Law Blog

If you could make sure that all your money, property, and other important belongings were given to exactly the right people, wouldn’t you do it?  The question seems like a no-brainer but the reality is that the majority of Americans do not do this!

A 2008 study found that 58% of Americans do not have a will.  I find this number to be shocking.  I know that death and dying is an unwelcome topic, however dying without a will is a really bad idea.  This holds true whether you are worth millions or a lot less.  Wills, trusts, and other estate planning tools give you the power to decide how to distribute your estate.

When an individual dies without a will (or when they have an incomplete will), their estate goes through intestacy, which basically means the state decides how your estate will be distributed.  This is especially risky if you have step or adopted children as some state’s do not allow an adopted or stepchild to inherit in intestacy, or those non-biological children inherit less.

A recent article I read outlines the top 9 excuses for people gave for not making any type of estate plan:

(1)I don’t see a need for an estate plan

(2)I don’t plan on dying

(3)I don’t plan on dying – at least not soon

(4)I don’t want to pay for it

(5)I don’t want to spend the time

(6)I don’t want to talk about my family

(7)I don’t want to talk about my money

(8)I don’t want to ruin my kids

(9)I don’t trust my kids

As you can see, some of these excuses are just avoiding the inevitable.  One of the beauties of estate planning is that you have the ability to change the majority of your plan as situations change.  Without an estate plan, you are putting your finances and property at the mercy of a judge who has no idea what you and your family are like.

A recent LegalMatch study found that the majority of people interested in preparing for their future were more interested in overall estate planning than drafting a single will or trust.  These findings make sense in that those individuals that are thinking about wills and estate planning are really trying to maximize the benefits and thus are creating more complicated schemes than just a will or trust; and those individuals who are not are in the majority and doing nothing to plan.   In addition to the ability to specifically provide for your family and loved ones, there are tremendous tax benefits to creating a will and/or trust.

It is not necessarily that I think everyone needs to embrace their own death.  Rather, I am advocating for embracing the lives you will leave on your death.  Estate planning is such a powerful tool and for all the time that people spend worrying about money and their families in their lives they should take a little time and worry about them after they die too.

Preparing and contemplating ones own death is not a welcome thought or process.  However, what was previously a practice that simply involved drafting a will has morphed into a much more complicated process that not only plans for death but also for life.

Estate planning today rarely involves the composition of just a will but also creates trusts, guardians, powers of attorney, gifts, funeral arrangements, organ donations, and other estate planning techniques. Modern-day estate planning is not the dreaded process that it has been branded over the years mainly because it is no longer just about bequeathing property and assets to loved ones and can carry many benefits that an individual can enjoy while sill alive.

A recent LegalMatch study revealed a range of questions regarding estate planning, and how the high level of overall inquiries in this intricate legal field seems to be on the rise.  Part of this rise in interest can be attributed to the range of fields that estate planning incorporates- general estate planning, tax law, family law, complicated health care directives, and many others depending on individual circumstances.

I agree with a recent article published that catalogued some of the major trends in estate planning:

1.) Fewer estates will be taxable

2.) Careful planning to avoid probate court during incapacity is on the rise.

3.) There is an increasing concern over the wrong people gaining control over an individual’s assets.

4.) The arrangements or terms controlling the distribution of an inheritance are becoming increasingly detailed

5.) The amount gifted to charity is increasing steadily

6.) Having long-term health insurance is becoming more common

7.) Using a specialist in the estate planning process is on the rise

As the trends reveal, people are becoming increasingly aware of the need to plan for any and all possible future events. There are a tremendous amount of benefits from consulting an estate planning lawyer to planning for an individual’s specific needs and also to take advantage of the tax benefits associated with the creation of trusts and other planning tools.

