Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,
American Academy of Estate Planning Attorneys, Inc.
Whether or not we plan to do so, each of us will face death eventually. However, by planning, we can make our passing easier and better in many ways for those we leave behind. This is the first of a series on the ways we can ease the transition through planning. This first article focuses on privacy. The next article will focus on how you leave assets to your loved ones.
Let’s look at two people who die in the same car accident. It’s a tragedy for both of them and their families. But, the impact on their loved ones is different. Each of them had a house and $300,000 of other assets. The first, John, held all his assets in his own individual name. The second, Becky, had planned her estate with an estate planning attorney and had all her assets in a trust.
John’s assets would have to go through the probate process. Probate is the process of paying valid creditors and changing the title of assets in the name of the deceased person to the rightful recipients. If John didn’t have a will, the rightful recipients would be his intestate heirs under state law. These may or may not be the people John wanted to benefit. For example, if he died unmarried and without descendants, his assets might get divided equally among his siblings, including the brother with whom he didn’t have a relationship. Most importantly, probate is a public court process. As such, with rare exceptions, anyone could look at court records and see whether John had left a will and could ask to see his will. They could see who his creditors were. They could see if he had left some of his assets to someone who might have been a girlfriend or boyfriend. Nosy neighbors and scam artists could discover exactly what John’s assets were and to whom they were going. John’s loved ones could be the victims of scams right when they were most vulnerable. John’s loved ones and heirs, who might be young adults, might be approached by scam artists and swindled out of their inheritances. This certainly would not be what John would want to happen.
On the other hand, Becky had planned her estate and her assets were held in a trust. As a result, Becky’s assets didn’t need to go through the public probate process. Her assets went to her loved ones in the manner and shares she had deemed appropriate. Her loved ones could grieve in private without being pestered by the uncaring and unscrupulous.
While both John and Becky died tragically and unexpectedly, Becky’s planning made it easier for her loved ones to carry on with their lives. The next article in the series will focus on how you leave assets to your loved ones.
Litherland, Kennedy & Associates, APC, Attorneys at Law are members of the American Academy of Estate Planning Attorneys. If you would like to learn more about the importance of estate planning, we invite you to attend one of our free estate planning seminars.
Roy has an undergraduate degree in accounting from Indiana State University, and a Juris Doctor degree from Indiana University. He graduated from law school in 1973. Roy was a member of the legal fraternity of Phi Delta Phi and president of the local chapter at Indiana University Law School in 1972-73. In law school he was a recipient of the Dean Faust Award and received awards and honors in income taxation and estate and gift taxation.