A Sad Tale of Good Estate Planning Advice Gone Wrong

by Fern Alix LaRocca CFP® EA · 2 comments

estate plan

I just got back from a memorial service for a good friend of mine that I had known since high school. Unfortunately he left behind an estate planning nightmare. I gave my friend many financial planning tips over the years and he did everything I suggested so he could to make sure his business, and finances would be in order in case something happened to him.

So- what went wrong if he did everything right?

Our culture supports us working with family and friends and those that we trust when we are put in positions of having to make important decisions about things that we don’t know anything about.  We have our cousin help us buy a car (since he works at the dealership) or the aunt that does our taxes (since she works at an accounting firm) or our brother-in-law that will refinance our home at a good rate (since he is a mortgage broker).

In this case, a family friend who is a retired attorney had set up the estate plan.  There was just a will and nothing else. Now the estate has to go through probate and the heirs are watching their inheritance go down the drain since they are helpless to keep his business running until it could be sold. No one has the power to pay the bills on his home and no one can pay his employees. Everything freezes until the estate settles.

Can you imagine the shock and grief that his adult children are going through? Not just mourning a death but watching a man’s legacy go down in value right before their eyes and there is nothing they can do.

Now the attorney is a good man and has had a good legal career; but if you look at his credentials, he did very few estate plans and was mainly a personal injury attorney. He gave my friend a “good deal” on the estate plan just like many of your family friends will give you a “good deal” but sometimes it is better to pay full price with a stranger who has the expertise that you need. It will cost you a lot less in the long run.

Treat your well meaning family and friends like you would when you are scrutinizing other professionals. Check out their background and credentials to see if they really have the expertise to help you with your particular problem.  It is a complex world out there and everyone cannot know everything so you really need someone with a particular skill set that suits your needs.

I remember when I needed a skin graft and I asked my orthopedic surgeon who saved my life and with whom I trusted, to do the surgery. He replied, “Well, Fern, I can do it, but I haven’t  done one since med school. I think you would be better off with a surgeon that does a lot of these types of surgeries.” Enough said. I got it, and you should too.

Get your estate plan done right by an estate planning attorney who specializes in estate and elder law.

 

{ 2 comments… read them below or add one }

Bertha March 2, 2012 at 5:56 PM

Wow! Don and I are starting the process of estate planning. This is good to know! Thank God you are there to help and coach the family! Bless your heart! Thanks Fern! Bertha

Charles Wilson March 10, 2012 at 6:19 PM

A very helpful story, Fern, and exactly what my risk management advice is to clients (and anyone else who will listen!): “Hire the right skills, not friends and family.”

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