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wealthy dollar bills

There is a rumor that has been floating around that only the rich need estate planning. That is extremely false. Everyone needs an estate plan, but the wealthy don’t need estate planning as much as the middle-class and working-class folks. If this contradicts everything you’ve ever thought about estate planning allow me to explain.

The Case of Kingston Lear

Suppose Kingston Lear (get it?!), a wealthy Iowan, decides he doesn’t need a qualified and experienced estate planner, he can do it himself, or use an online, one-size-fits-all service. Hey, Lear figures, this way he’s saving both time and money. Also, nothing is going to happen to him for a while, he can get around to doing a proper estate plan with a proper estate planning professional “someday.”

Of course, “someday” never comes, but Lear’s death does. His three daughters are aghast that Lear has no real estate plan. The template resembling an estate plan is completely inadequate for the size and complexity of Lear’s assets.

A Matter of Trusts

Lear could have easily, with the help of a professional advisor, set up a trust (even a plain, “vanilla” revocable living trust would have worked) to avoid probate. But, the online service he used didn’t even explain the difference between wills and trusts. So, Lear’s assets all must go through probate. This means that the time and money Lear though he was saving is gone in a flash.

Probate Costs and Fees, If You Please

Probate fees are going to equate to at least 2% cut of Lear’s estate. Remember, Lear’s estate is large and complex and valued at $10 million, so the actual figure is probably going to be more like four percent.

Using 4% as the figure for probate fees means a loss of $40,000 ($10 million X .04 = $400,000). This is $400,000 that could have been passed down to his daughters through a trust, or split generously between his heirs and charitable organizations near and dear to Lear’s heart.

Also, court costs may amount to another 1%, or loss of $10,000 more ($10 million X .01 = $100,000).

Loss of Privacy

Another major benefit of a trust—again, not explained to Lear because didn’t seek any individualized advice—is privacy. A will (or most any document that goes through probate, absent very special circumstances) is simply a public document. Anyone can read, copy, share, and write about it.

Consider one of Lear’s major assets was an ongoing business—a Shakespearean-themed jousting complex, where families could have fun practicing jousting.

horses at fence

Unfortunately, in some of the probate papers, it was disclosed that there had been numerous complaints by the Iowa Horse Association about the treatment of horses. It isn’t long until this hits the blogs, and some of the more sensational aspects of the report (though hotly disputed) goes viral. The jousting park, which had been quite profitable, is now eschewed by all the good people of the area. The daughters are forced to sell the business asset to preserve the family’s good name (or what’s left of it) and sell at a loss. While the jousting park had been worth as much as $1 million, the daughters have to sell, so there’s a “paper loss,” but nonetheless less a loss, of another $900,000.

Loss of Future Profits

The $900,000 is a conservative figure; it doesn’t include lost future profits. If not for the scandal becoming public, who knows how long the jousting park could have remained really popular and this profitable. Years? Decades? It’s quite difficult to quantify, but it’s certainly probable that there are some lost profits. The question is: how much?

Costs of Cases

Because Lear’s will wasn’t drafted by professional, there are many ambiguities and loopholes. It’s not long before the three daughters begin fighting and, with unclear direction from their father, they wind up suing each other.

Taking a court case all the way to trial can easily mean $50,000 in attorney’s fees, plus each daughter will want and need her own attorney. So, another $150,000 is lost to attorney’s fees!

Total Losses Equal?

Lear could have had his estate plan done by an Iowa professional for a few thousand dollars. Instead, he lost a total far greater than that:

  • Probate Fees: $400,000
  • Probate Court Costs: $100,000
  • Loss on Sale of Jousting Park: $900,000
  • Loss of Future Profits of Jousting Park: Incalculable?
  • Attorney’s Fees for Daughters’ Litigation $150,000

This is a hit for the inheritance of $1.55 million, leaving $8.5 million (rounded up), or a little less than $3 million per daughter. But you know what? That still leaves an inheritance of $8.5 million to be split amongst three sisters.

The Rich Can Afford Bad Estate Planning

crown silver

Lear acted unwisely, arguably recklessly! A great deal of his money was wasted that could have been used for great charitable work in Iowa through local nonprofit organizations. But, for all his foolishness, Lear’s daughters still end up with $3 million each. Will the daughters incur much suffering with “only” $3 million? No.

