An interesting Ohio “Death” Leads Many To Thoughts About Estate Planning
A Cleveland man disappeared back in the 1980s, leaving his wife and children in a dire financial bind. In 1994, he was declared legally dead and his daughters were allowed to collect much-needed death benefits. However, nearly 30 years after leaving his family in a lurch, the man reappears, claiming his “death” is keeping him from obtaining a drivers license. The Ohio court is unable to legally reverse the declaration of death, leaving him as a very much alive dead man.
Although this story is highly unusual, issues may arise during one’s lifetime that can affect rights and expectations to inheritances. For example, if the Cleveland dad makes a lot of money before his “real” death, will his children be able to collect an inheritance from the wealth amassed after his legal death? Reality and heirs’ expectations are often not the same when a loved one passes away.
Inheritance expectations
Whether for tax planning or probate avoidance purposes, end of life plans may vastly differ from heirs’ expectations. It is not unusual for some individuals to intentionally omit certain family members from their estate plans or bequeath their hard-earned money to their favorite charities. If you wish to avoid inheritance disputes and surprises after your death, experts recommend managing expectations now, while you can still explain the rationale behind your estate planning decisions.
Many surveys reveal that one in four people expect to receive an inheritance of some amount during their lives. However, a U.S. Trust report found that a third of wealthy baby boomers – believing each generation should learn how to earn their own wealth – intend to give their estates to charities. Such people often believe they have adequately provided for their children during their lives and do not want their children to expect a life of luxury.
It is important for parents – regardless of their level of wealth – to have these often-difficult conversations with their heirs. Money is a taboo subject in many families, but is an area of greatest conflict during the probate process when people are mourning the loss of a loved one. A candid conversation can go a long way to pave the way when you are no longer around to explain your reasons for your estate plan.
Too many family wealth transfers fail due to inadequate preparation of heirs. It can be like handing the keys of a manual transmission car to a teen without showing him or her how to drive a stick shift. Family feuds can get ugly if unexplained special circumstances warrant that one child receives more than a sibling. For example, a son may not have realized that his choice of college – paid for by mom and dad – reduced the amount of his future inheritance.
A lawyer can help
If you do not have an estate plan, have not recently updated your plan, need assistance putting your desires in writing or explaining your decisions to your family, consult an experienced estate planning attorney. A lawyer knowledgeable about tax planning, probate and drafting wills and trusts can help you establish an estate plan that carries out your wishes.