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I
received a heart-wrenching phone call from a young soldier
recently. His mother had just died and he was left with the
responsibility of settling her estate. He had no idea the
difficulties he would encounter—not on the battlefield but
here in East Tennessee. The worst part is it could have been
completely avoided.
‘Brian’, an Army soldier was on his way to Haiti when he
received a phone call that his mother was in the hospital.
Her outlook wasn’t good. Forced to take emergency leave, he
rushed home. Unfortunately, he was too late. She had already
passed away.
His mother never talked with him about her plans so now he
doesn’t even know if she had a Will. In the midst of dealing
with an emotional loss and feeling the pressure to return to
his unit as soon as possible, Brian has to make her funeral
arrangements. He also has to get her estate settled.
During his search, Brian came across one of my brochures and
called me to see if his mother might have been one of my
clients. Turns out she had attended one of my estate
planning seminars where she learned about the importance of
planning ahead. She even scheduled an appointment, but
unfortunately, she didn’t keep it.
There are several challenges Brian now faces. Funeral
arrangements will be the first hurdle, but that’s just the
tip of the iceberg. At her death, all of his mother’s
financial accounts are frozen. So how is he going to pay her
bills? He can’t use any of the money in her accounts. That
means he or another family member will have to use their own
money to pay for things like utility bills, real estate
taxes, etc.
Worse yet, who’s in charge? Brian is not an only child. At
this point, no one legally has the authority to make any
decisions affecting her estate. Who’s responsible for
safeguarding her assets and securing her home?
When I spoke to Brian, he had already tried calling several
of the local banks to see if his mother had an account
there. Thinking a Will might be in a safety deposit box, he
was trying to see if she had one.
He wasn’t able to make any progress because banks, credit
unions, insurance companies and other financial institutions
are prohibited from even acknowledging the existence of an
account due to privacy laws. Even if his mother had an
account with my firm, I wouldn’t have been able to tell him.
Brian and his siblings will have to hire an attorney and go
before a court so that one of them can be appointed the
executor of her estate and receive the legal authority to
get information on her accounts, pay her bills using her
funds and begin the process of settling her estate. Of
course, all that takes time.
If a Will is never found it will be up to the courts to
decide how her estate is divided. Each state has its own
laws regarding what is referred to as intestate succession.
Her assets may end up not going to the people she wanted
them to. For instance, if she was separated from her husband
(but not divorced), he could end up getting 40% of
everything, even though she may have wanted it all to go to
her children.
Some assets may never be found. What if his mother hid money
or other valuables in a secret place in the house? In fact,
did you know that it’s estimated that 30% of U. S. Savings
Bonds are never redeemed, largely due to them never being
found?
It could be a year or longer before this estate gets
settled. Thousands of dollars will be needlessly spent. And
it could have all been easily avoided.
The moral of Brian’s story is that no matter how young you
are, you need to have your affairs in order. You need Powers
of Attorney, a Will and maybe a Living Trust. You need to
let someone know your wishes and where these documents can
be found. It’s not just the right thing to do, it’s your
duty. It’s also an act of love to your family.
Mr. Voudrie is a Certified Financial Planner, a nationally
syndicated columnist and the President of Legacy Planning
Group, Inc., a Private Wealth Management firm in Johnson
City, TN. He can be reached by calling 1-877-827-1463
toll-free, by email at
jeff@guardingyourwealth.com
or by going to
www.guardingyourwealth.com.
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