Welcome to the 20th (and final) blog in our series of Probate Horror Stories, courtesy of Brown & Crona, LLC. The fact that we have been able to share this many different types of probate horror stories should drive home the importance of creating a comprehensive estate plan that will do the very best to protect your assets and your family.
If you have missed any (or all) of our previous probate horror blogs over the past 19 months, here is a short recap of the fictional situations (based on real life issues) we have covered in our series:
Week 1: Estranged Parents. A person passes away without a will, so the estate goes to the closest surviving family members: his estranged parents. All of his possessions would go to the two people he had not had contact with for years – the two people he would not want to receive his estate.
Week 2: Life Partners Left in the Lurch. A person cohabitating with a life partner passes away without a will. Because they are not legally married, the courts will divide the estate among the closest surviving family members – even if the family is not close. The life partner could receive nothing.
Week 3: No Updating of Will. A person creates a will but does not update it to reflect a divorce and remarriage. After the person passes away, the estate new spouse would have to file various spousal elections in Court in order to receive something from the Estate. These elections are complicated and time consuming.
Week 4: Appointing a Bad Executor. Choosing the wrong person to handle wrapping up financial affairs and distributing property after death as instructed in a legal document could lead to strained family relationships. It could also result in the estate falling into the wrong hands or being drained of value due to legal fees and taxes.
Week 5: The Invalid Will. Making changes to a will without following the proper protocol can lead to the will being deemed as invalid. This includes failure to have the changes witnessed and making handwritten edits. If there is no valid will, the estate will be distributed pursuant to the laws of intestacy.
Week 6: The Secret Beneficiary. Family relationships will most certainly become strained if there is a beneficiary named in a will who is not known by the family. This could result in some family members being left out of a will and receiving nothing from the estate.
Week 7: Family Infighting. Leaving unequal amounts of an estate to family members can lead to infighting over the inheritance. This can trap the estate in probate for months or even years, ultimately lowering the value of the estate due to attorneys’ fees.
Week 8: Joint Wills for Married Couples. When one of a married couple passes away, the joint will becomes an irrevocable document that cannot be changed by the surviving spouse. This can affect the person’s ability to sell assets, change beneficiaries, limiting inheritance, causing problems with leaving the estate to a new spouse, etc.
Week 9: The Handwritten Will. If a handwritten will is hidden and never found, the courts will decide how assets are distributed pursuant to the laws of intestacy. Even if the handwritten will is located, if it is not properly written (signed, witnessed, spelled correctly, ambiguous language, etc.), the courts could deem it invalid.
Week 10: The Forgotten Child. If a child is unintentionally left out of a will, the courts will make some concessions to ensure the child is not completely left out. However, that child may not inherit the amount of the estate that the deceased person wanted the child to have.
Week 11: Unworthy Beneficiaries. When certain beneficiaries in a will decide to take a bad path in life, they may quickly squander their inheritance. If the will is not updated to disinherit those individuals – or make stipulations on how/when it is received – a portion of the estate may be wasted on an unworthy beneficiary.
Week 12: IRA Beneficiaries. If the estate is listed as the beneficiary of an IRA, creditors can come after any outstanding debts owed by the deceased and the IRA savings can be depleted. The surviving family may be left with little to nothing out of the IRA account.
Week 13: The Only Child Pitfall. When both parents and the only child pass away at the same time and no will has been created, that estate will be divided among the closest living relatives. If no relatives can be found, the estate will be escheated to the state. Most of the estate could be liquidated and placed into government funds.
Week 14: Multiple Marriages. If a person marries and remarries multiple times and the will is not updated, infighting and lengthy/expensive probate processes could ensue, ultimately chipping away at the value of the estate.
Week 15: Blended Families. Stepchildren can be disinherited if there is a blended family in which a spouse passes away without a will (but the assets of the married couple have been comingled) and the new spouse inherits the estate. The new spouse could disinherit the children from the previous marriage, leaving those children with nothing.
Week 16: Feuds with Stepmothers. Stepmothers that inherit the husband’s estate can choose to keep the stepchildren from receiving any of the estate, including life insurance policies of which she is the beneficiary. The estate could be handed down to the stepmother’s own children.
Week 17: Greedy In-Laws. If an estate is to be divided equally among surviving children, but one of the children has had a larger role in caring for the parent, the daughter-in-law or son-in-law may contest the will and demand that they receive a larger portion of the estate.
Week 18: Runaway Executor. If an executor is secretly named in a will, that person may decline the responsibility. In that case, the courts step in and appoint an executor – and the logical choice may be the absolute wrong choice for the family dynamic. Infighting, will contests and lengthy probate can ensue.
Week 19: Forgotten Valuables. If an executor finds a great deal of valuables that are not included in a will, those assets will have to be included in the value of the estate, potentially leading to a significant tax burden on the beneficiaries. This may cause the family to have to liquidate the valuables (for less than top dollar) in order to pay the estate taxes.
As you can see, there are many different types of situations that can lead to probate horrors. The Denver will lawyers at Brown & Crona, LLC can help you not only draft a will or trust in Colorado, but also think through potentially sticky situations and remind you to update your document regularly. Call (303) 339-3750 or send us a message online to get assistance with creating a will in Colorado.