to preserve what you’ve done. Today would be a good time.