Monday, October 15, 2018

Series: Estate Plannings Hardest Questions

Series: Estate Plannings Hardest Questions
#5 - Answering 'What If They All Die?'
By Melinda Gustafson Gervasi

It begins with the question "Am I correct to assume you want all assets to pass to the surviving spouse?"

Without hesitation, both clients respond "yes."

I return with "And if both of you were to die, either together or one and the other, you want your assets to be shared equally among your children."

Again, without hesitation the clients in unison state "yes."

This time I volley with "and if a child of yours were to predecease you, would his or her share pass to any children he or she may have left?"

My question is often met with a pause and a head snapping back as though it had been slapped.  Looking at one another and then me, the clients stammer "well....well....yes, I guess that seems appropriate."  As a mother as well as a lawyer I can see the glimpse of horror in the clients' eyes; parents die first, not the children, or so it is desired.

I end with "what if neither your spouse nor any of your offspring survive you, what would happen to the estate?  Some clients do not want the state statues to control what happens to their property."

At this point, one if not both clients sit, mouth agape, stunned by the question, saying "well, we NEVER thought of that!" 

"That's my job, imagine the worse case scenario and plan accordingly." I counsel. "It's unpleasant, but important to ask because you may not want your estate to pass according to the statutes."

Nine times out of ten the clients will ask to think about it for a few days.  They could leave it all to some favorite nonprofits.  They could divide it 50/50 and let state statutes control the distribution to his and/or her surviving next of kin.  Or they could do a mixture of distributions: 50% to their surviving siblings; 25% to their faith organization; and 25% to an alumni association.  The options are endless so as the percentages add up to 100% in the end.

We shake hands as the clients leave, I smile saying I enjoyed our conversation and add "please, help yourself to chocolate....I have Frango's in the waiting area.  You deserve one after having me kill off all your loved ones in a space of an hour."  A chuckle usually follows, and nearly all clients opt for a chocolate.

It's hard, asking yourself what will happen to your estate if you are the last one standing.  Yet, it is essential if you do not want state intestacy statutes to distribute your probate estate.

Please note, a blog is NOT legal advice.  Please seek counsel from an attorney in your state for guidance on estate planning and probate for your state of residence.