That’s the rub; the rich can afford to make big (and small) estate planning mistakes.

You Can’t Afford Poor Quality Estate Planning

Let’s look at this from a normal Iowan perspective. At least 2% in probate costs and fees, a huge drop in value in a key asset, attorney’s fees for litigation…can a middle-class estate merely shrug these kinds of losses off? Not a chance.

The rich aren’t like you and me. They can badly botch estate planning. You and I can’t afford to make mistakes with our estates; there’s no room (and not enough money!) for error.

Need an estate plan but aren’t sure where to start? It’s easy from start to finish. Fill out my obligation-free Estate Plan Questionnaire or contact me.

table with book and tea

Often when I’m reading fiction I’ll find estate planning-related issues that cause conflicts, both big and small, for the characters. And, while the stories may be fictitious, the lessons they give us serve as valuable reminders of the importance of quality estate planning.

One such tale I recently revisited is the 1845 gothic novel, Wuthering Heights, in which author Emily Brontë swiftly weaves in ample estate planning issues with English family drama worthy of the Kardashians.

While many estate planning laws and practices have evolved and changed since the mid-1800s, many also have not. Indeed, the outcome of failing to create a valid, quality estate plan certainly has not.

All in the Family

Wuthering Heights twists and turns with love, revenge, birth, and death spanning some thirty-something years from the late 1700s to 1803. Among many other plot devices, conflict rests on the real property (named Wuthering Heights and Thrushcross Grange) that a man named Heathcliff comes to in possession of through a number of different property rights and inheritance laws. In this way English common law has its own sort of starring role in the book, a character for which Bronte shows an impressive grasp of.

Of course, I don’t want to spoil the book because it’s a classic and you should enjoy the experience of exploring it yourself. So, without any spoilers there’s a lot of family conflict and one of the characters (Heathcliff) taking vengeful advantage of a number of unfair laws (especially those discriminating against women) of the time to gain property and power over his siblings. What were these unjust laws you ask? For one, married women couldn’t legally own property in England during this period. Additionally, inheritances generally passed to sons only. (If a father did not have sons and did not specifically name a daughter as a beneficiary, the father’s closest male relative would usually become the heir to the father’s estate.)

Yet, the irony of Heathcliff’s unyielding (and suspect) property acquisition is that in the end, he failed to make an estate plan and therefore failed to seize his opportunity to decide to whom and when he wants his things to pass. Apparently, he had thought about it, but likely did what so many of us do and made excuses and put it off until it was tragically too late. (Again, no spoilers, but Heathcliff’s ending is no fairytale.)

First Wuthering Heights Lesson: Stop the Procrastination

This brings us to our first important Wuthering Heights estate planning lesson: make an estate plan. Seriously, every adult needs an estate plan, as you never know when unexpected death or incapacitation may occur. For instance, you’ll want to have a health care power of attorney in place before a medical emergency occurs. And if/when it does, you’ll want your assets to go to the beneficiaries of your choosing. Having a valid estate plan in place also saves your loved ones ample time, energy, and money in court costs and lawyers’ fees.

What Happened to the Estate

Because Heathcliff lived in 19th century England, without a valid will in place at the time of his death and without a clear heir at law or living spouse, Heathcliff’s property was “escheat,” a common law doctrine that made sure property was not in limbo without a recognized owner. This meant the property passed to the “Crown” (basically whomever the feudal lord of the area was, or in modern day it would be as if the property was held by the state) and then eventually passed to Heathcliff’s next generation of family members. Now, Heathcliff, given his history with his family, may not have chosen for his unqualified nephew (and niece) to inherit his property. Heathcliff may have wanted to make charitable bequests of his property to a charitable organization he supported. But, the fact of the matter is he didn’t have a will, let alone an estate plan, so then inheritance laws and the judicial system made these personal decisions for him.

As an estate planning attorney, I can assure you this is not something that only happens in books. Without a valid will in place your estate will go through a process called intestate succession where the Iowa probate process and the courts will decide how your hard-earned property is to be distributed. This can take a long time, cost a great deal in fees and court costs, and your property may end up transferred to beneficiaries you never would have selected. Plus, without an estate plan, you cannot give upon your death to charity.

