By: Barry E. Haimo, Esq.
August 25, 2015
Estate Planning: Do Not Assume Your Kids Will Automatically Inherit Your Assets
Some people neglect to hire a quality attorney because they don’t want to pay for his or her services. But in many cases, failing to hire one can end up costing you much, much more.
When it comes to estate planning, a single missing or misworded document can cause major problems. Too often, individuals assume that their heirs will automatically receive their assets upon their death. In fact, the process of settling an estate involves many hurdles and complications. Without a proper estate plan in place, you can end up leaving your heirs with a lot of hardship and headache and little remaining of their inheritance.
That’s what unfortunately happened to the Miller family.
“My Kids Can Just Split My Money Equally When I Die.”
Barbara Miller was teased relentlessly by her friends for her penny-pinching ways—she was the type of woman who stockpiled coupons, recycled plastic silverware, and had worn the same pair of sturdy, plain slippers for more than 10 years. But for all their teasing, none of Barbara’s friends could deny that her frugalness hadn’t served her well. After a lifetime of scrimping, saving, and managing an upscale bed and breakfast with her husband, Barbara could boast over a million dollars in assets by the time she retired. Barbara continued to invest and save responsibly throughout her retirement and after her husband’s death. She took comfort in knowing she would leave behind a sizeable estate for her three children to divide among themselves after she died.
Barbara was proud of her independence and ability to manage her finances without the help of her husband or hired professionals. Whenever her friends suggested that she consult with an attorney to help her come up with a plan for her sizeable estate, Barbara would scoff. “Why waste my hard-earned money? Everyone knows lawyers are nothing but greedy con artists,” she’d insist. “I can manage my affairs just fine on my own, thank you.”
Barbara might have had a head for finances, but—like many people without a legal background—she was not very familiar with complex Florida probate laws or what was involved in the process of planning an estate.
“I don’t want my kids to have to go through a lot of hoopla and legal mumbo-jumbo after I die,” Barbara would say. “I’m keeping it simple—my kids can just split my money equally when I die and that will be that!”
Unfortunately, by neglecting to invest time and effort into planning her estate, “hoopla and legal mumbo-jumbo” was exactly what Barbara was leaving her three kids.
Becky, Tim, and Steve were grown with careers and families of their own at the time of their mother’s death. When they heard the news, all three of them had to scramble to get time off of work and book flights home to take care of her funeral. Afterwards, all three of them met and agreed to put off the process of settling their mother’s estate until they weren’t all so busy—perhaps during the fall, when the kids were back in school? After all, the money wasn’t going anywhere. They also agreed to settle her estate themselves rather than bringing in an attorney—they knew how their mother felt about lawyers.
The three Miller heirs returned to their respective homes across the country, resumed working, and fell back into their lives. Settling their mother’s estate wasn’t exactly their top priority, since they were all fairly well off financially, and all assumed their mother’s estate wouldn’t be that big, anyway. After all, how much money could you make running a bed and breakfast?
Weeks turned into months, and months turned into a year. Finally, the oldest daughter, Becky, decided that it was time to bite the bullet and work on settling the estate.
To Becky’s unpleasant surprise, she encountered a series of problems as soon as she began the process. Taxes hadn’t been paid, liens were placed on properties, and other assets had been repossessed. Becky realized she would almost certainly need the help of an attorney to have any hope of sorting out the mess.
In the end, it took a 18 months, a lot of headaches, thousands of dollars, and an incredibly patient attorney to sort out Barbara’s estate. By the time the process was completed, Barbara’s million-dollar estate had shrunken down to a meager few thousand-dollars. Her kids agreed their mother had been smart about most matters in her life, but she may have been misguided in her suspicion of attorneys and skepticism towards estate planning.
The complex and sensitive process of planning an estate should be navigated with the guidance of a knowledgeable legal professional. Do not make the mistake of assuming your assets will manage themselves after your death. Talk to an estate planning attorney, who can help you determine the right strategies and draft the proper documents for your unique estate. With the help of an attorney, you can build a solid plan that ensures your assets are distributed according to your wishes, and your survivors are cared for and spared undue stress.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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