According to the U.S. Census Bureau, by 2030, about 20% of the U.S. population will be age 65 or older and by 2050, this aging segment of the U.S. will represent 88.5 Million people versus the 38.7 Million in 2008. (See U.S. Census Bureau) The increasing age of the Baby Boomer population comes with a significant transfer of wealth either through wills, trusts or through state mandated intestacy laws.  And, it raises an issue concerning how prepared Americans are in developing their estate plans, whether their estate is valued in the millions or in the thousands.

Contributing to this significant transfer of assets is an increase in the number of will contests being brought today, particularly as it relates to step-families.  Children of these families are rapidly learning that the second (or third) spouse often has significant if not greater rights than the children; intestacy shares can range from 1/3^rd to as much as ½ of the decedent’s estate when there is no will.  (Before Your Parent’s Say ‘I Do’ Again)

Even when there is a will, sometimes a new spouse will change not only the family dynamics but also the dynamics of the will or family trust.  Most Americans are familiar with Anna Nicole Smith’s short-lived marriage and protracted court battles that continue even after her death. (Daughter to Inherit Mother’s Estate ).  Anna’s litigation, however, is not atypical although most people’s estate assets are significantly less than the Marshall fortune.

In fact, some children are proactively approaching their parents about their estate plans before their parents die.  SmartMoney.com profiles Neil Finkel whose 80+ year-old father placed a large percent of his multi-million dollar estate into a trust for his son.  However, Finkel’s Dad married a woman 30 years his junior. Amy, the new spouse, and Neil subsequently waged a 2-year court battle over the father’s dwindling assets which were being eroded by the spending habits of the new wife.  Although the case was settled, it’s unlikely that the rift in the family will be healed and it could erupt again after Dad Finkel’s death.  (Before Your Parent’s Say ‘I Do’ Again)

During the past five years, tens of thousands of people have used LegalMatch to find an attorney to represent them in filing a lawsuit to contest a will or to defend the estate against a will contest.  Not surprisingly, many of the most popular states for will contests have a high concentration of residents age 65+.  Plus, this top 10 state list comprises over 55% of LegalMatch’s will contest customers: 

Your will or trust will have lasting implications on your heirs after your death, particularly in those families where there are step-children or multiple spouses.  Probate litigation is generally protracted and can tear families asunder.  Developing a proactive estate plan, even if your estate assets are small, should help to reduce family tension after your death.  However your estate plan is crafted, you will be communicating a strong message to your family. The properly drafted will can stand the tests of probate court and ensure that your intent is followed after death.

The Illinois case, In re Estate of Max Feinberg has drawn national attention and raises thorny issues, including how individual freedoms should be interpreted in a post-civil rights world. 

In Feinberg, the Illinois Supreme Court invalidated a trust provision that attempted to disinherit certain beneficiaries if they married persons who were not Jewish.  The court found that the clause violated public policy as discouraging marriage.  Most states hold that provisions discouraging marriage or encouraging divorce violate public policy; however, there’s no consensus on faith-based restrictive clauses.  For example, in Shapira v. Union National Bank, an Ohio court upheld a provision requiring the decedent’s son to marry a Jewish woman within seven years of the testator’s death in order to collect his inheritance. 

According to Restatement Third of Trusts, the Feinberg provision is clearly invalid.  The Restatement specifies that a provision eliminating a beneficiary’s rights to a trust if he marries someone outside a designated religion is void as a violation of public policy.  The Restatement clarifies: trust provisions are generally invalid if they “encourage disruption of a family relationship . . . discourage formation or resumption of such a relationship . . . [or] seriously interfere with or inhibit” the beneficiary’s freedom to divorce or marry “by limiting the beneficiary’s selection of a spouse.”  Given how the provision in question has caused major turmoil within the Feinberg family, it would be invalid under the Restatement.

If Feinberg goes all the way to the U.S. Supreme Court, I hope the Justices will give strong consideration to the fact that the clause does not put the grandchildren’s fundamental right to marry at stake; instead, it merely threatens their inheritance.  Furthermore, a testators’ freedom to dispose of their personal property as they wish has long been respected.  Do we really want to whittle away at this freedom?