Second Wuthering Heights Lesson: Intestate Succession

Dying in Iowa without an estate plan is different than dying in 1800s England, but what does the intestate succession process actually look like?

It depends on the family situation. If married, the estate will pass to the surviving spouse. If there’s a surviving spouse and living children (whom are not children of the surviving spouse, but children of the deceased), then the estate will be split with half to the spouse and half divided amongst the living children (often referred to as “issue” in legal speak). If there is no spouse and no children, then the division process works its way down a list of surviving family members from parents, then to grandparents, then great-grandparents…and if no one from that list is alive than the estate would pass to the deceased spouse’s issue (such as stepchildren). Finally, if there are no family members living to inherit the estate, the intestate property will escheat (remember when we talked about that before) to the state of Iowa.

Assets that are inherited via beneficiary designations (such as 401ks, IRAs, annuities, checking accounts, and pensions) only become the property of the probate estate and pass through the intestate succession process if no beneficiary is named.

Note well that these highlighted provisions are just the basics. Other statutes come into play with the intestate process pertaining to various personal and financial situations.

Just as enlisting an attorney to help you craft a quality, individualized estate plan, it’s important that an attorney is brought on by the surviving family of the person who died intestate in working out how property will be divided.

brown books on shelf

Write Your Plan Before “The End”

The bottom line is: don’t be Heathcliff. Every adult (even young adults, and especially adults with minor children) needs to make an estate plan. Not only will this help your family avoid the worst-case scenario of litigation, it will also allow you the benefit of determining who you want inheriting your estate and when. You shouldn’t rely on the rules of intestate succession for dispersal of all the assets you acquired over the course of a life.

Lucky for you, it’s even easier to make an estate plan than it was back in the time of Wuthering Heights. Get started with my Estate Plan Questionnaire or contact me with questions about your individual situation.

Estate planning is not just for your grandma, rich people, or families with kids. Call it adulting or simply being prepared, creating a quality estate plan is an essential part of your financial health. Here are five valid reasons for single, twenty-somethings to make an estate plan ASAP.

  1. The future of your digital assets (e.g., bank or credit union account information, social media accounts, and more) are in limbo. So much of our lives are lived online that it’s just as important to have your online presence accounted for as your personal, physical property.
  1. Your debt still needs to be handled. Unless it’s student loans, your debt just doesn’t go away if you pass away, and someone in your family may well be responsible for paying it off.
  2. Without an estate, your assets will be liquefied to pay off debt, and then reassigned to whomever a probate court deems to be the best recipient. This also means that without an estate plan you cannot donate your assets to the charities you care most about.

4. Do you really want to leave all of the burial decisions and house cleaning to your distraught loved ones?

5. Who’s going to parent your fur baby (dog, cat, bunny, chinchilla, you name it) if something happens to you? You’ll want your pet to go to a loving home and an estate plan (with a pet trust) is a great (only?) way to set the standard for continued care and ownership.

These are just a few of the many considerations that are, yes, tough to think about, but so important.

Have questions? Need more information?

A great place to get started is with my Estate Plan Questionnaire. Also, I’m always here to offer guidance, explain important terms, and answer questions. Feel free to reach out at any time.

Businessman taking notes and planning in a meeting

Q: How many elephants will fit into a Minivan?

A: Four: Two in the front, two in the back.

Q: How many giraffes will fit into a Minivan?

A: None. It’s full of elephants.

Jokes aside, you can fit just about any asset into a trust. Here is a “short” list of assets actually placed into trusts:

