(Well, you know, we’d all love to hear the plan)
This posting is a composite account of many cases we have worked on over the years. The names and events have been changed to avoid disclosing confidential client information.
Ok, so it is a bad parody of the old Beatle’s song (Revolution), but this is the season for making resolutions and one that everyone should make and keep is to get their affairs in order. So many of us put off tasks like organizing our personal files or our finances, or making sure our estate plan is current. So long as nothing happens to us, there is always tomorrow, but, alas, things do happen.
Jack was a brilliant and successful entrepreneur, but Jack was not, ahem, a detail person and rarely dotted an “I” or crossed a “T.” When Jack died, his wife and children were left with a confusing pile of vague and sometimes contradictory documents regarding the ownership of Jack’s various business enterprises and investment assets. Not surprisingly, Jack’s Will was in little better shape. The family incurred well over $100,000 in legal costs to sort things out and faced an even bigger bill from the IRS. Jack was really smart and as honest as the day is long, but he couldn’t admit he needed help with the details.
Clark and his only child, Robert, were estranged for many years, and Clark’s Will left all of his property to other family members. Clark and Robert reconciled in the last few years of Clark’s life, but Clark never got around to changing his Will before he died. However, in a testament to human nature, the various recipients of his property realized that Clark really wanted Robert to get his property and each of them gave his or her share to Robert – a tremendous gesture on the part of each of them, but one that would not have been necessary had Clark fixed things while he was alive. Also, in this case, circumstances worked out so there were no adverse tax consequences to the family, which is not always the case. Moreover, some families are not so altruistic under similar circumstances.
Finding the records of an incapacitated or a deceased person is often very challenging and expensive. A small amount of time planning and organizing during life can save a lot of time and money later. Several of my clients send me updated lists each year of their current assets and the location of those assets. These lists often include the names and contact information for their current advisers (accountant, attorney, stock broker, etc.). Preparing one of these lists is not difficult. You should tell the persons you named as executor in your Will, as agent in your power of attorney, or as trustee of your trust the location of the list and your other important documents, or tell them who they can contact for that information in the event of your death or incapacity. Moreover, be sure someone besides you has access to your safe deposit box or else it may be necessary to get a court order to access your important papers. Finally, if your estate plan is out of date, don’t put off changing it until tomorrow, as there comes a time for each of us when there is no tomorrow.
