ESTATE PLANNING HORROR STORIES FROM THE REAL WORLD (#4)

                        “Use of Legalzoom Results in Legal Mess.”

            This week’s story involves a young woman who died prematurely from cancer.  When first diagnosed with cancer, she decided to prepare her own Will using Legalzoom.com.  She actually succeeded in preparing a “legal Will”, which complied with all of the witnessing formalities required by Florida law and which named her brother as the personal representative of the estate.    Unfortunately, without having been counseled on important legal issues, her “legal” Will has created many problems for her family.

            This young woman left behind three minor children, ranging in age from 11 to 7.  She left her entire estate to be divided equally among the children.  The children also were named as equal beneficiaries of her life insurance policy.  She had long ago divorced the children’s father and he had not been involved in their lives.  The first legal issue which this woman did not understand is that minor children cannot legally own property or control money.

            As a result of the language in the will form she used, it will be necessary to have all of her money and property, including the life insurance proceeds, distributed through the probate court and it also will be necessary to establish a court-supervised guardianship of the children’s assets.  This will impose unnecessary expenses on the family and a delay in the children receiving the life insurance proceeds.  Additionally, when the children reach the legal age of 18, they will be handed their share of the guardianship money and property whether or not they are mature enough to handle those amounts.  With proper counseling that money could have been protected from the children making rash spending decisions.

            Because everything was left to the children equally, if one child gets sick or hurt, or another child has problems in school, the guardian will not be allowed to give more funds to the child who most needs them.  Is that the way you would raise your children?  If one child needs braces or a new pair of shoes, do you get them for all 3?  By not counseling with an attorney to learn about ways to allow the guardian to have more flexibility, that opportunity was lost.

            Another huge problem is that the Will does not clearly identify who the young woman wished to be guardian of her children’s property.   She may have thought that naming a personal representative of the estate was the same thing as naming a guardian for her children, but it is not!  This leaves open the possibility that the children’s father, with whom the woman and her children had no contact and whom she would never want to have control of one penny of her money, may become guardian of the children’s property.  Unfortunately, this could lead to a contested guardianship proceeding between the woman’s brother and the children’s father for control of the children’s money.  Such a fight would serve only to further divide the family and drain the children’s estate.   Although the father is presumed by law to be the guardian of the person of the children, (i.e. the person to raise and look after them), the mother could have named someone else, such as her brother, to control the children’s money and property, so their father could not spend it on himself or otherwise misuse it. 

            With proper counseling and at a reasonable cost, a trust could have been established for the children which would have avoided both the extra expense and delays of the probate process and which would have named specific guardians and trustees to handle the money for the children’s benefit.  The money could have been kept in one pot to be used as needed until all the children were grown and then could have remained in a trust for each child after each child reached 18, so as to prevent those assets from being squandered at an early age. 

            These issues all would have been addressed during the estate planning process at the Cramer Law Center.  As Legalzoom itself says:  “Legalzoom’s legal document service is not a substitute for the advice of an attorney”… “The legal information on this site is not guaranteed to be correct, complete, or up-to-date.”

(Link to full disclaimer:  http://www.legalzoom.com/universal/disclaimer.html )

After all, it’s NOT ABOUT DOCUMENTS, it’s about results!