  1. Airplanes
  2. Antique automobiles
  3. Antiques
  4. Artwork
  5. Assets held by C Corporation
  6. Assets held by S Corporation
  7. Autographed books
  8. Barn doors
  9. Beach house
  10. Beanie Babies
  11. Boats
  12. Bonds
  13. Books
  14. Bookstore
  15. Boxes
  16. Boxing gloves
  17. Broadway musical
  18. C Corporation stock
  19. Cheese shoppe
  20. Chocolate store specializing in “I love chocolate” t-shirts
  21. Chocolate store specializing in baking chocolate
  22. Chocolate store specializing in bars of chocolate
  23. Chocolate store specializing in candy-coated chocolate
  24. Chocolate store specializing in chocolate and almonds
  25. Chocolate store specializing in chocolate mixed with peanut butter
  26. Chocolate store specializing in couverture chocolate
  27. Chocolate store specializing in dark chocolate
  28. Chocolate store specializing in milk chocolate
  29. Chocolate store specializing in organic chocolate
  30. Chocolate store specializing in hot chocolate
  31. Chocolate store specializing in liqueurs chocolate
  32. Chocolate store specializing in semi dark chocolate
  33. Chocolate store specializing in sweet chocolate
  34. Chocolate store specializing in white chocolate
  35. Chocolate store* (You’re now probably quizzically asking, “Should I send Gordong chocolate?”)
  36. Coin collections
  37. Comic books collection
  38. Commercial and residential real estate
  39. Condominiums
  40. Credit card rebates
  41. Cupcakery
  42. Depression-era glass
  43. Dolls
  44. Enamelware
  45. Equestrian ribbons
  46. Farmland
  47. Ghosts
  48. Gold bullion
  49. Grain
  50. Guitars
  51. Hedge fund carried interest
  52. Historic papers
  53. Installment notes
  54. Intellectual property
  55. Law firm
  56. Life insurance
  57. Limited liability partnerships
  58. Livestock
  59. Marbles
  60. Mineral rights
  61. Monica (my wife)
  62. Moonstone
  63. Music store
  64. Mutual funds
  65. NHL team
  66. Oil and gas interests
  67. Olives
  68. Operating partnership units
  69. Paint-by-number landscapes
  70. Painted planks
  71. Paintings
  72. Patents
  73. Photographs
  74. Pickles
  75. Pooled income funds
  76. Racehorses
  77. Real estate
  78. Restaurant
  79. Restricted stock (144 and 145)
  80. Retained life estate
  81. Retirement benefits
  82. Royalties
  83. S Corporation stock
  84. Sculpture
  85. Sculpture garden
  86. Sea urchins
  87. Seat on New York Mercantile Stock Exchange
  88. Seats at events
  89. Snow globes
  90. Soda pop bottles
  91. Spirits of the damned
  92. Stamp Collection
  93. Stocks
  94. Tangible personal property
  95. Taxidermy
  96. Teddy bears
  97. Timber deeds
  98. Vacation home
  99. Vehicles
  100. Violin
  101. Wines

*Yes, this is a cry for help. I love sweets, especially chocolate, way too much.

Why put assets in trust?

There can be many reasons to use a trust, and specific benefits can accrue from specific trusts. In general, there are four great reasons to initiate a trust.

1. Save money

Using a trust, you avoid probate, which can save you lots of money. Probate will generally take two percent-plus of your estate, and even “just” two percent of your entire estate can add up to a lot of money. Avoiding probate also helps you avoid fees, costs, and taxes.

2. Save time

timer with sand in it

Using a trust, you avoid probate, which can save you lots of time. Going through probate, even here in Iowa, can take several months, to a year, or even more. Your heirs and beneficiaries may not receive their inheritances until the end of this probate process. Again, with trusts, you bypass probate. With trusts, your beneficiaries can get their inheritances in mere days, or weeks, rather than several months.

3. Flexibility of distributions

Don’t want your 18-year-old to inherit half-a-million dollars in one fell swoop? I agree it’s not a good idea. Trusts offer flexibility for the payout of inheritances. You set the ground rules of when and how distributions are made. For example, you might decide your children can receive distributions at certain ages. (For example, one-third at age 25, one-third at age 30, and the remaining at age 40). Or, you might decide your children can receive distributions at the attainment of certain milestones, such as marriage, the birth of a child, buying a first home, or receiving a certain degree

4. Privacy

Probate proceedings are public. Your will, once you pass and it is filed in court, is a public record. Some desire privacy about financial matters (say, about their family business) even after death.

Also, privacy can prevent hurt feelings among family members. For example, do you really want your Cousin Joe to know he received significantly less than all the other cousins?

What are the drawbacks to a trust?

It’s more expensive to set up a trust than basic estate plan documents, although I would say those costs are greatly outweighed by the money you’ll save your estate in the end. It’s also a bit of an administrative hassle, as your assets (such as car, house, stock funds, etc.) have to be retitled in the name of the trust. Again, though, I believe this inconvenience is much outweighed by the smooth operation of a trust at death.

