written by Brad W. Wilder

The Greatest Gift

There is an old saying that the only sure things in life are death and taxes.

Notwithstanding our mortality, many people will nevertheless neglect to devote

sufficient time securing their wishes for the disposition of property to loved ones upon

death, i.e. Estate Planning.

Those who have not properly planned for their death by preparing Wills, Trusts

and other related documents will unnecessarily shift to their spouse, children or other

relatives, the unpleasant obligation of resolving property issues within a Probate

Court proceeding, a process that can be both costly and time consuming. Of course,

even the existence of a Will sometimes can still create unintended problems and

confusion if the deceased has not revisited his/her Will to insure that the terms are

compatible with his/her present situation and intentions. Perhaps you have followed

or are aware of the dilemma surrounding the Will of Heath Ledger (Oscar nominated

for his role in Brokeback Mountain). Mr. Ledger filed a Will in 2003 but never

updated it. As a consequence, no provisions were made for his girlfriend and their 2-

year old daughter. Mr. Ledger’s 2003 Will leaves his estate to his parents and three

sisters.

Believe it or not, the situation involved in Mr. Ledger’s case is not rare. Similar

problems can also exist for those who have experienced divorce. Consider, for

example, the following:

During his marriage to Kathy, Joe created a Will naming

Kathy as the beneficiary of all of his property. In his Will, Joe

named his two children as alternate beneficiaries. A few years

after Joe executed his Will, he and Kathy divorced. A few

years after his divorce, Joe married Ann. A year into his

marriage to Ann, Joe died.

Who should receive Joe’s property? One could argue that Kathy should receive

since she is specifically listed in Joe’s Will as the beneficiary. Conversely, Ann could

argue that she should be entitled to Joe’s estate since she was his wife at the time of

death and the divorce between Joe and Kathy should operate to revoke the Will. And

let us not forget Joe’s children, who might argue that they should receive since they

are specifically listed as alternate beneficiaries under Joe’s Will and their father

would want them to receive ahead of their stepmother of only one year.

So who would prevail? Well, that depends. Among the factors that would be

considered in resolving the issue are:

1) When Joe created his Will;

2) the State in which Joe resided when he created his Will;

3) the State where Joe claimed residency at the date of his death; and

4) the date of Joe’s death.

Change any one of the four factors, and the answer to the question of who will prevail

might also change.

As the above scenario demonstrates, despite Joe’s best effort and good

intentions in creating a Will, the slight inattention he gave to insuring that his Will

was up-to-date might result in a distribution of property he did not intend or want.

And imagine the anxiety that Kathy, Ann and Joe’s children will endure, in the

immediate wake of Joe’s death, in having to resolve the property issues.

But just as Joe had the opportunity during his lifetime to manage his financial

matters, so, too, did he have the opportunity of insuring that his estate planning was

up-to-date and reflective of his intentions and wishes.

For the unwary, there are many nuances and pitfalls associated with estate

planning. Whether or not to transfer real estate to children, a spouse, or a trust;

whether to plan around medicare, medicaid and/or anticipated nursing home needs;

whether to buy or sell real estate; whether to have a power of attorney for healthcare

or for financial needs; and whether to take advantage of current gift tax laws, are just

a few of the many important issues to consider. Sample Wills downloaded from the

internet, or purchased off the shelf of a retail store, simply fall short in meeting

personal and precise estate planning needs.