Estate Planning Mistake #6 – The Perils of Procrastination

This continues my series of discussions about “The Most Common Estate Planning Mistakes.” Please refer to my previous blog entries for other common estate planning mistakes

In my previous blog entries, I discussed the potential risks of leaving everything to your spouse or your children in your will, and some of the risks of joint ownership for estate planning purposes, trying to save money by doing it yourself or getting creative, etc.

This blog will focus on the Perils of Procrastination!

I keep a small statue on my desk which depicts a clown riding a unicycle, trying to juggle 5 balls in the air while maintaining his balance. Does this sound like your life?

All of us have more demands on our time than the time in which to accomplish them all! It requires us to prioritize our time, focusing on what must be done, and unfortunately, some things get put on “back burner.”

I’m certainly guilty of procrastination, too!

My days are full as the owner of a law firm and an investment advisory business, marketing my book (My “Everything” File), spinning my wife around the dance floor (we enjoy ballroom dancing), pursuing my hobby of performing in Broadway musicals, plus the usual handyman projects around the house and landscaping (both of which I enjoy), spending time with family and friends, and of course, writing this blog.

In fact, if you look at the date of my last blog, it was, GULP, almost four years ago! This lapse is despite my website host’s periodic reminders that it will improve my business search rankings on Google and therefore drive more business my way, despite my wanting to share so much useful and important information to my readers, and despite actually having an hour blocked-out in my calendar every Friday to write a blog (which is when I’m finally writing this).

But when it comes to estate planning, procrastination can be a time bomb waiting to explode! And the lives of your loved ones may be severely impacted by it!

Here are just a few real-life matters that came into my office this past year:

Real Life Case Study #1:

My client originally came to see me two years ago to prepare a Will. She was a single person with no children and not on speaking terms with her siblings. She told me quite emphatically that she wanted NOTHING to go to her family; rather, she had some friends and charities whom she preferred to inherit her money! She paid for the Will and it was ready for her signature for a signing a week later.

However, she was in the entertainment business and had to delay the signing until after she returned from her performing tour a couple months later. Then, she needed to delay it a couple more months, and then again, and again. A year and a half after the initial signing date, she called me telling me she had been diagnosed with pancreatic cancer, so she’d better get it done.

This was on a Monday. We scheduled the signing for that Wednesday, just two days later. But sadly, she died on Tuesday!

Therefore, under Florida law, since she died intestate (without a Will), the Florida rules of intestacy applied, which resulted in her family inheriting everything, and the friends and charities received nothing. This is the exact opposite of the result she wanted.

Real Life Case Study #2:

My client was the second wife whose husband had passed away. She retained me to handle the probate estate. One of his assets was a $250,000 life insurance policy she had hoped she would inherit. He had the “Change of Beneficiary” form sitting on his desk for a year, but he had never gotten around to signing and mailing it to the insurance company.

Normally, under Florida law, this would not be a problem, as the law would treat the divorced first wife as having predeceased him, and the second wife would have received the proceeds under the terms of his Will. Unfortunately, he had named his sister as a contingent beneficiary, so she wound-up getting the insurance money, not the second wife.

Real Life Case Study #3:

My client was on her deathbed and was told she had a few weeks to live. She had a Will and had named her children as beneficiaries on all her accounts, leaving only a valuable piece of real estate, which would need to go through probate to get to her heirs. The probate process would take 6 to 12 months and cost her loved ones over $5,000.00 to complete. So, she wanted to avoid probate to save her children the expense and hassle.

She could prepare a Trust and convey the property into the Trust, thereby avoiding probate. Or she could prepare a “Lady Bird” Deed (Actually called an “Enhanced Life Estate Deed”) which do the same, but at a lower cost than a Trust.

Her daughter called me on a Saturday evening that her mother was going downhill much faster than expected, so I rushed to my office and worked until midnight preparing the necessary documents, planning an emergency signing for Sunday morning!

She died Saturday night. So, the property had to go through probate.

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So, do you really need a Will, Trust, Power of Attorney, Health Care Surrogate, Living Will, and the other forms of estate planning? Absolutely! But, do you really need to do it now? Continue reading and decide for yourself.

