Don't Let This Happen to You!

When a man learned that he had a terminal illness, he decided to do the responsible thing and draft a will to set his affairs in order. In that will, he divided his entire estate between his four adult children equally, in the hopes that all of his children would have some security once he had gone. The man felt confident in his decision, and fully trusted his children to not only follow his wishes, but to treat each other fairly.

After the man passed away, his children began the process of planning the probate of their father’s will in order to distribute his assets according to his wishes. However, without three of the children’s knowledge, the eldest son had hired an attorney to re-draft his father’s will to distribute the estate in a way that the father had never intended, and had managed to get his father to execute the will before his death, when he was very weak. This new will left 70% of the father’s estate to the eldest son, and 10% to each of the three other children.

The three youngest children were outraged when they heard of their eldest brother’s plot. They hired an attorney to contest the will on the grounds that the father not only had been coerced, but was in no condition mentally to sign the new will in the first place. Though their argument was probably valid, it had no bearing on the outcome of this story. Realizing that his younger siblings would have claims against the new will, months earlier the eldest brother had convinced his father to put all of his assets into joint tenancy with the eldest son, who also gained the right of survivorship. Because the assets were now in joint tenancy, at the father’s death the assets automatically transferred to his eldest son, regardless of the terms of his will, and the issue of whether the new will was valid was immaterial.

Needless to say, the three younger siblings never spoke to their eldest brother again. Was this what the father wanted?

How this situation can be avoided

By creating a revocable trust, the outcome of this story would have been drastically different. The trust could have done several things for the father, including:

• Naming all of the children as trustees and requiring that all decisions regarding his estate be made by majority consent;

• Describing not only the father’s desire for each child to inherit equally, but forbidding the complete split between his children;

• Regularly updating his trust would have ensured that the father could alter his wishes according to family changes and other factors;

• Allowing the father to plan specifically for beneficiaries that have special needs, such as SSI, or planning for the distribution of assets to a beneficiary who is irresponsible with money;

• Setting up a plan for the father’s incompetency—a will only comes into effect upon death, whereas a trust can plan for the appointment of a guardian for you should you become incapacitated prior to your death;

• Keeping the details regarding the father’s assets and distribution of those assets confidential. When an estate is probated, the will, therefore all of the assets described in that will, become a matter of public record, while a trust does not.

• And, last but certainly not least avoiding probate altogether.

What is probate?

When you acquire assets throughout your life, those assets can be titled in several different ways. In many instances, the assets will be owned by you individually. Probate is the process in which a court determines how your property is to be passed to your beneficiaries, either according to the terms of your will (“testate”) or not, if you have not made a will (“intestate”). Intestate succession distributes your assets according to the laws of the state of Oklahoma, or whichever state your property is in. A separate probate will be had in every state in which you have real estate. Without probate, your assets would remain in your name, and could never be transferred to your beneficiaries.

Though probate is necessary where a trust has not been made, the process is typically complicated, costly (typically between 3-10% of the estate) and can take years to complete.

What’s included in your estate plan

If you allow the Mazaheri Law Firm to assist you in your estate planning needs, we can help you to set up an estate plan that works for the specific dynamics of your family. It is our mission to make planning for the most important times in your life and the lives of your loved ones as stress free as possible.

An estate plan created by the Mazaheri Law Firm can include the following:

• Last Will and Testament. If created with a revocable trust, this document is called a “Pour-Over Will,” and will instruct the administrators of your estate to follow the provisions of your trust;

Where a trust has not been created, a traditional Last Will and Testament describing your wishes regarding distribution of your estate can also be prepared.

• Revocable Trust.  This document describes in detail the distribution of your estate and plans for the appointment of a guardian should you become incapacitated.

• Deeds.  If a revocable trust is created, deeds transferring your real estate into your trust will be prepared and filed in the appropriate county. Documents transferring other assets into your trust will also be prepared.

• Durable Power of Attorney.  This document allows you to designate an individual or entity to manage your financial affairs should you become incapacitated.

• Durable Power of Attorney for Health Care Decisions. This document allows you to designate an individual or entity to manage your medical affairs should you become incapacitated.

• Living Will.  This document allows you to make end of life decisions, such as administration of life support.

Don’t neglect these important decisions! Contact The Mazaheri Law Firm for exceptional legal assistance in all areas of estate planning!