Legacy Assurance Plan: estate plan problems

Friday, February 2, 2018

How Long-Term Non-Marital Relationships Can Cause Problems if You Don’t Have an Estate Plan

Summary: Having an estate plan in place can provide you with many benefits. It allows you to indicate what your goals are, and remove any uncertainty about who should or should not take from your estate. To avoid the problems of unintended disinheritance, uncertainty and all-too-avoidable court litigation, take control by getting a complete plan in place and making sure that your plan is periodically reviewed and updated as needed. By getting a plan, you will have the peace of mind that comes from knowing that you have benefited your loved ones by taking control of your legacy and making clear exactly what your wishes are.

Your estate plan is your legacy. Your estate plan creates your legacy by indicating whom you wish you remember and acknowledge through the distribution of your wealth. When you have an estate plan that is complete and ideally tailored to meet your needs, you can rest easy knowing that you have taken control over your legacy and ensured that your assets will be distributed according to your intentions. When you don’t, and you have no plan, then the opposite is often true. When you have no plan, you have no control and the lack of planning often opens the door to uncertainty and uncertainty often means court battles.

As an example, look at the estate of Dennis, a man who lived in a small town in the middle of Pennsylvania. Dennis died in early 2016. His online obituary says that he was survived by his two sisters, a brother and his fiancée, Jeannette.

Jeannette, however, went to court and argued that she was much more than just a fiancée. She contended that she and Dennis had been, for several decades, “common law” spouses. Jeannette’s argument in court was that, because Dennis had never created an estate plan and died intestate, and because she was Dennis’s surviving spouse and he had no surviving children, she was entitled to the entirety of Dennis’s estate.

In court, Jeannette testified that she and Dennis began dating in 1974 and the couple moved in together in 1987. Shortly after that, according to Jeannette, the couple exchanged rings that were meant to symbolize that their relationship was “forever.”

Not all states acknowledge common-law marriage as legal, but Pennsylvania does. Pennsylvania, though, creates a fairly high legal hurdle for proving to a court that a relationship constitutes a valid common-law marriage. Ultimately, that hurdle worked against Jeannette in her case. On certain forms like medical records, Dennis listed his younger sister as his next of kin, gave Jeannette as his emergency contact but described her only as a “friend” and used as his official address an address that was not the home in which he and Jeannette alleged lived together. Additionally, Dennis and Jeannette did not file joint tax returns, they did not share joint bank accounts and Jeannette had never taken Dennis’s last name. All of these things amounted to evidence that the relationship was not a common-law marriage. This led the trial court and an appeals court to rule against Jeannette.

The outcome triggered by this case made a dramatic difference. If Jeannette would have won, she would have received 100% of Dennis’s assets as his surviving spouse. Because she lost, Dennis’s surviving heirs were his three siblings who split the contents of his estate. Jeannette had no legal relationship to Dennis and, as a result, got nothing.

There is no way to know what Dennis’s actual goals for his estate were, as he passed away with no plan to dictate what he wanted. While it is possible that he may not have wanted Jeannette to get everything, it is also distinctly possible that he did not want her to get nothing, either. However, that’s exactly what happened because he had no plan. Everyone has a need for a plan, but certain groups of people have even higher needs for plans. People involved in long-term committed relationships but whom are not married are definitely one of these groups. The law generally makes no accommodations for these relationships, meaning that your partner is, in the eyes of the law, a stranger and entitled to nothing from your estate.

Monday, September 25, 2017

Get the Right Kind of Estate Plan to Avoid Problems Down the Road

Summary: Every estate plan is unique, just as everyone’s life circumstances are unique. Sometimes, though, there are certain life events that may point toward a particular type of estate plan. For some people in certain situations, an estate plan with a revocable living trust may offer an especially high degree of benefit. Making the decision to go out and get a plan is essential, but it is also vital to make sure you obtain the right kind of plan.

For an example of how the right kind of estate planning can make a big difference, look at a court case of a man named Michael from South Florida. Michael’s life story involved elements that are probably like many others. He grew up in Pennsylvania and, as a young man in his 20s, married his wife Kelly. As a young father in 1991, he went out and obtained an estate plan with a will. That will left his entire estate to his two children.

As is true for many people, though, life is full of unexpected twists and turns. Kelly developed cancer and, in 2010, she died at the young age of 48. Michael left Pennsylvania and moved to South Florida. There, he befriended a woman named Karen. Eventually, Karen and Michael moved in together and in the fall of 2014, Michael created a new will. This will left everything to Karen. The following March, Michael died.

What ensured was the all-too-common occurrence of strife and estate litigation. Michael’s daughter took the older will and began probating it. Karen went to court three weeks later, seeking to probate the second will. What ensued was a protracted litigation battling over whether Karen had followed all of the required legal rules and whether or not she had legal standing to contest the daughter’s probating the first will. As of August 2017, all that had been resolved, though the course of a trial court and an appeal was that Karen did, in fact, have the legal right to go forward with her court challenge of the 1991 will.

Perhaps Karen will win or perhaps the daughter will ultimately succeed in court. Regardless, it seems highly unlikely that Michael actually intended for his estate to end as the subject of protracted litigation dispute among his loved ones.

Is there a better way? In many cases, there may be. Using the scenario of this man’s estate, a different approach to planning may have provided significant benefits. Once he decided that his estate planning goals had changed, he could have created a new plan with a revocable living trust. That trust could have named Karen as it sole beneficiary and also could have named her as the successor trustee. (In general, beneficiaries – even sole beneficiaries – can be successor trustees of living trusts.)

A plan like might have offered greater clarity and simplicity for Karen. In the court case, had the judges ruled against her, Karen would have lost her right to pursue the benefit promised to her in the 2014 will, all due to the technical rules involved with probate. Trust administration and distribution generally involves many fewer technical rules and time-based restrictions as compared to probate.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.