One of the issues that we see consistently is the issue of accidental disinheritance. Accidental disinheritance is the process where the natural children of a couple get disinherited due to changes late in life of a couple and when the “cheap and easy” estate planning solution was used instead of the proper planning. Let me explain.
Consider a couple called Bill and Barbara. Bill and Barbara have two children George and Sue. Bill and Barbara have been married for 40 years and have the typical assets – a house, two cars, bank accounts, retirement accounts, as well as Bill’s coin collection and Barbara’s jewelry that she got from her grandmother. Bill has told George that George could have the coin collection and Barbara promised all the jewelry to Sue as her heirloom. Given that Bill and Barbara have been together for so long, they decided to title everything jointly, including their home, cars, etc. Upon Barbara’s death, it all automatically became Bill’s property. Bill told his children that nothing would change and, upon his death, they would get everything. After several years of living alone, Bill met a new woman named Amy and married her.
After 10 years of marriage, Bill finally passed away. Upon his death, George and Sue found out that he had titled everything with Amy jointly – just like with Barbara. Unfortunately, Amy did not agree that George and Sue should get everything from Bill’s estate. Instead, she thought that it should all pass to her children. Legally, Amy is correct. All the assets belong to her and she can make her children the heirs of the estate, including the jewelry that should have gone to Sue and the coin collection to George.
This scenario also occur when spouses divorce later in life, which we are seeing with more and more frequency.It is a regular occurrence that I get questions from the disinherited children about the assets and how to get them back into the “family.” George and Sue are obviously upset and are even willing to spend money to recover these assets that they believe are their rightful inheritance. Unfortunately, I have to tell them that, according to the law, the assets are no longer theirs and that Amy is correct legally. Further, I get questions from Amy regularly on how her spouse’s ungrateful children are trying to make her homeless and take all of her possessions.
There is a simple answer to this family conundrum, however. First, the title of the property should not be jointly titled. Instead, the property should be placed in a trust (or even a will). That way, the income from Bill’s assets can be used to take care of Amy while she is still living. Upon her death, then the assets will pass to George and Sue. We typically draft such that the home will be available to Amy during her lifetime. I even have clients that are willing to sell the home to take care of Amy, but want the heirlooms to pass to their children.
In sum, we see a lot of upset clients due to being accidentally disinherited. This accidental disinheritance can be easily avoided through proper planning, instead of just using the “cheap and easy” method. If you take the time and effort to plan properly, then these issues can be prevented and your family can be at ease. Consulting with an experienced attorney such as the Estate Planning Lawyer Leawood KS locals trust.
Thanks to our authors at Eastman Law firm for their insight into Estate and Probate Law.