August 21, 2014










Client Case Study: Be Organized, or else

A few months ago, I met with a client who wished to update his Last Will and Testament and learn how to protect his assets against the cost of Long Term Care. He was widowed, had a partner of 10 years and two children from his previous marriage. He was 85 years old. His assets included his primary residence and modest savings, mostly in the form of CD’s.

He wished to leave his assets to his partner and one of his daughters – disinheriting the other daughter. Because of this – and because he wanted to protect his assets – I suggested that he create an Irrevocable Trust. This would help protect his assets in case he had to be placed in a nursing home or require the assistance of a home health aide. More importantly, perhaps, it would allow his estate to avoid the probate process – especially important when disinheriting a child.

Probate is the process of proving the validity of the will and administering the estate. During this process, all children are asked to be involved by consenting to the appointment of the named Executor – including those who are disinherited. Because he wanted to disinherit a child, I thought that the probate process could be difficult for his partner and other daughter.

He decided to take my advise and create a Trust and then transfer his assets to the trust, including the deed to the house. We began the process by drafting and executing the Trust agreement. Unfortunately, he could not find the deed to his house. He took more time to try and locate the deed, but to no avail could not locate it. We eventually found the deed with the assistance of a Title company.

Unfortunately, before we had time to draft and sign the deed, my client passed away. The house, therefore, was not owned by the Trust. Accordingly, the house would pass through the Will, forcing probate. Because the Will states that one of his daughter is not to inherit, we expect there to be a contested proceeding.

It is all too common for individuals not to know exactly where their important documents are located. Whether they be Wills and Trusts, Powers of Attorney and Health Care Proxies, Deeds and Health Insurance information, or a list of bank accounts, it is important that you be organized and know where everything is located so that when the time, comes there are not unnecessary delays that cause unnecessary problems.