Cancel Preloader
 A story that illustrates the importance of estate planning

A story that illustrates the importance of estate planning

I recently had a client whose aunt had just passed away. The aunt wanted to pass down her house to her niece, my client.

The niece moved into the home and thought it was a great blessing that her closest aunt had willed her a home in the Oakland hills. It was a home that she thought she’d never be able to afford on her own, since she is a teacher and the home price was way too high.

A few months after she moved in, a distant cousin took her to court, fighting her over a stake of the home, claiming that the aunt wanted the home to pass down to her, instead. How could there possibly be confusion?

You see, the aunt had a will done – but never a trust. My client and her distant (very distant!) cousin went to probate. After all the attorney fees, fighting, and bickering, the judge told both them they had to sell the home.

They did sell the home and the distant cousin got her unscrupulous profits, the courts got their fees, the attorneys got their hefty retainers, and my client was left with a nominal sum – not nearly enough to buy her own house in that same neighborhood.

All of that could have been avoided if the aunt just had a thorough estate plan!

Estate planning dictates your money, assets and health decisions if and when you’re not available.

When I say “not available” I am not just talking about death because it could be if you get sick or incapacitated, as well. If you have a stroke, dementia, etc., how are you going to make your health decisions and pay your bills?

Enter estate planning, which consists of two things: a will and a trust.
A will says how you want things to be administered when you pass away, but wills are not set in stone, so to speak. Someone can dispute a will’s directives it in court. The second instrument to use is a trust. With a trust, the deceased person’s wishes are set in stone from a legal perspective.

Every estate plan should consist of a healthcare directive. A healthcare directive is a legal document that outlines how you want things to go if you get sick, as well as who handles those decisions.

What happens if you don’t have an estate plan and you pass away or become incapacitated?

The government will take over and make all of those decisions on how your estate should be handled, which is called “probate.” Probate is a long and extremely expensive process that gets the courts, government, and attorneys rich!!! Avoid this scenario at all costs by having an estate plan with a detailed healthcare directive!

A lot of people ask if they should try to do their estate plan themselves. That depends, of course.

If you have no assets, it’s ok to do it yourself on a DIY website like legal zoom. However, if you do have any assets, it’s important to hire an attorney to help you put together your estate plan.

No matter who sets up your estate plan, make sure you have one and it’s done right, as the financial future of your spouse, children, and family depends on it!