The SafeEstates Blog

Planning Bloopers

We hope the New Year brings joy, peace and prosperity to you and yours! As you reflect on the events of the old year and resolve to live the new year to the fullest, join us in resolving to make more decisions and keep moving forward. If we make 100 decisions, and only 10 of them are great ones, that is better than only making 10 decisions even if 5 of them are great ones. The results of the 10 great decisions will more than outweigh the 90 other decisions.
Of course, if we can improve our decision making so 20-30% are great ones, life will be even better. One way to improve our decision making is to learn from the experiences of others. Here are some planning decisions we have seen that did not work out well.
1.        “If my spouse does not survive me . . .”  In a recent Tennessee probate case, a husband’s will provided simply “I leave my estate to my wife.” Period. No alternate beneficiaries were named. The wife died first. When the husband died, his children from a previous marriage claimed that since the will was silent, the estate passed to them as husband’s heirs. The wife’s children from a previous marriage claimed under the anti-lapse statute, the estate passed to them as wife’s heirs. The court agreed with the wife’s children. The lesson: always have alternate beneficiaries. We do not have a crystal ball and should not assume an order of death.
2.        “I decided to go paperless.” An unconscious 70-year-old man was rushed to an emergency room in Miami, Florida, earlier this year. He had no identification, family or friends with him when he arrived. However, he had a tattoo across his chest that said “Do Not Resuscitate.” It included a signature. The man’s ink left doctors in an ethical dilemma — save the man’s life or honor the tattoo and let him die? This created more confusion than clarity, and since many people have tattoos they no longer care for, how could this request be taken seriously? Experts agreed the safer course is to have a living will or advanced directive to properly communicate your wishes. Doctors were more than relieved when a formal written DNR request was found.
3.        “I put my friend on my bank account.”  In a recent Tennessee probate case, an elderly widow became distrustful of a relative who was assisting her with her finances. The widow asked her friend, Bernice, if she would be willing to go to the bank to “put her name on the checking account.” The widow and Bernice went to the bank together and Bernice signed new bank forms. When the widow died, her executor discovered the widow’s two sizable bank accounts were joint accounts with right of survivorship, and Bernice was the sole owner as the survivor. The executor sued. Four years later the appeals court sent the case back for a trial to decide what the widow intended. Bankers are not mind-readers. The lesson: be specific with the banker when you authorize someone else to sign checks on your account. Is your intent to make the other person an owner of the account, a signer only for convenience, a death beneficiary, or something else. The bank forms usually list the options and may have a check the box menu for you to indicate your intent.
4.        “This will all be yours someday.”  Parents often plan to pass their wealth to their children and grandchildren.  Business owners tend to be hard working and fiercely independent. As Kohelet (Solomon) observes, “when God gives any man wealth and possessions, and enables him to enjoy them, to accept his lot and be happy in his work – this is a gift of God. He seldom reflects on the days of his life, because God keeps him occupied with gladness of heart.” (Ecclesiastes 6:8). Family business owners often have a business succession plan in their heads, but not so often memorialize the plan in a written agreement or last will and testament. So when the owner becomes unable to run the business and has not empowered a successor to run it, the value leaves the business, and the family, employees, vendors, customers, their families, and others who rely on the business are left with a mess. The lesson: while you are thinking clearly and happy, keep your promise by putting your transition plan in writing and taking all necessary steps to set it in motion when the time comes.
If you will be transitioning to retirement in the next five years, or transitioning to long term care in the next ten years, or you have an estate plan that needs a review or update, now is the best time to get your affairs in order. When you are ready, contact us to start talking about a plan that will work when you need it.