Where
There's A Will, There's A Way To Keep Peace
Pamela Dittmer McKuen
When Marilyn Hagler married for the second time
in 2000, she and her husband pooled their assets.
They built their dream house and created an estate
plan that provides for each other and their children
by previous marriages when one of them dies.
"You
never know what is going to happen," said Hagler,
56, an Oswego resident. "Part of our responsibility
is to make sure everything is in order as well as
it can be."
Hagler's
foresight puts her in the minority. According to
Nolo.com, an online law information center, 70 percent
of Americans do not have wills. If you die without
one, the state where you live has written one for
you.
Attorney
Jack O'Drobinak of Crown Point, Ind., and a former
Lake County, Ind., probate commissioner, recalls
a case in which a husband and wife with no children
decided not to make an estate plan until one of
them died. The survivor would divide the assets
between their respective families. One night they
were driving home when a truck hit their car. The
husband died first and the wife died a half hour
later. Without a plan, all assets went to the wife
and then to her family.
"The
couple never intended for that to happen, but I
had to follow the law," O'Drobinak said.
Illinois
law splits an estate 50-50 between the spouse and
children.
Some
people erroneously believe they don't have enough
assets to bother with a will or estate plan, said
Hagler's financial planner, Diane Maloney of Beacon
Financial Planning Servi-ces Ltd. in Plainfield.
"The
issue of planning for when you pass on is not because
you think you have so much but to designate what
you want to do with those things and consideration
for those you leave behind," Maloney said.
Consider
the advice of professionals who have witnessed smooth
transitions and refereed some bad ones:
Many
parents believe if they divide the estate equally,
the children will be happy. Not necessarily true,
said attorney Les Kotzer of Thornhill, Ontario,
author of "The Family Fight: Planning to Avoid
It" (Continental Atlantic Publications, $19.95)
"When
a caregiving child gets exactly the same amount
as the one who only came in at Christmas and who
didn't take Mom to doctor's appointments or put
her on the toilet, the child feels used," he
said. "This translates to real bitterness after
Mom dies."
Similar
hostilities may arise when one child receives an
expensive education, has children with costly medical
or mental disabilities, or is more successful than
the siblings.
"If
one child is successful and another is not and you
go according to need, the child who did well arguably
needs less than the child who didn't do well,"
said Dean Hedeker, an attorney and certified public
accountant in Deerfield. "That's a struggle
because parents are penalizing a child who did well
if they give him less."
One
way to level the economic playing field is to give
the caregiver or other exceptional child a gift
of money or property during the parent's lifetime
and then give all children equal shares of the estate
after the parent's death.
Baby
Boomers who have children from multiple marriages
may find that divvying up the pie is difficult,
especially when assets are scarce. Life-insurance
policies can be used to provide for first families
while creating new assets with the present family,
Maloney said.
One
enraged woman smashed a crystal vase, one she had
given her mother, in Kotzer's office rather than
have it sold with other personal effects as decreed
by the will.
"I
have seen horrific fights between children because
the parents have not planned for their personal
items," he said.
Give
away personal treasures while you are still living
or mark them with the name of the intended recipient.
Be very specific with your descriptions, Kotzer
advised.
"`Antique'
is a common term, but not in terms of a will,"
he said. "To a daughter, a 1960s clock may
be an antique. To the son, it's not an antique because
he's not getting any antiques. Or if you say, `I
leave my diamond ring,' please specify whether it's
the $10,000 one or the $500 one."
"I've
seen [clauses] in wills where the deceased stated
that if anybody contests it, they will automatically
be disinherited," Maloney said.
Choose
an executor or trustee whom you trust to carry out
your wishes and who accepts the responsibility for
doing so.
One
husband and wife named co-executors--one of her
adult children from a previous marriage and one
of his. In addition, they chose the children they
believe are the most business-minded.
"Parents
assume good will among their children," Kotzer
said. "I've seen a parent put in a will, `I'll
leave it all to Billy, and Billy will look after
his brother.' Maybe he doesn't want to give it to
the other son because creditors might take it. So
Billy gets it. He had no obligation to dole it out."
Another
scenario is when Dad puts certain assets in joint
tenancy with Billy, believing that any unused portions
will be divided among siblings. Billy keeps it for
himself.
Even
if Billy is willing to share, he may have tax consequences
when he transfers ownership of these assets, Maloney
said. "It's much better for parents to designate
what the parents want," she said.
Estate
planners usually recommend that documents be reviewed
at least every two years. Hagler has done just that
as she has gone through various life changes. For
the moment, however, she is satisfied.
"If
something happens, I have peace of mind knowing
that things are in place," she said.