That’s all it takes. One signature can completely undo the most careful estate planning. Just what am I talking about? Let me tell you about Jim (not his real name) who met with me recently to review his estate plan. We talked about his unique family situation, what he owned, who he wanted to benefit and why.
Jim was married with one little boy. He also had an older daughter from a previous marriage. She lived with Jim and his family as Jim had sole custody. Although Jim loved both of his children equally, he felt that his daughter should receive something extra from his estate. He reasoned that his son would inherit from both Jim and Shawna as well as from Shawna’s parents who were quite wealthy. However, his daughter’s mother had disappeared years ago and was unlikely to leave anything for her.
When Jim and Shawna signed new wills shortly after they were married, Jim’s wife had agreed that if they both died, Jim’s daughter should receive a somewhat larger share than their son. The wills that they had signed reflected that. It was some years later that Jim came to me on his own (I had never met his wife) and told me how concerned he was that his wife could change her will after Jim’s death and reduce the share that his daughter would get or cut her out completely. I also pointed out that if Jim died and his wife married again, her current will would be revoked unless special steps were taken.
Jim was in the midst of applying for a significant amount of life insurance coverage. As we talked about what to do, I explained that documents could be drafted in such a way that all his estate planning goals could be achieved. The insurance payout could be divided in different portions with some going into trust for his daughter, another portion into trust for his son and the balance to his wife. We worked out the details and I drafted the complex documents that were needed.
When I later met with Jim to review and sign his documents, he provided a copy of the beneficiary designation form which I had requested. I was surprised to discover that his wife had been named as the only beneficiary. This was completely contrary to my instructions. Jim hadn’t discussed his plans with his insurance agent. Instead he simply went along with the agent’s assumption that Jim was planning to leave everything to his wife. With one signature on that beneficiary designation form, Jim had completely undone all of his careful estate planning.
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Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
