Avoiding Problems is Key

Like golf, we measure success in estate planning by number of problems avoided.  A good estate plan is important part of protecting what you have because it will ensure that your wishes will be fulfilled in a number of scenarios.  Guardianship, conservatorship, formal probate, incompetency hearings, high court fees, unnecessary taxes, loss of assets to divorcing in-laws, to name a few, are the things a good estate plan can avoid.  If we avoid the above problems, we have been very successful with our planning.  However, there is more that can be accomplished. 

Let s say, for instance, that a couple, Max and Ruby each have one child from a prior marriage.  Max and Ruby have purchased a home together and it is owned as joint tenants with the right of survivorship.  If one of them passes, then the survivor will become full owner by operation of law.  The filing of the death certificate in the register of Deeds office will transfer title to the survivor.  Let us assume Ruby survives.  If that happens and there is no planning, then Ruby will be full owner of the real estate and thus the real estate might eventually be left solely to Ruby’s child, disinheriting Max’s child.   Is this what Max wanted?  No. It is not. 

A good estate plan avoids known problems, and ensures affirmative goals will be fulfilled.  As in the case above, Max and Ruby wanted to benefit each other, but they also wanted to ensure they would not disinherit their child.  Remember, they each have one child from a prior marriage.  Using a trust to control the remainder interest in the real estate is a solid method to ensure that Max and Ruby can benefit each other and also ensure the appropriate remainder interest will go to their respective children (1/2 to Ruby’s child and ½ to Max’s child).       

Mark F. Winn

Attorney at Law, PLLC