Estate – When The Battle Begins At Home

I received a heart-wrenching phone call from a young soldier recently. His mother had just died and he was left with the responsibility of settling her estate. He had no idea the difficulties he would encounter–not on the battlefield but here in East Tennessee. The worst part is it could have been completely avoided.

‘Brian’, an Army soldier was on his way to Haiti when he received a phone call that his mother was in the hospital. Her outlook wasn’t good. Forced to take emergency leave, he rushed home. Unfortunately, he was too late. She had already passed away.

His mother never talked with him about her plans so now he doesn’t even know if she had a Will. In the midst of dealing with an emotional loss and feeling the pressure to return to his unit as soon as possible, Brian has to make her funeral arrangements. He also has to get her estate settled.

During his search, Brian came across one of my brochures and called me to see if his mother might have been one of my clients. Turns out she had attended one of my estate planning seminars where she learned about the importance of planning ahead. She even scheduled an appointment, but unfortunately, she didn’t keep it.

There are several challenges Brian now faces. Funeral arrangements will be the first hurdle, but that’s just the tip of the iceberg. At her death, all of his mother’s financial accounts are frozen. So how is he going to pay her bills? He can’t use any of the money in her accounts. That means he or another family member will have to use their own money to pay for things like utility bills, real estate taxes, etc.

Worse yet, who’s in charge? Brian is not an only child. At this point, no one legally has the authority to make any decisions affecting her estate. Who’s responsible for safeguarding her assets and securing her home?

When I spoke to Brian, he had already tried calling several of the local banks to see if his mother had an account there. Thinking a Will might be in a safety deposit box, he was trying to see if she had one.

He wasn’t able to make any progress because banks, credit unions, insurance companies and other financial institutions are prohibited from even acknowledging the existence of an account due to privacy laws. Even if his mother had an account with my firm, I wouldn’t have been able to tell him.

Brian and his siblings will have to hire an attorney and go before a court so that one of them can be appointed the executor of her estate and receive the legal authority to get information on her accounts, pay her bills using her funds and begin the process of settling her estate. Of course, all that takes time.

If a Will is never found it will be up to the courts to decide how her estate is divided. Each state has its own laws regarding what is referred to as intestate succession. Her assets may end up not going to the people she wanted them to. For instance, if she was separated from her husband (but not divorced), he could end up getting 40% of everything, even though she may have wanted it all to go to her children.

Some assets may never be found. What if his mother hid money or other valuables in a secret place in the house? In fact, did you know that it’s estimated that 30% of U. S. Savings Bonds are never redeemed, largely due to them never being found?

It could be a year or longer before this estate gets settled. Thousands of dollars will be needlessly spent. And it could have all been easily avoided.

The moral of Brian’s story is that no matter how young you are, you need to have your affairs in order. You need Powers of Attorney, a Will and maybe a Living Trust. You need to let someone know your wishes and where these documents can be found. It’s not just the right thing to do, it’s your duty. It’s also an act of love to your family.

Mr. Voudrie is a Certified Financial Planner, a nationally syndicated columnist and the President of Legacy Planning Group, Inc., a Private Wealth Management firm in Johnson City, TN. He can be reached by email at [email protected] or by going to

8-Tactics on Easy Estate Planning

Today, February 13, 2007, the current federal estate tax exemption is set at $2 million dollars. It means that people with less than $2 million dollars worth of assets can do their own planning. Contingent upon the complexity of one’s estate, number of heirs, varied assets, certain planning calls for an expert. But, for regular folks leaving money to their heirs, there are other ways to do your own estate planning, offset probate expenses and maximize inheritance:

1. First, visit your state’s web site to determine how much the estate tax exemption is set in your state.

2. Various web sites such as feature downloadable wills, power of attorney agreements and other legal documents. [These power of attorney template contracts run about $20.]

3. Review life insurance and retirement policies. Generally, these accounts can be transferred directly onto beneficiaries.

4. The same theory applies to taxable accounts such as: savings, mutual funds and other investment income account. As long as the benefactor entitles the accounts as “transfer on death” “pay on death” to heirs, proceeds should be directly passed on. However, more intricately individualized financial situations may require differ.

Estate Planning Tip: Large to mega-sized estates necessitate the professional guidance of a lawyer or certified estate planner.

5. For items #2 and 3 (above), title assets to simplify the financial transfer of your death.

6. Open a living trust to stockpile assets.

7. In cases where real estate is owned in another state or country, an attorney with expertise in international law and real estate planning may be necessary.

8. There’s no need to wait until death. Sharing the wealth now can save heirs taxation in the long-term.

Federal-estate tax exemption fact: by the year 2009, the federal-estate tax exemption is slated to grow to $3.5 million.

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