There are few things that really frighten an estate planning attorney. We’re not scared to talk about death, to have those scary and difficult conversations. There are fewer things more frightening, though, than an estate plan gone wrong.
In honor of Halloween, here are some spooky tales that are sure to raise the hairs on the back of your neck:
Dying without a will–what horror!
An unexpected death is difficult in any circumstances, but when Prince died in 2016, a lot of the weird went out of the world. Prince died without a will, which meant his estate has been going through probate, a public process where anyone can learn about the distribution of your assets. Two years later, his family members, whom he probably wanted to provide for, haven’t received any of the money from his estate, which is estimated at $200 million. This is the scariest of all the estate planning mistakes, and like any good horror movie, it should keep you up at night.
There’s trouble brewing… in ambiguous language
When you try to make your own estate plan concoction, maybe with a form you printed off the internet and some advice you received from a friend, you’re bound to leave behind a mess for family members, particularly in blended families. Think about Robin Williams, for example, who died in 2014: though he had an estate plan, it was really too vague for his situation, and his current wife wanted to keep pieces of memorabilia that she claimed fell under the category of “knick-knacks” and household items, while his children from a previous marriage claimed ownership. Rather than getting closure, they got into a legal battle–one that could have been avoided with a really solid plan.
Bone-chilling beneficiary designations
No matter the type of estate plan you have, beneficiary designations on all accounts are absolutely essential. They direct your money where you intend it to go after your death. Without proper beneficiary designations (or a properly funded trust), you could go through probate, which is exactly what you were trying to avoid. Find an experienced attorney who can make sure your trust–and all your assets–are appropriately funded.
The tale of mysterious and forgotten assets
When we think of assets, its easy to get caught up thinking about cash, homes, and cars. But there are some assets that can be dismissed or forgotten, yet they are highly valuable. Take Anthony Bourdain’s recent probate, which revealed that he left his frequent flyer miles to his ex-wife. She will surely be vacationing for years to come on this obscure asset that otherwise would have gone to waste! Ask to see a copy of our Asset Spreadsheet, which is a comprehensive diagram of your assets and where they’re going after you pass away–this includes all the extras, including your Broncos season tickets.
The Return of the Tax Man
Many people are aware that estate planning helps your heirs to plan ahead for estate taxes. Not every estate requires tax planning, but when it goes wrong, it’s especially scary. When Sopranosactor James Gandolfini died suddenly without a will in 2013, his $70M estate was subject to 55% tax. Eventually, the IRS took about $30M from the estate, and while taxes aren’t a bad or necessarily meant to be avoided, it certainly stripped the next generation of some serious assets. There are more efficient ways to make sure your money stays with your heirs.
Of Ghosts & Goblins
You might think that if you’ve been dead for at least fifty years, there wouldn’t be any more trouble with your estate. Tell that to the ghost of John Steinbeck, whose heirs have been struggling over rights to his work and trying to understand his wishes around interpretations of his work. Being clear in your plan about how you want to leave your legacy will help you avoid family problems, and keep you from rolling over in your grave.
Spine-chilling business succession planning
Estate planning is essential for everyone, but it’s especially important for business owners. Without a well-thought plan in place, you could subject your loved ones to legal battles over the rights to a business. This is particularly true for family businesses–like farms and ranches–which have multiple family members involved at different levels of participation and interest. Many businesses fail to move to the next generation because of poor planning.
Keep your skeletons in the closet
If privacy is important to you, consider a trust instead of a will. A trust is private, and your family won’t go through probate, which is a public process. Think of Harper Lee, for example, who died in 2016: she had a will, and though her family wanted to keep it private, the state of Alabama said she would have to be considered like any other citizen of the state, that the will would be public. But her will only revealed that all of her assets would go to a private trust, so there was little information for public speculation.
Scary stories about advanced directives
All kidding aside, advanced directives are some of the most important documents in an estate plan, especially if you have strong ideas about your care. This often applies to people in the medical field. Margo Bentley was a retired nurse who had taken care of dementia patients and understood the difficulty of this disease. In an attempt to prevent a similar situation, she had specifically created advanced directives to avoid artificial nutrition. But when she was diagnosed with Alzheimer’s and her conditioned worsened, judges ruled that she could still be spoon-fed, as food was considered “basic care.”
As more people become familiar with Alzheimer’s and dementia, they want to take action while they’re healthy to prevent any unnecessary prolonging of life. Though advanced directives aren’t everything, they can certainly help you make a statement about your wishes and your care, and as more of these cases occur, we can hope to give people the wishes they express.
Don’t let your estate planning mishaps haunt your family for generations. We make it painless to make a plan that really works. Call 970-879-1572 to get started. Have a safe and happy Halloween!