Does Your Estate Plan Account For All Of Your Heirs?

     When we put our estates in order, there are often issues we neglect to consider. For instance, have you been married before and are there children of a previous marriage? If so, do you and your current spouse wish to provide for those children along with any children you have together? You and your spouse may have different feelings on this subject. Your view may depend on what assets you each brought to the marriage, what assets you acquired together, the length of your previous and current marriage and the ages of your children and how close you are to them. Consider the following scenario.

     Mary and George have been married 52 years. Together they have 2 adult children, Patty and David and 3 grandchildren. George also has one son, Ronald, age 55, by his previous marriage, who was born after he and his first wife divorced and his wife had remarried. He has seen Ronald only twice and it has been 52 years since then. After he married Mary he lost all contact.

     George and Mary spent a lifetime saving and have accumulated an estate worth $400,000. Their assets are all owned jointly. They have never gotten around to doing any estate planning, not even simple wills, as they have never wanted to think about it let alone put it in writing. They just assumed that the surviving spouse would get all of their assets when the first of them died; their 2 children, Patty and David, would get the assets when the last of them died; and if David or Patty died before them, their grandchildren would receive their parent’s share. In addition, because George had no ties to or feelings for Ronald, neither he nor Mary wished to provide for any inheritance to him.

     Mary became very ill and was hospitalized with cancer. She lapsed into a coma and died shortly thereafter. The assets held in their joint names passed directly to George, with no need for probate, as he was the surviving joint tenant. Two years later, George died, still leaving no Will, and a probate proceeding was commenced by David and Patty. Ronald read about the probate proceeding in the public notice published in the local newspaper, after all probate is a public proceeding, and filed a petition to contest the distribution to David and Patty demanding that he was also entitled to a share as one of George’s blood heirs. Consequently, what could have been a simple proceeding became a long, drawn out, battle and increased the attorney’s costs involved. Because George had not prepared a Will or Trust specifically providing that Ronald was not to receive a part of his and Mary’s assets, it is possible the court will award a portion of their estate to Ronald, a result unintended by Mary and George, and certainly unanticipated by David and Patty.

     Had George and Mary just taken the time to properly plan their estates taking Ronald’s existence into consideration, this may have been avoided and they would have controlled the eventual distribution of their assets by making their intentions clearly known. While Wills would have spelled out their intentions, probate would not have been avoided on George’s death. However, if they had implemented a Living Trust, there would have been no probate proceeding and Ronald would not have seen the publication notice and would not have contested the distribution. All of George and Mary’s assets would have been distributed as they intended, to David and Patty.

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