For Clients, Community, Professional Advisors.

At least once per year (and sometimes more often) we receive a phone call from the children of one of our clients.  It sounds like this:  “Dad died yesterday.  We’re trying to find the original of his will (and/or trust).  Does your office have it?  Might you know where it is?”

In a recent case, three different copies of a will showed up and were filed in court.  The judge refused to admit any of them to probate because it appeared all were copies.  This will cause major difficulties in the settlement of the estate.

So, “Do you know where the original of YOUR will or your trust is?”  More importantly, does your executor (or your trustee) know where to find it?

It’s true that many law firms have a vault that is filled with original wills of their clients over decades and decades.  They want the appointed executor or trustee or the family to call them when the time comes to settle the estate.  It’s good business for many law firms. That works for many firms and many clients.  We’ve gone a different direction.  We’ve taken the approach that, if we maintain a good relationship with our clients and their families, they will want to come to us.  So, as a matter of practice, we don’t have a “will vault”.  We are very specific on how we instruct our clients.

We take time to prepare our clients’ original estate planning documents on high quality paper and bind them together in a complete package.  At our final meeting when a plan is created or amended and restated, I am very specific.  I ask each client where it is they intend to store the originals of the documents.  My file contains an annotation on what they tell me.  I recommend that they keep the originals in a fire-proof safe box either in their home or in a safe deposit box at a bank (titled in a way that the appropriate persons will have access at the right time).  We try to keep a record of where the originals are located so that when that phone call comes, we can say, “Look in the fireproof box in the closet”.   We review the status and placement of the documents at each client’s annual review.

It’s equally important, however, that the appropriate people (executor, trustee and sometimes the heirs) know where to find the documents.  That’s why we often have a short “family meeting” when a family estate plan is completed. In this meeting, I will briefly review the highlights of the plan (using a color diagram) and then talk about roles.  These meetings rarely take more than 30 minutes.

Our job is to ensure that not only that the plan is accomplished, but that it works when it is needed.

Do you know where the original of YOUR will is?

For Community, Clients, Advisors

In the first installment of this blog series, I described how, for one family we recently represented, procrastination caused unnecessary delay, expense and worry that their objectives would not be achieved. In the second installment, I discussed a case currently in my office where delay and a reliance on joint tenancy property caused husband and wife’s estates to be court supervised.

The final installment in this series is simpler. It applies particularly to older folks, but really to anyone.

Betty is 91 years old. She is very proud that she has been living independently. In the last few months, however, her two sons have begun to notice that her short-term memory has been limited. She does not remember what happened earlier the same day and asks the same question several times within a 20-minute period. They are concerned about this.

Earlier this year, Betty fell and required surgery. Her sons were told that she might not be able to walk again. Betty made it very clear: She wanted to continue to live at home. She did not want to be admitted to a nursing home facility under any circumstance. However, an individual with early dementia who cannot ambulate requires round-the-clock care.

I met with her sons. We made a plan to create a new trust for Betty and use her assets to hire round-the-clock aides to care for her. (The objective was not to spend down her assets to qualify for Medicaid).

I drafted the trust and other instruments to implement the plan. Unfortunately, Betty did not return to her home for very long. She passed away a week later. The plan was never signed or implemented.

Lesson learned. It can, of course, happen to anyone. But after a serious illness or a fall, folks in their 80s and 90s can be subject to rapid decline. Sometimes, even with the best intentions, it’s not possible to implement a plan at the last minute.

The best course of action is not just to think about it “some day”, but to ensure that your estate plan is always up to date.

For Community, Clients, Advisors

In the first installment of this blog series, I described how procrastination caused unnecessary delay, expense, and worry for one family we recently represented.  Here is another.

What I now describe is a matter in our office right now.  I have the family’s permission to write and publish this expressly for the purpose of helping other families.

Phyllis and Sam.

Phyllis and Sam were in their 80s.  They lived comfortably in Skokie.  They had two adoring daughters and several grandchildren.  They lived frugally during their lifetimes and have accumulated some assets in brokerage accounts, IRAs, stocks and bonds (share certificates and reinvestment accounts with the share transfer agent) and their home.  They had no debt.  Some of the accounts were in Phyllis’s name only.  Some were in Sam’s name only.  But, mostly, the accounts and the house were titled in joint tenancy.

They had wills prepared in 1992 by another firm.  They were “simple” wills that made bequests to their grandchildren, generous gifts to several charities and left the remainder equally to their two daughters.  No trust was prepared.  As they got older, they began to have some health problems.  Of course, the Number One priority was taking care of Phyllis and Sam.  Sam had severe diabetic problems that led to the need for regularly scheduled dialysis.

Phyllis Dies.

