This is a true tale of two women, Joan and Mary, whose 80-something mothers died within weeks of each other. They both knew the importance of having their parents do some estate planning, but only one succeeded in getting it done. What a difference it made.
Joan was a very organized person and made sure that she and her husband went to an attorney to have wills and trusts prepared. She encouraged her parents to do the same, but she could never get them to make an appointment with the attorney. When her father died in 1999, they found an old “I love you” will that left everything to his wife. Fortunately, they had a very traditional marriage and owned all of their assets in joint names. When he passed away, Joan’s mother continued on as before, making basically no changes after his death and leaving everything in joint names.
Joan talked to her mother again about setting up a living trust, so that her assets could be managed easily in the event that she became unable to manage them herself, and also to streamline, or eliminate, the probate process at her death. Her mother agreed that she needed to do some estate planning, but she kept putting it off. Then her mother unexpectedly contracted pneumonia, and within days she died. Not only was the estate planning not done, but she had never updated her original old will, which named her late husband as executor.
One problem after another
Joan’s siblings asked her to take charge of filing her mother’s will. The first thing she did was look for the original will, but it was not to be found in her papers at home. Joan suspected that it was in the safe deposit box that her parents shared at the local bank. When she went to the bank, they told her that they needed proof that she had qualified as executor or administrator of her mother’s estate before they could give her access to the box.
Joan’s next stop was the county courthouse. She set up a meeting with the probate officer in the clerk’s office, but they could do nothing for her without the original will. So she had a dilemma on her hands. She couldn’t qualify as administrator without the will, and she couldn’t get to the will without qualifying.
Fortunately for Joan, her mother lived in a small town, and the probate clerk agreed to accompany her to the bank. With both of them present, the bank employee gave them access to the safe deposit box so they could get the will. Then Joan had to go through the process of qualifying as the administrator of her mother’s estate.
Unfortunately, this was just the beginning of Joan’s problems. Her mother had become increasingly vague over the last few years of her life, and her financial matters had gotten out of control. Her papers were in total disarray, with unpaid bills and unopened mail stacked on the dining room table. Joan spent hours sorting through the piles to see if she could figure out what bank accounts, certificates of deposit, and other investments she might have owned. What she did find still reflected both her father and mother as joint owners, as her mother had never made any changes after his death.
Joan is still working on identifying the assets and transferring them into the estate bank account. Her plan is to wait for a period of a year to see what other paperwork might show up to reveal other bank accounts, stocks and insurance policies.
Mary, on the other hand, approached her parents in 1990 and suggested that they do some estate planning. Mary’s father heeded her advice and they went to see an estate planning attorney. They each set up a living trust, naming themselves as trustees of both trusts, with Mary as the successor trustee. Then they titled their savings and investment accounts with the names of their trusts.
Fortunately, before her father died in 2004, he and her mother discussed what would be the best course of action for her mother after his death. Since they had friends living in a continuing care facility, Mary’s mother said she would like to move into an apartment in the independent living section. They told Mary about their plan and it was decided that the initial buy-in cost could be paid with proceeds from the sale of their house, and the on-going costs could be paid with her social security income, along with a monthly distribution from her portfolio.
The advantage of planning
After her father’s death, Mary and her mother put the pre-arranged plan into place. Her mother felt very comfortable selling the house and moving to the continuing care facility because she knew it was what her husband of 62 years wanted her to do.
With respect to the financial aspects of their situation, Mary was able to step into her father’s shoes and take over management of both trusts. She was able to take over paying the bills, as her mother was unable to manage any of her financial affairs. They did not have to file the will at the courthouse, as everything had been placed in the living trust, so it was a seamless transition.
Mary’s mother’s estate
When Mary’s mother passed away, Mary paid her final expenses and was very quickly able to distribute the assets in her trust to her siblings and herself. Again, there was no need to go to the courthouse to file the will, as all of the assets were titled to the trust. Since her mother had lived in the continuing care facility for over 5 years, there was no interest to sell or liquidate.
Joan and Mary
Several months after their mothers died, Joan and Mary found the time to have lunch together to celebrate the lives of two wonderful women. Over lunch, Joan was lamenting about the difficulties she was having trying to figure out how to close out her mother’s estate. Her siblings were anxious to have their share of the estate distributed to them, but Joan was afraid to do anything until she was sure that she had found all of the assets and identified any liabilities that might be outstanding.
Mary just shook her head and chided Joan for letting her parents’ situation get so out of hand. She had already distributed the money in her mother’s estate and closed out the trust.