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DIY Estate Planning Mistake #5: Failing to Create a Coordinated Plan

Posted by Nina Whitehurst | Sep 20, 2019 | 0 Comments

I alluded to this mistake in an earlier post, but it really deserves it own article.

Many DIY-ers unwittingly get into trouble due to their ignorance regarding the interplay between various estate planning techniques.  This is another topic that is best explained using examples.

Example 1:  Wife in second marriage owned the home in which she and her husband resided.  Her intent was to allow her husband to live in it for the rest of his life if she passed first, and then when he died it would go to her daughter.  She executed this "plan" by recording a deed that created a joint tenancy with right of survivorship in favor of her daughter and, to create the life estate, she wrote out a one-page last will and testament entirely in her own handwriting.  Apparently she thought the two of these documents read together would create the life estate to husband and remainder to daughter that she wanted.  She died.  Daughter immediately commenced an unlawful detainer (eviction) action to boot her disabled veteran step-dad out of the house.  He had no place to go and called me. What a sad story.  The deceased wife had not understood that joint tenancy trumps a will.  Daughter had the legal (not necessarily moral) high ground; she now owned the house solely in her name, not subject to any life estate.  A few thousand dollar spent on a coordinated estate plan could have saved this poor man tens of thousand of dollars in litigation expenses, money that he did not have.  And even if he had the money, the chances of success were highly questionable, as the law is pretty darn clear regarding the primacy of joint tenancies over wills.

Example 2:  Mom created a will naming her daughter as executor and directing the executor to divide all of mom's assets among mom's children equally.  She then named her daughter (the one named executor) as the death beneficiary of all of her bank accounts.  Mom died.  Daughter kept all of the money and didn't share it with anybody.  She didn't have to.  Legally it was all hers.  That is how beneficiary designations work.  They bypass the will.  Mom apparently did not understand that (or did she?).  The only hope the disinherited children had to get their hands on any of that money would have been to hire a litigator to try to convince a court that mom meant for daughter to treat those funds as assets of mom's estate.  Good luck with that without any evidence beyond the facts stated.

Example 3:  Husband and wife, who married late in life and had no children, created a living trust on Legal Zoom.   The living trust intentionally disinherited all of their relations, most of whom they hadn't seen in decades, and instead made gifts to charities.  Believing that their plan was complete, they did not create wills.  Husband passed and wife assumed that she would inherit all of his assets, but she did not because (a) the trust left everything to charity (they forgot to leave things to surviving spouse first), and (b) nothing was in the trust anyway (this, ironically, turned out to be a good thing), and under the laws of intestate succession (applicable because he had no will) the husband's property (which was all his separate property) went one-third to his surviving spouse and two-thirds to his siblings.  And a probate was required for the surviving spouse to obtain her one-third share.  Oops.

Example 4:  Mom created a living will that stated that she did not want extraordinary measures to keep her alive if she was terminally ill or no longer enjoyed a certain qualify of life.  She also created a medical power of attorney naming her son as her health care agent with authority to make health care decisions for her, including decisions with respect to surgery and invasive procedures such as feeding tubes and the like.  There was no mention of her living will in the medical power of attorney, which contained conflicting provisions.  Mom became terminally ill with cancer and was eventually unresponsive due to heavy medication.  Son authorized surgery to insert a feeding tube through mom's abdomen and into her stomach to provide life-sustaining nourishment.  This surgery was painful and hard on Mom and her caregivers and also led to complications, but it did make son feel that he was doing his best to save her.

A comprehensive estate plan is not just a collection of separate, independent documents.  Rather, it is a, well, plan.  That is, all of the documents work together and are coordinated with each other rather than working against each other. 

We can review your existing estate plan to help you determine whether it is coordinated or a mishmash.  If you don't have an estate plan, there is no time like the present to get started.  Call us to schedule your initial consultation.

About the Author

Nina Whitehurst

Attorney at Law Nina has been practicing law for over 30 years in the areas of estate planning, real estate and business law She is currently licensed in Alaska, Arizona, California, Colorado, Oregon and Tennessee. Her Martindale-Hubbell attorney rating is the highest achievable: 5 stars in peer...

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