Let’s talk about trusts!

Have an asset that didn’t make the list of 101 items? It can probably still go in a trust (even if it isn’t chocolate related!). Sometimes it’s hard to know if a trust may be right for your personal situation. It certainly doesn’t hurt to take me up on my offer for a free one-hour consultation. Give me a call at 515-371-6077 or shoot me an email at gordon@gordonfischerlawfirm.com.

Calling All Parents

In your role as a responsible parent you most definitely need an estate plan. One of the most critically important features of an estate plan is establishing guardianships for any minors (i.e., children under the age of 18) in your care. The ability to establish guardianships through your will is one of the (major) reasons I give for stating that estate planning is just as important for young people – arguably even more important – than it is for older folks.

couple with child at beach

What if a child’s caregiver is in an accident resulting in disability or even death? It’s tragic and uncomfortable to think about. If the child/children are younger than 18, the question will immediately be, “Who cares for them now?” And I say, immediately, because children can’t wait hours (let alone days, weeks, or months) for the adults around them to sort out an answer—kids need help, care, and support ASAP.

Establishing Guardianship Can Best Be Accomplished Through Will

A guardianship for a minor child can best be established through a Will. For example, your Will could state something like this:

Nomination of Guardians. If I die leaving minor children, it is my wish that such minor children be cared for by my sister, AMY SMITH, and brother-in-law, GARY SMITH, as co-guardians, both of whom may also make a determination of appropriate custody, provided both are still living and are still married to each other. If AMY SMITH or GARY SMITH do not survive me, it is my wish that my brother-in-law, DARREN JONES, and his wife, LAUREN JONES, act as guardians, and both of whom may also make a determination of appropriate custody.

Be sure to discuss your guardianship choices with your family members to be sure they’re “in-the-know” and on board with the potential responsibility of caring for your young ones.

Without Nomination of Guardians, Iowa Court Must “Guess”

Unless guardianship has been established, as in the clause directly above, an Iowa Court must choose guardians. Unfortunately, with no clear choice as to what the former caregivers would have preferred, the Court must basically make its own and best determination as to who the parents would have preferred and what would be in the best interest of the children. The Court may or may not, choose who the former caregivers would have named.

child celebrating fourth of july

Spiraling into Conflict

In an extremely stressful situation such as in the case of major disability/death of a caregiver, there may be several family members all sincere in the same strongly held belief that the children would be best taken care of by them. From there, events can quickly spiral into conflict, even a full-blown Court battle. The people who suffer most during this conflict are, of course, the minor children themselves, as they are thrown into an even worse situation.

Oral “Promises” Not Sufficient

OK, you say. But, our neighbors and us, we have a special deal. We’ve talked and agreed, if something happens to us, they’ll be the guardians. If something happens to them, we’ll be the guardians. Isn’t that good enough?

In a word, no. No way. This sort of oral agreement is not enforceable in Probate Court (or any other Court). (Here’s an example of how such agreements fail to hold up using examples from the podcast, S-Town.) The Court might consider this as one piece of evidence among the many other pieces of evidence—assuming this oral agreement can even get admitted into evidence—including in-person testimony by would-be guardians, in order to reach a guardianship decision.

Not to Decide Is to Decide

I’ve known couples haven’t been able to agree who will take care of their children in the event of them both passing. Since they can’t reach an agreement, they bypass the conversation entirely, and leave their children without a legal guardian. Which is, of course, the worst possible decision of all!

A good estate planning attorney can help with this discussion. (Let’s set a time to have this discussion.) A compromise must be reached, to ensure a good plan for the kids.

Testamentary Trust for Children

girl blowing bubbles

Further, it’s not just guardians you can plan for in your will, you can also plan material support for your children. Through a will, you can set up what is known as a testamentary trust for your children. This trust will ensure your minor children will be provided and cared for in the event you are gone.

A trustee named by you to oversee the trust can distribute funds from the estate (with oversight by the estate attorney and the Court), for the following childcare categories:

  • Health
  • Education
  • Maintenance
  • Support

Lawyers often refer to this in shorthand as “HEMS.”

Who Wants to be an 18-Year-Old Millionaire?