Without a Will, the state “writes” a will for you in its intestacy statute, which directs who will inherit your assets if you die without a Will. You may not like who inherits your estate under the statute. So, be sure to check with your attorney; you may be unpleasantly surprised.

By the way, a Will does not avoid probate. The only way to avoid probate is by naming a designated beneficiary, owning the property with someone as joint tenants with right of survivorship (JTWROS), owning your assets in a Trust, or through the Lady Bird Deed described above (for real estate).

Without a Power of Attorney, nobody has the legal authority to sign your name to important documents, pay your bills, manage your investments or business, etc. A court-appointed guardian may be required for someone to have legal authority to do so, an expensive legal proceeding.

Without a designated Health Care Surrogate, nobody has the legal authority to make health care decisions for you, if you are unable to do so. As above, a court-appointed guardian may be required.

Without a Living Will (the Terri Schiavo document), if you are brain dead and attached to a machine artificially keeping you “alive,” nobody has the legal authority to “pull the plug.”

Estate planning not only involves creating the documents needed to protect you and your loved ones, it also involves making sure all your beneficiary designations (and contingent beneficiary designations) are current and correct.

It also involves letting your loved ones know WHERE everything is located and everything else they need to know about you: Your original documents, your assets, your debts, etc. More on this in a future blog, but if you’re impatient, feel free to check out my book on the subject, appropriately named My “Everything” File®, at www.MyEverythingFile.com. It is is available for purchase there as well as on Amazon.com.

Estate planning also involves a review of your current insurance protection: Life insurance, Long-Term Care insurance, business continuation insurance, etc.

Finally, as a courtesy to my clients, as part of the estate plan I prepare for them, I provide an “Emergency Checklist” of what your loved ones need to know to do immediately if something happens to you! If you’d like a copy of it, send a quick email to me at www.JSlutzky@SlutzkyLawFirm.com or www.JerrysluLaw@gmail.com with “Emergency Checklist” in the subject column, and I’ll email it to you.

Summary

Please don’t procrastinate on creating or updating your estate plan and beneficiary designations. If you are thinking, “Yes, I really must get around to doing this.” But to paraphrase the famous Clint Eastwood line in his “Dirty Harry” movies, which applies to procrastination: “Do you feel lucky? Well, do ya?”

Remember, none of us get out alive! It’s not an “if” question; it’s a “when” question!

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As I emphasize in most of my blog postings, forms of ownership, beneficiary designations, and other estate-planning considerations have many potential land mines that can negatively impact what you are trying to accomplish. Your attorney will discuss many “what-if” scenarios with you to make sure you fully understand what could potentially go wrong with your plan, and how to protect your loved ones from what might go wrong.

I will discuss additional common estate planning mistakes, and several methods of avoiding probate in future blogs.

Previous blogs regarding estate planning mistakes:

Mistake Number 1 – Dying Intestate.

Mistake Number 2 – Having an “I Love You, Honey” Will

Mistake Number 3 – Leaving Property Outright to your Children

Mistake Number 4 – Owning Property Jointly

Mistake Number 5 – “Save-a-Buck” Estate Planni

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Jerrold E. Slutzky, J.D., CFP^® is a Florida-licensed attorney at law with offices in Safety Harbor, Florida and Land O’ Lakes, Florida, serving Pasco, Pinellas, and Hillsborough Counties. His practice focuses primarily on Estate Planning Services (wills, trusts, powers of attorney, health care directives, living wills, asset protection, etc.), Probate, and Business Law Services to small business owners (buy/sell agreements, start-ups, choice & formation of business entity, business succession planning, drafting/negotiating/review of documents, confidentiality agreements, corporations, LLCs, partnerships, etc.) and General Legal Counsel & Advice.

The Slutzky Law Firm has two office locations:

853 Main Street, Suite A, Safety Harbor, Florida 34695 (Pinellas County) Phone: (727) 475-6200; and

20719 Sterlington Drive, Suite 103, Land O’ Lakes, FL 34638 (Pasco County) Phone: (813) 909-1515.

Email: www.JerrysluLaw@gmail.com (best) or JSlutzky@SlutzkyLawFirm.com

Website is www.SlutzkyLawFirm.com

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My Everything File website: www.MyEverythingFile.com

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