Thursday, January 21, 2010

The Importance of Leaving a Will

Here is a great reminder of how important it is for everyone to make out a will, based on an actual case I've seen recently. A brother and sister came to see me today about their father's estate. The conversation went something like this--dad didn't leave a will, but always said that he wanted his property to go to us. They went on to explain to me that dad also had another child--who is disabled and on Medicaid and SSI. I had the job of explaining to them that, regrettably, the disabled daughter is also an heir of the estate under Indiana law and, what's worse, her inheriting the property could jeopardize her benefits. Also, because dad named his son as joint owner of a large bank account (with the intention that the son split it with one of the sisters) the son could be subject to Indiana inheritance tax, a problem that could have been avoided if dad had simply named both children as TOD beneficiaries.

Obviously, none of this was dad's intention. There may be solutions to some of these problems, but getting there is going to be much more expensive and complicated than if dad had simply sat down with an attorney and had his will drawn up. The amount of money his kids are going to spend now on legal fees will probably be 10 times more expensive (at least) than the cost of a simple will!

The bottom line is this: the law will not honor your wishes regarding the disposition of your estate unless you make out a will or have appropriate beneficiary designations for your assets.

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