By: Barry E. Haimo, Esq.
August 11, 2015
Communication Series – Failure to Communicate During Estate Planning – Part 1
Even the most thoughtful and thorough estate plan can give rise to confusion and conflict if you have not taken the time to talk to your family about the plan.
When it comes to estate planning, I can’t stress the importance of having an open and honest dialogue with your family and heirs enough. It’s never easy for you or your loved ones to speak about life after your death, but communicating your plans is vital to preventing confusion, chaos, and conflict.
To illustrate my point, I’d like to tell you about how failure to communicate during planning impacted one family in a particularly devastating way.
Even More Trouble in Troubling Times
The Huangs had the biggest house in the entire neighborhood of Fanning Springs—and they needed every inch of it, considering the size of the Huang family. The sprawling household was not only home to Mr. and Mrs. Huang and their five children, but Mr. Huang’s mother and Mrs. Huang’s father, three energetic dogs and one enormous cat.
After the five children had grown and the grandparents passed away, the house seem oddly empty despite being cluttered with toys, old furniture, and other odds and ends left behind by its former inhabitants. The barren, deserted look of the house was only worsened after Mrs. Huang died, and Mr. Huang began to let the house fall apart. Mr. Huang had neither the energy nor means to maintain the property and keep up with household responsibilities, and it was only a handful of months before the yard filled with debris and the mailbox was packed with unpaid bills. All that remained of the family pets was the enormous cat, who had thinned out considerably on a diet of whatever rodents and leftovers he could find.
The residents of Fanning Springs didn’t think too much of it when the Huangs’ mailbox became stuffed to the brim with unopened mail, since it was Mr. Huang’s habit to never empty the mailbox until he absolutely had to, when he could be seen shoveling all its contents into a trash bag. It wasn’t until bill collectors began knocking on his unanswered door that it was discovered that Mr. Huang was dead.
When the children returned to their hometown for the funeral, they were incredibly shaken to find the state of their childhood home. Residing in different areas across the country, none of the kids had visited home since their mother’s passing. During the few months they’d been away, both their home and their father’s lifestyle had clearly deteriorated considerably.
After the funeral proceedings, it was with heavy hearts that the children gathered to discuss their parents’ estate plan. Mr. and Mrs. Huang had never spoken with their children about their plans for after their deaths, and their children—not wanting to upset or disrespect their somewhat conservative and reserved parents—had never brought it up.
Everyone was relieved when they discovered from their mother’s surviving sister that their parents had taken the time to create a will. But though Mrs. Huang had mentioned the will’s existence to her sister, she had neglected to mention where it could be found.
Thus began the exhausting process of trying to unearth their parents’ will from the mountains of memories, odds and ends, and just plain old junk in their childhood home. Their parents had never owned a computer, so their children were left to sift through stacks of paper crammed into desk drawers and closet boxes.
Even more difficult was the task of paying off the bills and debt collectors who were constantly ringing their parent’s home. Their father had thrown the vast majority of his mail away, and the children were unable to locate several important medical bills, credit card statements, insurance premiums, and invoices for mortgage payments. To make the task of paying off their parents’ debts even more challenging, none of the children had access to their parents’ accounts. In fact, they weren’t even sure what kind of accounts their parents had, and with which financial institutions.
Eventually, the children were forced to concede that their parents’ will might be lost forever, and the task of settling their debts was too difficult to handle on their own. They then began estate administration proceedings (probate).
The court appointed a Personal Representative (or executor) to act on the family’s behalf, charging that individual with the legal duties of inventorying assets, notifying creditors, and paying their parents’ debts. Every organization with which the Huangs ever did business received a formal request to confirm or dispel whether any of the Huang’s assets were there and if so, how much. Ultimately, their parents’ property and assets were distributed to the children according to Florida intestacy laws, though only after two years in probate court and tens of thousands of dollars in fees.
What can we learn from the Huang family’s devastating and stressful experience? A lot of undue hardship can be avoided through family communication.
For instance, if Mr. and Mrs. Huang had simply told their children or surviving family members where to find their will and other important documents, such as a trust, the heirs to their estate would have had a legally binding roadmap to how to settle the estate, distribute property, and honor their parents’ wishes. If their parents had had a thorough and upfront discussion with them about their financial situation, the children would have a better idea of what to expect in terms of the assets they would inherit and the debts that would need to be paid. It would have prevented aggravating an already difficult situation, which would have resulted in an easier transition on the family.
For effective strategies for discussing your estate plans with your family and helping to avoid unnecessary strife and confusion, stay tuned for next week’s post! And, as always, feel free to contact Haimo Law with any concerns and questions you may have regarding family discussions or any other aspect of the estate planning process.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
YOU ARE NOT OUR CLIENT UNLESS WE EXECUTE A WRITTEN AGREEMENT TO THAT EFFECT. MOREOVER, THE INFORMATION CONTAINED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. EACH SITUATION IS HIGHLY FACT SPECIFIC AND EXCEPTIONS OFTEN EXIST TO GENERAL RULES. DO NOT RELY ON THIS INFORMATION, AS A CONSULTATION TO UNDERSTAND THE FACTS AND THE CLIENT’S NEEDS AND GOALS IS NECESSARY. ULTIMATELY WE MUST BE RETAINED TO PROVIDE LEGAL ADVICE AND REPRESENTATION. THIS INFORMATION IS PROVIDED AS A COURTESY AND, ACCORDINGLY, DOES NOT CONSTITUTE LEGAL ADVICE.