When you pass, even at a young age, all your assets (house, vehicles, life insurance, retirement benefit plan) could add up to quite a tidy sum. Without a testamentary trust, a child would simply inherit everything at once, when he/she reaches the age of majority (i.e., on their 18th birthday). No matter how smart and responsible an 18-year-old is, they are still only 18. Most of my clients feel strongly that inheriting that much money, that quickly, would not be good for anyone. (Case in point, this guy learned his lesson from blowing through a trust fund in just a couple years.)

boy on roof

Instead, in a quality estate plan, a testamentary trust will provide assets to the child/children as they reach different age checkpoints as chosen by the caregivers. For example, the caregivers may decide the children should receive one-third of the estate at age 21, one-third of the estate at age 30, and one-third of the estate at age 40. Or, again, whatever ages and percentages the caregivers think best and most appropriate.

Contact Me for a (Genuine and) Free Consultation

I know this can be a lot to think about. So, don’t hesitate to reach out at any time with any questions, concerns, or considerations. You can also get started on the creation of an estate plan by filling out my Estate Plan Questionnaire.

george washington figurine

Happy Presidents Day! Even if you don’t have today off of work on this federal holiday, it’s a good day to think about the first and pretty incredible leader of the United States, George Washington. First recognized by Congress in 1885, the holiday was first celebrated on Washington’s birthday, February 22. Eventually, the day shifted to the third Monday in February after the Uniform Monday Holiday Act. Instead of celebrating by chopping down a cherry tree (just kidding, that’s a myth), consider the ways Washington’s own estate planning can inspire you to get your affairs in order.

“Human happiness and moral duty are inseparably connected.”

Washington Wrote His Own Will

This is probably a terrible point to start on, as I cannot encourage you to write your own estate plan. There are so many ways that this can go wrong from lacking requisite formalities, mistaking property laws, and risking the document being found entirely invalid. All of these errors can result in a situation that causes your loved ones heartache, confusion and can maybe even lead to litigation. But, history is what it is. Washington wrote his own will and dated it July 9, 1799, not long before his death on December 14 that same year. However, considering Washington was one of the wealthiest presidents of all time, if he were living today, he would definitely want to enlist a team of professional advisors to make sure all of his assets were accounted for and passed on in a tax-strategic way.

Washington Made Two Wills

Washington was a smart man, clearly. He had, not just one, but two last will and testament documents! Of course, you don’t need and shouldn’t have two estate plans, but you should update your estate plan regularly when changes may affect your estate plan’s effectiveness or determine who you include as a beneficiary, executor, or guardian.

Washington was apparently on his deathbed when he asked his wife, Martha, to bring him both editions of his will. He had her burn one so the “real” one was competing against the other version. Again, it’s the principle that sometimes you need to make important changes to your plan that’s important here!

Washington Included His Charitable Goals

Washington left the entirety of his estate to his wife. However, he also wanted to benefit the causes he cared most about. Washington was concerned about American youth being sent to Europe for formal educations and wanted to benefit higher education institutions in the growing United States. He left 100 shares he held in a company called James River Co. to help, what ultimately became, Washington and Lee University. He also left 50 shares in a different company to endow a D.C. university (which never came to fruition).

Like Washington, you too can give to the charitable organizations and causes you care about by naming them in your estate plan as beneficiaries of certain amounts of money or of a certain percentage of your estate.

Washington Chose His Executors Wisely

Most folks I work with only choose one or two main executors of their estate plan, and then also name an alternate or two if the first choice doesn’t work out. Washington named a full seven executors to oversee that his wishes and dispersion of property was carried out. His executors included his grandson, five nephews, and his wife.

In Washington We Trust

Probate can take a long time, especially if you pass away intestate (without an estate plan). But Washington’s estate, unfortunately, took an excruciatingly long time to be completely settled. For reasons unknown, appraisal of the estate wasn’t filed with the court until 1810! And then, the estate was not fully closed until 1847. Yikes. If you would the majority or all of your estate to avoid probate, you may want to consider a trust of some sort.

