Everyone now and then, we get cases that really hit home with us and make it clear how important estate planning really is. I have one of those cases right now.
I recently started working on a probate case with a sweet, older woman, Mary, who’s best friend, Sarah, had passed away.
Sarah’s husband predeceased her, passing away 20 years ago.
Sarah has two adult children that she was estranged from and had not spoken to in many years.
Mary, who was younger than Sarah, had been looking out for Sarah and helping take care of her.
Before she passed away, Sarah had recently updated her will, leaving everything to Mary and requesting that she be appointed as personal representative, or executor, of her estate. Sarah had even signed a deed leaving her home to Mary.
After Sarah passed away, Mary took care of and paid for everything, including a rather expensive funeral. Sarah’s children did not attend.
Mary made an appointment with me to start the probate process. I met with Mary and we reviewed all of Sarah’s assets, which included numerous bank accounts, money market accounts, and annuities. It was quite a bit of money!
However, as we started delving into the details, we discovered a big problem. Although Sarah had signed a will that was very clear with her wishes – everything to Mary – she had neglected to update the beneficiaries on her financial accounts that had been in place for decades.
Whenever a beneficiary is listed on a financial account, that designation overrides a will.
The money will pass directly to the beneficiary, outside of any probate process.
Perhaps Sarah forgot she had listed her children on these accounts, or she never got around to changing them.
Either way, the estranged children that did not attend her funeral will be inheriting all the money in Sarah’s accounts.
Even worse, since there is no money in Sarah’s estate, Mary will not be repaid for all of the funeral expenses that she paid out of her own pocket.
*Names have been changed
What is the moral of this story?
A do-it-yourself will may not carry out your wishes.
It is important to meet with a qualified estate planning attorney who can look at the big picture and make sure all the pieces of your estate fit together to achieve your ultimate goals.
A do-it-yourself will might work for you, depending on your situation, but it’s always better to be safe than sorry!