11 Jun The Estate Planning Tragedy of Jack and Jill
The Estate Planning Tragedy of Jack and Jill
By: Barry E. Haimo, Esq.
June 11, 2014
Jack and Jill Whisdom were college sweethearts. They were married thirty-seven years until that fateful night when Jack had a sudden fatal heart attack. He was survived by his twin daughters, Gina and Genny, his son, Gerry and adopted son, Mark. The family gathered as often as they could, always enjoying and appreciating their close-knit family.
Jack was a top performing executive at Walmart and earned a nice living. He had accumulated several million dollars in assets, ranging from residential real estate and brokerage accounts to retirement accounts, artwork and exotic cars. Jill was not financially savvy and relied on Jack’s expertise. Jack operated at a high level and didn’t make time to plan his estate, though Jill brought it up a few times. He and Jill simply wanted to avoid probate so they titled all their assets jointly and deferred the tough decisions for another day. Unfortunately, Jack passed away abruptly so that day never came. It all became Jill’s problem when she inherited the assets in her own name after a long, painful and expensive probate proceeding.
Jill was depressed for a long time. On an emotional level, her job as personal representative of Jack’s estate in probate was a constant reminder of what she’d lost. She barely left the house, and waited two years to clean out Jack’s closet. She never wanted to date. She was always missing Jack . Her kids constantly encouraged her that Jack would want her to move on and find happiness again. Fortunately, after a few years, her loneliness was lifted when she met Harry Jensen at an event for her kids. Harry was a tall, handsome and charming man. He made her laugh and always had fascinating stories about his business endeavors. She was captivated by his presence. He seemed to have cast a magic spell over her. She was happy.
One day Jill had lunch with her good friend Brenda, a estate and business planning attorney focusing on wills, trusts, probate, business planning and asset protection. Given the size and and nature of her estate, Brenda encouraged her to retain counsel to plan for her incapacity and her ultimate death, and she agreed it was a good idea. “It’s something that you need to do” Brenda said.
That night, Jill brought up the idea of planning her estate to Harry. “Harry, it was always very important to Jack and I that we leave a nice inheritance to Gina, Genny, Gerry and Mark. We wanted to make sure their college educations were paid in full so they didn’t have to struggle like he did. We also wanted to give them wedding gifts to help them get started.” “Absolutely” Harry said. “You should make a Last Will and Testament leaving everything to them in the manner that you desire. Be weary of using a trust though. Lawyers only suggest those to generate higher fees”, Harry cautioned. (Rolling her eyes because Harry was a no-it-all) “I’ll ask Brenda tomorrow about th–, Jill replied. However, before she could even finish her sentence, Harry distracted her by interrupting. He pulled her close announcing, “Guess what!?” “What!??” Jill asked. “I booked us a 21 day European cruise that was the best bargain I’ve ever seen!” Harry enthusiastically remarked. “I’d like to meet with Brenda first though” Jill said. “Meet her when we get back” Harry responded. “Alright”, she said reluctantly. “What’s the occasion?” she asked. Grabbing her hand, he sincerely replied, “I know you need a change of scenery so I thought it would do you some good”. She smiled and said, “that’s probably a good idea. That was very sweet.”
During the cruise, Harry proposed and Jill quickly accepted. When they shared the news upon their return, the children were quite surprised by their mother’s sudden marriage, but they were happy she seemed to have found love again. While they blessed the marriage, they didn’t realize the extent at which Harry and Jill were burning through their assets. In the years that followed, Harry and Jill spent excessive amounts of money on fine dining and traveling. After all, Harry had expensive taste.
Years later Jill passed away never having sat down with Brenda or another estate attorney to plan for her incapacity and death. As a result, she died “intestate” which means without a Last Will and Testament owning assets in her name. Consequently, Harry inherited her entire estate as her surviving spouse. Gina, Genny, Gerry and Mark didn’t receive any inheritance because it wasn’t specifically provided for in her estate planning documents. Their school tuition and expenses weren’t paid for and they never would receive their wedding gift from mom and dad.
It didn’t take long for Harry to meet another woman. Before long, he was married, having forgotten about his step-children. Sadly, Harry kept the property for himself, and shared the Whisdom estate with his new wife.
Tragically, no business entities or trusts were used. As a result, neither Jack nor Jill would ever realize the extent of their mistake and the pain, suffering and stress that it would cause their family, both emotionally and financially.