Your Spouse Dying Without an Estate Plan Can Mean Big Trouble for You

Having someone you love die suddenly can be terrible enough. But when that someone had no signed estate planning documents, the nightmare of dealing with the financial mess can go on for years.

Mark and Eileen had gotten to the point with their estate planning attorney where draft documents had been prepared. But somehow Mark and Eileen never got around to resolving the last few open questions even though their estate planning attorney kept nagging them to make these decisions.

And then Mark was killed by a totally unexpected cerebral hemorrhage. One day he was here, the next day he wasn't.

Then Eileen wondered how she was going to live. She thought things would simply come to her and go on the way they had before, with the same bank accounts, investments, and real estate. But that was not to be.

As her attorney explained, much of their property was community, which meant that it could be transferred to her without probate. Without probate, sure - but with a lot of legal papers and a court filing - a "spousal property petition" - that cost her $3,000.

However, her husband had inherited a piece of real estate from his parents. That made it separate property. Imagine how shocked Eileen was to discover that separate property does not go to the surviving spouse in California!

She and Mark had planned that this property would go to her while she was alive, and then pass to their children upon her death. But since her husband died without a will, that is "intestate," California law determined how his separate property would be divided.

Instead of the estate plan they had intended, the real estate was divided into thirds, one-third for her and one-third for each of their two children. Now her family is close, and everything will probably work out all right. But this could be a never-ending nightmare for the widow in some families.

Of course, even getting that far wasn't easy. Her lawyer had to file for probate for the separate property, which meant more forms, more legal mumbo-jumbo, more expense, and of course, more time. All in all, it took two years from the time her husband died until his estate was finally settled.

And the worst part? It cost about $17,000 in legal fees. That's right, $17,000. And most of this amount were fees based on the value of the probate estate and fixed by state law. It didn't matter how much time her lawyer spent on the case, whether there were a hundred pieces of property to deal with or just one, he got the same for the probate - $14,000. (The additional $3,000 came from the spousal property petition above.)

Not finishing their estate plan cost Eileen $17,000, took two years of her life, volumes of paperwork, and ended up with her husband's estate not being passed on the way they had intended.

The moral of this true story: put aside your objections, doubts, hesitations, and reluctance; find a good estate planning attorney; get a will and a living trust - and sign these documents; GET IT DONE!

Article Source: http://www.contentspool.com

To get a free copy of 4 Important Questions You Should Ask About a Living Trust , go to www.estateplanningforyou.com. Mitchell R. Miller has been a tax, trust and estate attorney for over 30 years. EstatePlanningforYou.com is a subsidiary of www.millermosaic.com.

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