Many of us worry about what will happen to our families should we unexpectedly pass away. Some of us are also worried about our loved ones paying their bills and handling the funeral and other financial obligations that we leave behind. Therefore, I want to tell you a story about Elizabeth, a client of ours that we met about six months ago.
Elizabeth, a lifelong resident of Nashville, had been thinking for quite some time about setting up her estate legal affairs. About 7 years ago, her husband of 40 years passed away. Unfortunately, Elizabeth and her husband, John, didn’t do any advanced planning. Elizabeth and John owned a home in Nashville, two bank accounts totaling $50,000.00, an IRA where Elizabeth was named as the beneficiary, an annuity with a value of $100,000.00, an investment account with $250,000.00, and a modest amount of personal property.
When John passed away, Elizabeth had to go to probate court because John died without a will. Elizabeth had to go to court, be named as the administrator, file a detailed list of all the assets and debts that are part of John’s estate, pay all the valid debts and claims that were filed against the estate, and obtain an order from the court closing the estate. In all, this process took 10 months and cost Elizabeth approximately $12,500 between the attorney’s fees, court costs, and other miscellaneous costs that she incurred.
As you can expect, Elizabeth said she never would have guessed it would have cost this much and cause her so much stress, both financial and personal, just to settle her husband’s estate.
Because Elizabeth had gone through this process when her husband died, she did not want her three children to go through the same process and the same stresses that she went through when John died. Therefore, Elizabeth decided to set up what lawyers call a Revocable Living Trust. This trust said that Elizabeth would remain in complete control of all of her assets, property, and financial accounts during her lifetime. Elizabeth was allowed to buy and sell property and spend money freely without any restriction or interruption. However, when Elizabeth passes away, all of her assets pass immediately to her three children all outside of probate.
Contrary to the 10 months it took Elizabeth to settle John’s estate, since Elizabeth has set up and planned her estate, everything will be settled in days. Elizabeth’s children will not have to go through probate, they will not have to spend thousands of dollars in costs and attorney’s fees, and they will not have their family’s personal financial matters exposed on the public court system for the entire world to see. Elizabeth now has the peace of mind that everything will be taken care of and handled smoothly for her children when she passes away.
If you have questions or concerns regarding the proper comprehensive estate plan to put in place for your family to ensure a smooth transition of your wealth to the next generation, then please contact our office for a complimentary visit so that we can discuss your estate planning needs and concerns in further detail.
We look forward to hearing from you!