Tidbits of estate planning advice
Sometimes great little learning opportunities come through my office that I want to share but there aren’t quite enough to create an entire article. Essentially, these are a number of short stories with great lessons on how to avoid estate-planning messes… before it’s too late. I’ve saved up these tidbits, which have all happened in the last few weeks.
Unknown marriage. A new client came in with his girlfriend to have his estate plan restated (basically, redone). After the initial meeting, we requested the deed from the County (standard procedure so we make sure we have the most recent recorded deed). When we received the deed, it indicated that the client was married to his girlfriend as it clearly stated they took title as “husband and wife”. Embarrassed that I had missed this, I quickly emailed him and apologized that I must have misheard him – he responded, “we are not married!” If you’re confused that makes two of us!
The title company put the property in their names as husband and wife when they were not married. This can cause a break in the chain of title and make your property unmarketable, i.e. worthless. Fix? Check your deeds carefully for these defects as they can be easily fixed before something happens.
Unknown estate plan. New clients came in for a new estate plan and indicated that, although they started the process several years ago, they never signed or finalized the documents. This is actually pretty common. When we researched the deed we found that the house was titled in the name of their trust. After contacting the previous attorneys, we found out that they did have an estate plan and they had finalized it.
Had we not figured this out now, perhaps they would have never remembered and not had the opportunity to find the very important documents they had created. Fix? Keep your documents in a place you can find them and reference them from time to time to be sure they are current.
Sudden calamity. Marathon runner? Check; Healthy Diet? Check; Sudden stroke at age 45? Check. A young man came in who was young, healthy, physically fit and had no pre-existing health conditions – basically no reason to consider estate or incapacity planning. You can see why he was in such disbelief that he had a very serious stroke that, although didn’t kill him, left him realizing that there is no time like the present to handle your estate planning. He couldn’t wait to get it done and thankfully he was given a second chance to do so. Fix? Don’t be in the mindset of “it can’t happen to me” or “I’ll get to it later.”
Last minute deed. A new client came in, the successor trustee of her friend’s trust. He had recently passed away and created his trust just before death. Sadly, he knew he was sick for quite some time but only prepared his documents in his final days. If anyone remembers my previous article about last minute estate planning, you’ll know where this is going.
The deed was signed but had a defect that could have been cured if the planning was done sooner. Now that the settlor is deceased, this cannot be fixed and the house is headed for probate. In addition, the bank accounts were never titled into the trust and therefore, they too are headed to expensive probate-town. Fix? If you are presented with the unfortunate news of poor health or limited life expectancy – contact your estate planning attorney immediately.
These all came into the office in the last few weeks. This is by no means the full list of learning experiences that have come through our doors. If we are able to save just one of you from these mistakes then reading this article is time well spent.
Eric S. Gullotta, JD, CPA, MS (Tax) focuses on estate planning and taxation law. His office is located at 232 West Napa Street, Suite A, in Sonoma. Contact him at 938.7234 or visit Gullottalaw.com.
