Few people really want to do estate planning. Many people occasionally give it a little thought but ultimately put it off until a later date. While some do finally get to it, many do not. If you do not do estate planning, how is your estate managed and distributed?
Missouri, like other states, has adopted statutes that determine the beneficiaries of people who have failed to properly prepare estate planning documents directing the distribution of their estate. In general, Missouri’s statutes:
· Require that the estate be administered by the probate court;
· Allow the surviving spouse or minor children to claim some exempt property;
· Allow the surviving spouse or the minor children to claim a support allowance for one year’s support;
· Allow the surviving spouse or the minor children to claims a homestead exemption (not exceeding $15,000.00); and
· Divide the remaining estate assets among the surviving spouse and the decedent’s children (minor or adult), and if there is no surviving spouse or children, then divide the assets among other heirs of the decedent.
Although there may be a few people who would be content with the above allowances and intestate distribution plan, the vast majority would not be satisfied if they fully consider them. Reasons why they would not be satisfied include that the statutory plan creates:
· A risk that minor children will inherit their assets and require probate court administered conservatorships that will terminate when the children attain the age of 18, at which time the children will have full control of the assets.
· A risk that a surviving spouse will be required to sell the home because children of the decedent, who are not children of the surviving spouse, insist upon receiving their share immediately.
· A risk that funds needed for the reasonable support of the surviving spouse will be distributed to children and unavailable to the surviving spouse.
· A risk that substantial assets of the deceased spouse will not be at any time distributed to his or her children and will instead later be distributed to the children of the surviving spouse.
· A risk that a spouse or child with special needs will not get enough of the assets to accommodate those needs.
· A risk that “beneficiaries” named on accounts of the spouses will be changed by the surviving spouse in a manner that would not been approved by the decedent spouse.
· There are many other risks in addition to the above.
Some people will say that their family will adjust to address the circumstances. Others have likely assumed the same. A couple example cases reflecting some of these issues follow:
1. A man was married and he and his first wife had 5 children. They divorced. He married a woman with no children. At the time he had a very good job, home, motor vehicle, bank accounts and investment accounts, and had vested in a very good retirement plan. His new wife was unemployed and did not work outside the home. He transferred all of his assets into the joint names of he and his second wife. He and his second wife had no children together. They lived long and good lives together. His 5 children maintained a very good and strong relationship with each of them. They told his children that they had prepared a Will providing first for the surviving spouse, and that the remainder would be distributed to his children. He died. His children assisted his wife in selling their vacation home and helped her while she lived the rest of her life in their Missouri home, just as they had helped both of them earlier. After her husband’s death, she again told the children that she was making sure that they would inherit all of her property upon her death. Following her death, however, no Wills were found in her home, her safety deposit box, or filed with the probate clerk. They found nothing indicating that she had seen an attorney. Under Missouri’s Intestate Succession Statute, step mom’s estate was required to be distributed to her surviving siblings, and her nephews and nieces of predeceased siblings, nearly all of whom she had had very little contact with for many years. The Intestate statute does not include step-children in its distribution plan.
2. A divorced man with 2 minor children marries a woman with no children. He has a home and very good business and she has very good employment as well. They have 2 children together. He dies unexpectedly while all 4 of the children are minors. Under the Missouri Intestate Succession Statute, his surviving spouse gets some of the allowances and 50% of the remainder of his estate, and his 4 children get 12.5% each. His first ex-wife has no interest in his second spouse and her 2 minor children, complains of every allowance, insists upon the sale of all of the assets of the estate, and has no interest in the effect upon the surviving spouse or the 2 youngest children. Conservatorships had to be created for the minor children’s respective shares, which will be distributed to them when they attain 18.
Certainly the results of the two above cases were avoidable. Estate planning offers you the opportunity to avoid these risks and circumstances. At the Thurman Law Firm we have attorneys with many years of experience doing estate planning and who are familiar with various estate planning options. We will meet with you to discuss your circumstances, and to assist you in selecting an estate planning option that suits your needs, goals and budget.