Power to the People…To Make Thier Wishes Known

As Washington said, “It is better to offer no excuse than a bad one.” Drop the estate planning excuses! You don’t need presidential power to make a quality estate plan that meets your goals. One of the easiest ways to get started with my free, no-obligation Estate Plan Questionnaire.

books on a table

Hopefully, by now you have had a chance to read last month’s GoFisch Book Club pick, “Made to Stick: Why Some Ideas Survive and Others Die.” While I could complain about how the weather right now in Iowa is in a perpetual state of snow-ice-snow-wind-freezing rain, it’s actually a great excuse to curl up with cocoa and a great book. The title for this month is not a new book, but it is an enticing, mystery involving, what else, estate planning!sycamore row

Published in 2013, John Grisham’s Sycamore Row leads readers on a trip to the south in 1980’s Mississippi where a wealthy white man, Seth Hubbard, commits suicide and leaves his entire estate to his black housekeeper, Lettie Lang, instead of his two adult children, Herschel and Ramona. (I bring up the race of the characters because racism and prejudice are important themes in the novel’s setting and plot conflicts.) Sycamore Row is a sequel for fan-favorite character and fictional attorney, Jake Brigance, who was introduced to the world in Grisham’s most famous book, A Time to Kill.

Brigance is instructed by the decedent to defend his will against the inevitable controversy and litigation he anticipates will ensue. Over the course of the thriller, another will is unearthed which disposes the estate to Hubbard’s children. There are also serious questions about Hubbard’s purported testamentary capacity, as well as undue influence on the legal documents in question.

Grisham’s career as an attorney has clearly influenced his writing, and this novel offers suspense and intrigue around the topic of estate planning, while also reinforcing the importance of making a valid estate plan, keeping it updated, and discussing your decisions with your family.

What are your thoughts on Sycamore Row? I would love to hear them! Also, if the book inspires you to make certain you have a valid estate plan in place so that you can disperse your estate in accordance with your wishes, don’t hesitate to contact me! You can also get started on your estate plan with my free, no-obligation Estate Plan Questionnaire.

movie camera

I was scrolling through Netflix the other night and finally landed on The Aviator, which I haven’t seen in a while. The 2004 Scorsese film starring Leonardo DiCaprio tells the story of the eccentric aviation magnate and movie producer, Howard Hughes, who tragically battled OCD, paranoia, and chronic pain (from a near-death plane crash) and spent his later life as a hermit. That led me down a rabbit hole of internet research into the real Howard Hughes. As an estate planner, I naturally wondered what happened to his estate when he passed away in 1976. (Perhaps fittingly the aviator passed away in an airplane.)

Even if You’re Not a Billionaire, You Need an Estate Plan

Unfortunately, the tale of the Hughes estate is a cautionary one of what NOT to do.

Hughes—who was reputed to be one of the wealthiest men in the world—died intestate, meaning he died without a valid will. That can cause chaos, confusion, and cost ample time and money for regular folks. But, when your estate is worth billions like Hughes’ was, it causes a mass tangle of court proceedings. In the case of the Hughes estate, debate and disputes lasted a total of 34 years.

In the aftermath of his death, several documents were brought forth alleging to be the magnate’s will. All were deemed to be forgeries. A Nevada court determined Hughes died intestate, meaning the law determines how assets are distributed to heirs-at-law. However, Hughes died divorced (allegedly) and without any close relatives; he left no clear heir(s). This debacle of no will meant that many people came out of the woodwork claiming to be relatives.

A Messy Web of Forgeries, Fraud, & Litigation

So, after years of attorneys, courts, and dubious claims, what actually transpired?

Eventually, $2.5 billion was split between 22 of Hughes legal cousins in 1983. (Undoubtedly he didn’t know some or even the majority of these people. It’s also been said he didn’t want his money to go to his distant relatives, but without an estate plan, his wishes were steamrolled by probate law.) In an interesting twist, a woman named Terry Moore came forth claiming she married Hughes on a boat in international in 1949 and that they were never divorced. She didn’t produce any proof of the marriage (like a marriage certificate), but the estate paid her a $400,000.

The Supreme Court even had to step in. They ruled in the messy dispersion of assets that the Howard Hughes Medical Institute owned Hughes Aircraft, which it then sold off in 1985 to General Motors for more than $5 billion. The Court also rejected lawsuits brought by Texas and California, claiming they were owed inheritance taxes, but the suits were eventually put to rest with settlements of $50 million and $150 million respectively in property and/or cash.

