As an estate planner, I have many cautionary tales illustrating the unintended and sometimes heartbreaking consequences of not planning ahead. But until now, never have two cases unfolded in perfect synchronicity to highlight the stark difference between planning ahead and not planning at all.
Two sisters from two unrelated families, yet strikingly similar in circumstance. Each sister was unmarried, had no children, suffered from long-term health conditions, and wanted her respective sibling(s) to inherit her estate at death. Both women died in 2020 after a brief and sudden illness.
One sister – let’s call her “Tessa” – had a complete estate plan with a revocable living trust in place. The plan enabled Tessa’s siblings to step in seamlessly as the successor trustee, efficiently wrap up her financial affairs, and divvy up the remaining assets among the people that Tessa wanted to benefit the most from her estate: her beloved sisters. From beginning to end, the administration of Tessa’s trust took less than eight months – and it would likely have concluded sooner but for delays caused by COVID-19.
As you may guess, the other sister – let’s call her “Poppy” – did not have an estate plan. Her passing required a formal probate administration through the courts because the value of her countable assets exceeded the minimum threshold of $166,250. Theoretically, a probate administration could wrap up in about the same time period as a trust administration, but the reality exacerbated by COVID-19 is this: we just marked the one-year anniversary of Poppy’s passing with at least several more months to go before the probate proceeding can (hopefully) be closed. Of course, the expense of Poppy’s probate administration far exceeds that of Tessa’s trust administration.
For me, the hardest part of Poppy’s probate administration is knowing that her final wishes will not be carried out. I mentioned earlier that both women wanted their respective sibling(s) to inherit her estate at death. However, because Poppy did not set out her wishes in writing before her death, the default distribution rule under California law will apply and distribute much of her estate to heirs whom she did not intend to benefit. How am I so sure of this? Poppy clearly expressed her wishes to me for purposes of creating her estate plan – the one she just couldn’t get around to finishing prior to her passing.
“If only…” are words that I hear from clients more often than I would like in my practice. I much prefer to hear “Thank goodness [mom/dad/sibling/friend] had an estate plan in place!” Plan ahead, not only for yourself, but for your loved ones, to ensure that your wishes can be carried out during your lifetime and after death.
If you have any questions about estate planning, please call the experts at Young, Cohen & Durrett LLP at (916) 569-1700.
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