Estate Planning—A False Sense of Security

Facebook
Twitter
LinkedIn
Unresolved estate issues can cause a host of problems. If your estate is not handled properly, you could place a burden on your heirs and loved ones.

My Mother’s Passing

When my mother passed away my brother, sister, and I thought settling her estate would be a simple administrative process. Mom had gone to the best estate planning firm in her city and had set up a trust that was supposed to settle the estate. As successor trustee, I had reviewed the trust and anticipated no issues.

The problem was that Mom had not properly funded the trust despite me, and her attorney, telling her this was a necessary step. If assets such as bank accounts, vehicles, real estate, and mineral rights are not titled in the trust’s name but remain in the person’s name, the trust can not be used to transfer ownership. To compound things further, Mom thought the trust had everything covered so she did not have a will.

We settled the assets that were titled in the name of trust quickly. For the rest of the assets, we had to open an Intestate Estate which means an Estate where there is no will. I was appointed the personal representative and instructed to settle the estate based on her state’s statutes for the order of precedence—which means who gets what based on state law. Fortunately, her state specified that if she had no living spouse, which she didn’t, her assets were to be split between her surviving children. This is what she had intended.

Now we had to find her assets. Everything in her home was easy. Going through her files allowed us to find other assets we didn’t know about such as a bond from the Elks Club she somehow owned. We also found life insurance policies and annuities we weren’t aware of.

The most difficult aspect of identifying her assets were mineral rights she owned which were spread over three counties. We found these by reviewing her father’s will from his passing in 1967. We discovered that the ownership of the mineral deeds had never been transferred to her and her brother so we had to reopen his estate to complete the process of moving ownership to each of them and then down to us. Because there was little mineral production on these deeds it was a long, complicated process with very little reward but, who knows, maybe someday it will be worth it.

One positive thing we found when going through Mom’s belongings were several photo albums that go back to the 1880s. The problem is none of the photos are labeled so we don’t know who the people in them are. We will get together with our uncle this summer to sort through them and see if he can recall who these people are.

The story of settling Mom’s estate is not an isolated incident. Over my twenty years as a financial advisor, I have helped clients settle countless estates. What my family went through is more the norm rather than the exception. I decided that there had to be a way to make estate settlement easy for a layperson and to create a method to preserve family history.

Several months ago, with the help of attorneys and input from clients, I designed Legacy Guide. Legacy Guide provides a solution to both areas lacking in traditional estate planning: Preserving family history and providing a streamlined method of estate settlement.

Preserving Family History

Our goal in this portion of the program was to make it easy to document your family’s history. We felt writing the history, essentially writing a family biography, would be a daunting task that most people wouldn’t start, let alone finish. Because most history is maintained through photographs, we made it simple. You upload digital copies of your photos onto your Legacy Guide site, date them, and enter whatever text is needed to explain the context of the photo and who, or what is in the photo.

By starting with the most important photos you have, very quickly your Family History, or your Life Story, will start to emerge. When you are gone, those who you had specified will receive a copy of the history you have put together. If they would like, your loved ones can transfer your history to their own Legacy Guide account and pick up where you left off. Think about what it would mean to you to have your family history documented back through the generations.

Ease of Estate Settlement

Wills and trusts are written in the language of attorneys. While a necessary part of a complete estate plan these documents are often difficult to understand. Wills and trusts also are vague in some areas. For instance, my mother’s Trust specified that everything should be split equally between the three of us. How do you split an antique shotgun? How do you split a signed Frederic Remington print we all loved? My siblings and I worked through these issues without too much animosity but I have seen families split apart by arguments over personal assets.

Legacy Guide provides an easy way to document your assets, all of them, including the personal assets, and to specify to whom you would like them to go to. If you would like, you can even enter a note explaining why you made the decision you did. For those using a Trust settlement process, a Schedule A—Personal Assets report can be printed and attached to the trust. For those using a probate (will) settlement process, a Memorandum of Personal Assets report can be printed which is a legally recognized document in 32 states and can be attached to the will. Even in states where it isn’t recognized, it can provide additional direction to the executor to help eliminate squabbles over personal assets.

Along with the two reports listed above, Legacy Guide also provides detailed step-by-step instructions on how to settle your estate. Your successor trustee or executor will know what documents are needed by each institution where a title change is necessary and they will know who to contact. An estate inventory, a necessary document to settle all estates, can also be printed once all assets have been valued that can be filed with probate court or given to trust beneficiaries.

We all want to be remembered by our loved ones in a positive light. Don’t let one of your loved ones’ last memories of you be an excruciating, complicated estate settlement.

Bruce Larsen

Bruce Larsen

Bruce Larsen is Presidential Wealth Management's Director of Enterprise Solutions as well as a senior financial advisor. Bruce is also the author of A Concise Guide to Taxes in Retirement and the creator and developer of Legacy Guide.

LEGACY GUIDE: FREE 30 DAY TRIAL

What is a Legacy?

Your legacy is defined in two ways:

1: The distribution of your property and wealth through inheritance.

2: Your life story and values passed along to family and friends.

Legacy Guide gives you an easy way to ensure that you take care of both aspects of your legacy—and much more.

Podcast: COMPOUND INTEREST

Jason and Bruce discuss how compound interest adds up for the patient investor.

The Eagle’s nest podcast

Episode 11

JANUARY 11, 2019

Jason and Bruce discuss how compound interest adds up for the patient investor.

run time: 42:06

Close Menu