I’d like to tell you a story about Tom, an imaginary middle aged man. Tom passed away after a long illness. Anticipating his demise, Tom planned his estate by himself and made sure everything was “in order.” He prepared his own will from one he found online. On his deathbed he explained his will to his family so that everyone knew how his assets would pass. He passed away peacefully with his loved ones around him.
Some time later, when his life partner, Abby, visited an attorney she laid out Tom’s wishes and explained how everything was to be passed.
After reviewing all of the information Abby provided, the attorney began to educate her about Tom’s estate. First, it seemed that Tom did not know that his ‘will’ controlled only those assets that were titled in his name alone without any beneficiaries designated. Assets that are jointly titled typically become the property of the surviving owner when someone passes away. And, if a beneficiary has been designated on an account, that person becomes the owner regardless of what a will says. Beneficiary designations override wills.
Second, the attorney noted that Tom named Abby as the beneficiary of his home. It made sense to him because they had been living together for several years and she helped pay the expenses. But, Tom had a minor child, Susie, and Florida law has certain rules regarding homestead when a spouse or minor child exist. Abby became upset because Tom made other provisions for Susie. But, even though Tom made those other provisions he could not just ignore Susie when it came to the homestead.
Finally, Tom knew that Susie was a disabled child. Since he did not want her to receive any assets that would cause her to lose her Medicaid, he designated Abby as the primary beneficiary of his investment account. He trusted that she would use those funds for Susie, and Abby planned to. Unfortunately, when she was unable to pay her bills she decided use those funds.
Had Tom consulted with a qualified attorney all of these problems could have been avoided. An elder law or estate planning attorney would have taken into consideration tom’s entire estate plan. The attorney would not have limited the plan to just writing a will, but would have given guidance to address all of these areas. All of Tom’s assets, where they were located, how they were titled and whether there were beneficiaries named, would have been considered. The attorney would have sought a legal and efficient way of making sure Tom’s wishes would be honored after his passing. Attorneys, like me, who deal with issues like Tom’s and many more, understand how important a planning meeting can be. In that meeting we learn of the person’s wishes as well as their unique circumstances. No estate plan should be cookie cutter, but all should be tailored to the individual’s specific needs.