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General Estate Planning

Monday, November 9, 2015

Husband’s Will Leaves Second Wife Broke!

By Mark J. Manta, Esq.

Benjamin’s second wife, Julia, was a decade younger than her sixty year old husband.  They had one son, Brad, who has Down’s syndrome. Before Julia, Ben was married to Sarah for twenty years and had two children, John and Mary, who were estranged from Ben and were now adults living on their own.  Ben and Sarah divorced ten years ago, but Ben had always hoped for a reconciliation with his children and indeed sent them money on their birthdays every year.

Julia had never given a second thought to Ben’s finances or will as he had always taken good care of her and Brad.  Ben’s work in the healthcare industry provided well for his family. They had a large home in an upscale development.  Since he started working, Ben put his money into an IRA, and it was now worth over $2 million. Julia didn’t know much about it, Ben got e-statements from Vanguard and she only saw references on the tax return she signed.

A week ago Ben had fallen asleep reading, but this time he didn’t stir as Julia approached the couch. The day after the funeral she found his will in an envelope in the antique secretary. Her heart sank when she saw that it had been drafted before they had Brad.  The will left his estate to be split evenly, half to his estranged children the other half to Julia. She didn’t think Ben would have given John and Mary this much today, not with Brad’s special needs.  When she got in touch with Vanguard regarding the IRA, they told her that Ben had never changed the beneficiary from his first wife.

She couldn’t comprehend it. She won’t have any of the IRA; it all goes to Sarah.  Ben’s estranged children will each get $125,000 and Julia gets $250,000, the house and the cars. It’s not enough. Julia realizes she will have to sell the house and she doesn’t know how she’ll provide for Brad and his special needs.

Do you think this is how Ben wanted to take care of his family? Estate planning attorneys know a lot about the law, but to tell the truth, there’s a lot we don’t know. We don’t know when you’re going to die, what the law, or your family situation, or your assets will be like then. So how do we make sure your plan (your Will or your Trust) works correctly at that future time? We’ve found that the common-sense way to keep your plan on track is to get together every so often to review things and make any needed changes. We call this program ACE Advantage.

It’s not just about having the documents. If Ben and Julia had an easy way to keep in touch with their estate attorney, the changes in their lives would have been incorporated into their estate plan.  With our ACE Advantage platform, clients of HighPoint Law Offices have access to services to keep their plan up to date.  Both Ben and Julia would have been able to make informed decisions about how best to care for Brad.  With the ability to call with quick questions or make changes, there would not have been any dark surprises waiting in the secretary.  The difficult time in dealing with the death of a spouse would have not been compounded by the consequences of an estate plan that no longer worked.


Thursday, September 25, 2014

Here's at Least One Thing That We Have in Common with The One-Percenters

 

I was fascinated by a recent New York Times article that talked about the one thing that common folk and millionaires alike agree on:  they don't want to talk about death or inheritance.  What was particularly stunning to me was that most of the people in this survey had already gone to the trouble of creating a will, yet most agreed that they were not likely to talk to their kids about it!  Why go to all of that trouble, and then risk leaving behind a chaotic mess?

The vast majority of my own clients tell me they want two things out of an estate plan:  they want to keep it simple, and they don't want the kids to fight.  If that's the case, then by all means, BEGIN THE CONVERSATION.  Whether that conversation is one-on-one, or guided by a professional, it is the very first step toward building a legacy plan that reflects your values.  It is one of the greatest gifts of love you can give your children.

  

 


Tuesday, August 19, 2014

IF JAMES DEAN ONLY KNEW....

There’s a story that estate planners have been telling clients for years about the need for people to have at least the basic documents (a will) of an estate plan prepared, just in case. Here’s how it goes… James Dean was an actor in the 1950’s. He starred in movie classics such as Rebel without a Cause, Giant, and East of Eden. James was raised by his aunt and uncle after he was abandoned by his father as a baby and he had no relationship with his father by the time that he became a star. Dean’s movie career was cut short in 1955 when he was tragically killed in a car crash, creating the pop culture legend of James Dean that still survives 60 years later.

 

Dean’s estate generates approximately $1-3 million annually through the licensing of his likeness on merchandise and in commercials. That’s about $120 million dollars over the past 60 years. And who owns the rights to his likeness and runs his estate? His father, not the aunt and uncle who raised him since he was a baby. Why? Because when Dean died back in 1955 he had no estate plan, not even a will, and he died intestate. Under California and most States’ intestate laws, Dean’s father (as his closest living blood relative) was entitled to the estate. How fair was that?

 

But that was 60 years ago, surely people have learned from Dean’s mistake, especially celebrities with a high net worth. Wrong. Philip Seymour Hoffman, Oscar winner for his title role in Capote, passed away earlier this year and because he didn’t have an updated estate plan, two of his three children will be left out of inheriting their portion of his estimated $35 million estate. So even though he had an estate plan, he never updated the plan, and because of that two of his children may get nothing.

 

Protect your family, protect your loved ones, protect your assets, protect yourself. If it can happen to movie stars who are surrounded by lawyers, managers, agents, accountants, and assistants, then it can happen to you. But it doesn’t have to happen to anyone. A properly planned and updated estate plan will help you avoid costly mistakes like Dean’s and Hoffman’s.


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