Estate Planning Horror Stories: Don’t Let Your Tale Become One!

Would you believe me if I told you there are many estate planning horror stories out there?

October is the month when many people start looking forward to being spooked and scared out of their wits in haunted houses across the country. They also look forward to lining up for the latest Halloween horror films.

It’s fine to be scared in what is considered a safe situation. But, let me tell you, there are real life legal horror stories that everyone should do their best to avoid. Yet, more people are subjected to unimaginable horrors resulting from either not having an estate plan or mistakes made regarding an estate plan.

These are terrifying estate planning horror stories that will haunt you forever. And they can be avoided.

Estate Planning Horror Stories Focus Point 1: The Horror Of An Outdated Estate Plan

Imagine you recently remarried. Both you and your spouse have children from your previous marriages. You both divorced and now have a blended family. Then, let’s say both of you have estate plans created with your former spouses. However, you haven’t taken the time to update the plans.

Now, what if one of you dies suddenly? Can you imagine the horror if only the ex-spouses were listed as the sole beneficiaries on each of your most current estate plans? This happens more often than you might imagine. And the repercussions haunt those left behind and left out for the remainder of their lives.

There is nothing that can be done in a case like this. Although Georgia code will prevent the ex-spouse from taking under the terms of the old will, that does not mean your new family will take in similar distribution as the now ex-spouse. Instead, the nightmare of laws of intestacy may reign and/or haunting effects of an unintended remote contingent beneficiaries in the most current estate planning document will occur. Procrastinating about updating an estate plan is one of the most horrific experiences in the event of an unexpected death.

When you create an estate plan, it’s important to review it, if not annually, then at least every couple of years.

Estate Planning Horror Stories Focus Point 2: Finding Out A Fiduciary Has Breached Their Duty

When you create an estate plan you typically designate someone as an executor and a trustee. This could be the same person. Though, often they are different. Some people designate a relative or a close friend. Some designate an attorney. Regardless, anyone who accepts either position has a fiduciary responsibility to act in the best interest of the person who created the trust. Although, sometimes it doesn’t go according to the best laid plans.

People will be people. Thus, there are cases where executors and trustees do not act in the best interest of their clients. They in fact act in their own best interest. Some fail to fund the designated trust. Or they may steal money from the trust leaving little to nothing for the beneficiaries when their client passes. Furthermore, they may make self-interested investment decisions or loan trust or estate assets to themselves.

Executors and trustees are both fiduciaries who manage money or assets for others. Sometimes they are the only ones with access to funds and assets. This is why it’s imperative to select someone you are certain can be trusted.

The horrors are that your beneficiaries do not benefit.

And while legal action can be taken, there may be little in the way of restitution. A recent example which I just read about involves an accountant tasked with managing the affairs of an elderly client with dementia who embezzled $800,000 from her client. You can read all about it here: https://www.justice.gov/usao-ndga/pr/accountant-pleads-guilty-embezzling-800000-elderly-client

From Venomous Beneficiaries To Misplaced Original Documents

Unfortunately, there are an overabundance of examples of estate planning horror stories. Many involve venomous beneficiaries who didn’t get what they though they should have received. As a result, they go to extremes trying to get it all. Then, there are also people who can’t remember where they put their original documents.

I help my clients avoid estate planning horror stories to the best of my abilities. I reach out to clients every couple of years to see if they need to review and update their estate plans. If a client doesn’t have a trustworthy individual to designate as their executor or trustee, I make recommendations. Perhaps you’re ready now to establish an estate plan or review and revise an existing one. If so, give my office a call at 404-370-0696. Let’s make sure that the only thing that frightens you is a safely created Halloween haunted house, or movie, not one resulting from an avoidable estate planning horror.

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!

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