Episode Transcript:
Hey there, Legal Tea Listeners – fancy having you here! This is your host, Jenny Rozelle. You ready for our NEXT episode of Legal Tea? – Today’s topic is a cautionary tale – a real-life case with real-life people with real-life facts; though names are altered for confidentiality purposes! Not that the estate planning of the rich and famous aren’t REAL – cautionary tales will be about people like you and I. Normal people.
Today’s topic is … what happens if we pass away without a Will? Ah-yay-yay…
That’s a BIGGGGG question, I tell you! Well, when you pass away without a Will, your Estate would be governed by your State’s, what are called, intestacy laws. That’s a fancy term to say that if you die without a Will, your state has a built-in estate plan for you.
The stinky part about these intestacy laws is they are NOT intuitive – let’s talk about two real-life examples that I’ve seen play out…
First story – let’s call them John and Nicole. They were very-recently married, in their late 30s and tragically, John got a terminal cancer diagnosis. Of course, both thought they had long lives ahead of them. When the diagnosis came down, there was SO MUCH happening – so many doctor’s appointments, procedures, etc. etc. That they failed to stop and think about estate planning. Like, WHAT would happen to John’s “stuff” (non-legal way of saying assets) if/when he passed away?
They assumed it’d all go to Nicole. Wrong.
I’ll never forget sitting in the conference room … meeting with Nicole … and her sharing this story with me. It was after John passed away. After inquiring whether John had a Will or any estate plan, she said, “No.” I then started asking about John’s living relatives (because in my brain, I thought, “Okay, he doesn’t have a Will … we’re going to have to go by intestacy laws … where do his assets go?”
I asked, “Do you and John have children?” She answered, “No.”
I then asked, “What about John’s parents? Are they living?” She answered, “Yes, they are.”
BINGO. But “bingo” in a bad kind of way.
Indiana states that if someone dies without a Will AND their spouse AND parents are living, a portion goes to the spouse and a portion goes to the parents. Weird, right?
So, I gently explained these intestacy laws to Nicole – and share that his parents are oddly entitled, under the law, to a portion of John’s Estate. She immediately shared how “awkward” that would be to bring up to John’s parents. Keep in mind – these weird money conversations are having to happen WHILE Nicole is grieving the loss of her husband and John’s parents are grieving the loss of their son. NOT ideal.
Thankfully, this story ends on a happy note – fast forward through the case, Nicole worked up the courage to talk to John’s parents … and John’s parents WAIVED their interest in the Estate and let everything flow to Nicole. They did NOT have to do that – I’m sure we all can think of people where the in-laws would NOT have waived their interest. That’s when things go array – that’s when families start fighting, things get awkward, things get heated, emotions run high, etc.
Okay … Who’s ready for Story #2? This does NOT have a happy ending. Let’s call them Jack and Susie. Jack is Susie’s biological father – but Jack (and Susie’s biological mother) gave Susie up for adoption when Susie was a baby. Susie was Jack’s only child – ever.
Fast forward a couple decades, Jack and Susie find each other, get reacquainted, and establish a meaningful relationship. In fact, Susie moved in with Jack. They, sort of, re-established their father-daughter relationship and ended up living with one another (under one roof) for many, many years.
Jack ends up passing away – Susie, as the only child of Jack, comes into my office to get things rolling estate-wise. Assuming that since she is the only “blood” child of Jack, the house (that she lived in with Jack – and that she is currently still living in) was essentially Jack’s only asset and it would go to her through his estate.
Susie shares the story about Jack giving her up for adoption (*red flag for Jenny’s brain*) and how they circled back with one another … and essentially became father-daughter again. I inquire about a Will – thinking to myself, “I hope he had a Will naming her as beneficiary – because she is NOT entitled to his Estate without a Will.” She answered, “No – I don’t think he had one. I haven’t found anything.”
UGH. Well, I warned you this story does not have a happy ending.
The intestacy laws do not work in her favor. BECAUSE Jack gave her up for adoption, he severed the “father-child” legal relationship and she no longer counts as a lineal descendant (or as a CHILD) of Jack. So, that house she lived in with Jack and is currently her residence, will go through the intestacy laws to his closest family members – and, if I remember correctly, I think his siblings were still living.
So ultimately, because Susie no longer counted as a child of Jack (even though – I GET IT, they re-established their relationship … but there was nothing reversing the adoption…it was too late), she had to move out of the house and the house got sold. The proceeds ended up going to his siblings, who of course did not share with Susie – nor did they agree to let Susie “keep” the house.
HAD HE done a Will or some type of estate planning, he could have left this Estate to Susie, even though the adoption had occurred. There would have been nothing stopping him from putting her as beneficiary in a Will – though, he never did and that’s the way the cookie unfortunately ending up crumbling.
Yikes, friends. #DOYOURESTATEPLAN.
Next week’s topic is a current event/current trend -- something I’ve seen or run across that I think would be interesting on here. Next week, we’re going to be talking about Britney Spears – yes, that seems weird for an attorney to be discussing Britney Spears. Hear me out – we’re going to be talking about Britney Spears’ conservatorship. (Some states, called a guardianship.) Stay tuned – it’ll be a good one!
Until next time, Legal Tea Listeners…talk soon!
(No Sources for Episode 2.)