His name was John, and John had lost his wife several years ago. John owned his home, he had a moderate amount of savings in a savings account of roughly $25,000, he owned some personal property and a car, as well as an investment account worth about $200,000, and a retirement account worth about $70,000. By all accounts, John assumed that he had a very simple estate.
John had three adult children, John Jr, Billy, and Mary. They all had families of their own and Billy and Mary lived out of state. However, John Jr still lived in the same small town that he grew up in.
John always assumed that everything he owned would pass directly to his three children in equal portions. John named his three children as beneficiaries on his investment account and on his retirement account. John also went a step further than most, he named his three children as Transfer-on-Death (TOD) beneficiaries on his bank account.
John heard about wills and powers of attorney, but given his simple situation, he did not think it was worth the cost. After all, John assumed that everything would pass to his three children, in equal portions after his death.
A few years later, John suffered a heart attack and was rushed to a local hospital. When all three children arrived, the doctor would not give them any information on their father’s condition. John never completed his healthcare power of attorney or HIPAA authorization giving his children access to his medical care information in this situation. All the children knew was that John suffered a major heart attack and was not expected to survive more than a couple of days or a week.
Unfortunately, the next day, John passed away from his heart attack.
The children went through the process together of planning John’s funeral and memorial service. The three children all agreed and planned a great memorial service. During this time, they also received the death certificate. A few weeks later they took the death certificate to the bank and divided John’s savings account equally in three portions. The children also did the same with his investment account and retirement account.
One evening, a few weeks later, the children decided that they probably needed to get together and clean out John’s old house and perhaps put it up for sale.
At this point, John Jr became very upset. John Jr claimed that he was promised the house. This was the house that John Jr grew up in and that he wanted to move his wife and children into this house because that’s what their dad wanted. Billy and Mary just wanted to sell the house and divide the sale proceeds.
This developed into another argument. Billy said he was promised John’s old World War II medals, but Mary said she was promised those by dad too. John Jr claimed that dad wanted all the family pictures to go to him and the car in the garage. Before long, this developed into a huge argument and shouting match between the three siblings who were getting along up until this point.
Before long, all three siblings had hired lawyers and John’s estate was being settled through a now, very complicated, and expensive contested probate court proceeding. Each sibling was making their arguments regarding who was entitled to what assets and what should happen to the family home.
This case would go on for over a year before it reached its conclusion.
The story I just shared with you is a very common one. No matter how well you feel your children get along, death will always bring out the worst in people. I have seen it time and time again.
Make sure you plan your estate, make sure all children know your plans, and know how your estate will be distributed including family heirlooms and the home. Sometimes, it is these arguments that can create some of the most difficult and expensive probate court cases.
If you are thinking about estate planning for the first time, or if it has been several years since you written your will and believe it is now time to engage in estate planning, contact your Nashville, Tennessee estate planning attorney, Dan Perry, for an initial planning session at (615) 472-2482.