A PROPER, ESTATE PLAN
One of the primary reasons for creating and executing a Trust is to ensure that your
legacy is protected and your assets are passed to your chosen heirs after you pass, efficiently and inexpensively. While some people are leery of working with attorneys due to potential costs involved, attorneys are much less expensive now, when they are helping to prevent a potential problem down the line, than later, after you've passed and they must deal with the issues arising.
For example, imagine a middle aged man with a terminal illness and only distant cousins as relatives, and wanting to give his million dollar property to his best friend instead. He asks his friend to prepare a trust for him to sign, and so his friend does. After the terminally ill man passes, a lawsuit is filed by the one or all of the cousins, primarily due to the uncertainty whether or not the real property was properly transferred to the trust and due to the intended beneficiary also being the one who drafted the trust. Even the tenant of the property took advantage of the error by not paying rent while dispute over title is occurring.
The friend ultimately prevailed against the distant cousins, taking title of the million dollar property but not until after an extremely expensive and long legal battle. In this case, proper legal advice and a legally drafted and executed trust would have prevented this issue from arising.
How about an example of a woman passing leaving her loving husband behind, and with what she thought, everything she owned? Unfortunately, he learns after her passing that she never formally divorced her out-of-state spouse from long when the former spouse, or current in this case, asserts himself to collect upon hearing of her death from a close friend. A legal battle between former and current spouse ensued but not without a heft price tag of legal fees. This was easily preventable with a legally binding Will prepared by a knowledgeable attorney.
A last and final example, it is common for people to hold pay-on-death accounts or beneficiary designations (i.e., bank accounts, life insurance, IRAs, annuities, etc.) are assigned to a beneficiary. The decedent changes his mind about who he wants to leave all of his assets to but forgets to change beneficiary designations on his pay-on-death accounts. As a result, upon his passing, the accounts are passed to the person originally assigned even though he would have wanted ALL of his assets to go to another person. This would take a costly legal battle to try to prove otherwise and even then the original beneficiary is likely to win.
These are just a few examples of many and there are countless ways a problem can
arise. They are often unique and can be extremely complex but I deal with them on a regular basis. As estate plan and advice by a competent attorney can help create certainty that everything will be taken care of in the appropriate manner if, and when, you pass.