In 2010, more than three decades after Hughes passed, the last slice of Hughes pie (Summerlin residential development community near Las Vegas) was liquidated.

Leave a Valuable Legacy

Undoubtedly, Hughes left his mark on 20th century American history. However, his legacy could have been cemented in the way he wanted (probably giving the bulk of his estate to the Howard Hughes Medical Institute and nothing to long lost cousins) if he would have had a proper estate plan created completed with valuable strategic tools like different trusts and charitable giving vehicles. While most of us will never have an estate valued even close to the likes of Hughes, we can be smart with what we do have and make certain what we choose is dispersed to whom we choose, when we choose. There’s no need for your assets to be tied up in red tape or be dispersed in a way that’s not fitting with your wishes.

Contact me with your estate planning questions, or get started with my free, no-obligation Estate Plan Questionnaire, which will help you organize important information needed for the plan in one place.

Here’s the worst-case scenario: You’ve passed away and your family falls, expectedly or unexpectedly, into a tumultuous state. They all have different opinions on how your estate plan should be interpreted, and one or more beneficiaries want to contest the distributions. While everyone knows it’s all about the money, there are easily enough legal “hooks” on which to hang a lawsuit: it can be contested that there has been undue influence, document forgery, breach of fiduciary duty, or that the deceased testator was not of sound mind.

woman and man talking about litigation

Litigation over an estate plan is terrible for everyone involved. For the sake of your family’s well-being work now to avoid this problem in the future—I really cannot express this enough.

Three Best Ways to Avoid Litigation

  1. Have a plan. Having an estate plan that is carefully planned and well thought out, created by an experienced estate planner, and completed well in advance of any death or disability is the single best way to avoid litigation.
  2. Talk about it. It’s critically important to discuss your final wishes with your loved ones and beneficiaries. Clear the air now. Don’t leave it up for future interpretation.
  3. Include a clause that discourages litigation. An experienced estate planner can include a provision in your estate plan to shut out a beneficiary if s/he brings litigation. (This is also important why you need an actual lawyer to help craft your estate plan.)

I would love to discuss your individual estate planning needs; contact me via email at gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077. Want to get started on your estate plan? My free, no-obligation estate plan questionnaire is a good place to start.

two women sitting on bench

One of the worst-case scenarios for any family is to avoid estate planning conversations completely because you risk offending a loved one.

I’ve known some couples who haven’t been able to agree on an important decision, such as who will take care of the children in the event of them both passing. Since they can’t reach an agreement they decide to bypass the conversation entirely and leave their children without a legal guardian. Which is, of course, the worst possible decision of all!

How you communicate your wishes to your family depends entirely on the family dynamic. One interesting concept I’ve heard of for family heirloom-decisions is to give your beneficiaries monopoly money and have them bid against each other for different items in an auction format. While that could make for a fun (albeit competitive) game night, it’s important that your loved one realize the importance and finality of an estate plan.

No matter how you determine decisions such as property dispersal, a professional estate planner can help you fully understand all the implications of your estate plan.

Tricky Family Situations

I’ve seen variations of this potentially tricky situation many times.

Three brothers grow up on a farm. Eventually, two of the brothers moved to the city while the third continued to run the farm’s operations. When their parents passed away, the third brother who had managed the farm, inherited the entire property while the brothers received none of the farm assets. As you can imagine, even if two of the brothers were not actively involved in the farm’s operations, if the parents died without discussing the estate arrangement with all of their children conflict could ensue between the siblings.

Then consider if the parents in this scenario divided out the farm assets between the brothers, whether or not they had a hand in helping manage the property. The brother who actually, actively manages the farm may feel slighted. Either way, such situations are made thorny when there’s no upfront, clear communication.

Bottom Line

two young people talking near beach

Estate planning can be an extremely difficult decision-making process. It is something that should be discussed with your loved ones, family members, and beneficiaries, especially when your choices may take them by surprise. Help everyone — yourself included — achieve peace of mind by seeking professional help to draft a sturdy estate plan. And then your estate planner can help you communicate your decisions to your loved ones.

Have questions? Need more information?

A great place to get started with your estate plan is with my free (no obligation) Estate Plan Questionnaire or feel free to reach out at any time.