Soon, Phyllis began to forget things and increasingly needed help in managing daily affairs.  In 2010, the family was informed that she had a brain tumor and that her life expectancy was likely quite limited.  The family rallied.  Both daughters live in adjoining suburbs and were there to help.  However, they weren’t really worried about their estate because they had wills and most of the assets were in joint tenancy.  Phyllis died just a few weeks ago.

Sam did okay for a short while.  But soon, without his wife, he realized that, with multiple health issues, his quality of life was simply not what he wanted it to be.  His daughters were with him, helping him constantly.  His grandchildren came to see him.  He made a very clear, knowing decision that he would stop dialysis, fully understanding the consequences of his actions.

Soon thereafter, his daughters reviewed his 1992 will with him.  They asked, “Dad, does this will reflect what you want to happen now?”  His answer was, “No, not really”.   He described for them the relatively minor changes he wanted made.   The next day, the daughters met with me to review the changes that Sam wanted.

I looked at all of the assets – the brokerage accounts, stocks, bonds, real estate.  I wanted Sam to have a revocable trust because all of the property could be distributed exactly as he wished by the two daughters without government interference upon his death.

Sam Dies.

We needed to revise his will very quickly.  There was no time to implement and fund a trust. Sam’s daughters knew that his mental condition could change at any time.  He had stopped dialysis.  His other medical conditions had forced another hospital stay.  I had to draft a new will over the weekend.

On Monday, Karen and I went to the hospital and met with Sam to ensure that the will reflected what he wanted done.  The will was signed in accordance with the legal requirements on Monday afternoon.  Sam would not have had the legal competence to sign a new will had we come the next day.

Sam passed away on Friday, just a few short weeks after Phyllis died.

Estate Settlement.

So, how do we settle Sam’s estate?  What do we have to do?

Suzanne and I have now met with the heirs and have an inventory of all the assets.  All of Phyllis’s assets will become the property of Sam’s estate.  All of Sam’s sole property and the property received from Phyllis’s estate will be distributed to the other heirs and the daughters.

Unfortunately, the only way to settle both these estates is to bring two probate estates in the Circuit Court of Cook County.  It makes the estate settlement laborious and time consuming compared to a private trust settlement.

The good news?  There are provisions for “independent administration” in Illinois probate law.  This will allow the daughters to handle most of the administration work without court supervision.  It will ease the burden to a great degree.

Lessons Learned.

So, what lesson have Phyllis, Sam and their family taught us?  There are two.  First, procrastination in estate planning limits the options available.  Don’t wait.  No one expects both spouses to die in rapid order, but, it does happen.  Second, while joint tenancy accounts are a simple solution and work well if one spouse dies, there can be severe complications, and they don’t work in the event of a common disaster or in the event that one spouse dies soon after the other.

I’m going to do everything I can to make the estate settlement as easy as possible.  However, I wish I could have helped this family more.

For Community, Clients, Advisors

In the last year or two, our firm has represented three families who have come to us under circumstances where it was too late for us to help them plan.  I’d like to tell you a little bit about each of their experiences, in hopes their lessons can save you some unnecessary troubles. Here’s the first example. More will follow in each of my next two blog posts. 

Dorothy L. was referred to us from another law firm, months before her untimely death. She had two daughters. One, Evelyn, is single and unable to work due to chronic disease, and is receiving social security disability benefits.   Dorothy wanted her other daughter, Judy, to be in charge of things.  It was critical to Dorothy to ensure that Evelyn’s social security benefits not be at risk if she received an inheritance.

Dorothy intended to call me for an appointment, but never did.  How do I know this?  I’m told that at the time of her death, the daughters found a copy of the old will next to her bed. On it was a PostIt note  containing my name and phone number. 

If Dorothy had picked up the phone to call me, we could have created a special trust to ensure that Evelyn’s benefits were never disturbed.  After her death, it was very complicated to accomplish this objective.  We had to take many extra steps, taking a lot of time and money to fulfill Dorothy’s wishes and protect Evelyn’s benefits.  The significant additional cost and delay were not the major concern, however.

Evelyn and Judy spent months literally in limbo, wondering and worrying if Evelyn would be able to receive her inheritance.  Their nights of worry were needless.  Had Dorothy just picked up the phone, her children would have had less cost and delay in settling her estate, and far less worry and stress after the fact.

Consider:  It’s not the dollars and cents that are of the highest concern.  At what is often a difficult time already, it’s the high stress and worry on the family that is most easily avoided.  Here is the biggest issue:  Without taking some kind of action:  most people don’t consider that their important objectives simply might not be accomplished.

Do you know someone who has talked about a will or a trust or an estate plan for a long time but just hasn’t “gotten around to it?”   

The High Cost of Procrastination: Part II of III, in the next “episode” of my blog.