Here is a true story for you with some details changed to protect the innocent.
Jackie was a single, middle-aged woman without any living relatives. She owned a house and needed to have it in a revocable living trust in order for her estate to not have to pass to friends by way of probate after her death. But Jackie was loathe to even make a Will, even though her friends kept telling her she needed to do so.
Jackie contacted her old friend Marie and asked her advice. Marie is an attorney who works in personal injury law but doesn’t know the ins and outs of estate planning. Marie advised Jackie about how to do a very simple Will, using a form they pulled off the Internet.
Jackie finally signed her Will, leaving her house and estate to various friends. Under California law, if someone owns $150,000 or more worth of assets, then upon their death, regardless of whether they have a Will, their estate will have to pass through the lengthy and expensive probate court proceeding. By not making a trust, Jackie was, at least, going to saddle her friends with a long wait time before they would inherit from her.
Jackie also needed to have a complete estate plan, one that would have included a Durable Power of Attorney for Financial Management as well as a Health Directive.
Before Jackie got around to making those documents, she moved to another state, one that has its own set of probate rules.
Someone there advised Jackie that because she had left California, she ought to finally make a trust under the laws of her new state.
So Jackie found an estate attorney who prepared for her drafts of a valid trust, a new back-up will, power of attorney and health directive. It all looked good on paper.
The problem was that Jackie never returned to her attorney to sign final, edited versions of the documents. Her lawyer sent her several letters asking her to return to his office for a signing meeting. Jackie just blew it off, thinking she would get around to it later.
Then, at the age of 60, one day, Jackie had a massive heart attack in the middle of a Walgreen’s parking lot. No one expected it. Jackie was rushed to the emergency room and did not survive.
Her friends looked through her house to see if they could find any estate planning documents, and they could not. They contacted a number of local estate planning attorneys to ask if they had worked with Jackie and if they had her documents. They found a Mr. Roger Smith, the attorney Jackie had been working with, and he let them know that Jackie had never returned to his office to sign her final documents. This meant that she had no valid estate plan under the laws of her new state.
The local friends were able to track down Marie, who lives in Berkeley, and they asked Marie if she might have a copy of Jackie’s old Will. Marie remembered having watched Jackie sign that will, and, in fact, Marie had been nominated to serve as Executor of Jackie’s Will. Sure, a probate would have been required, but at least maybe there was an old, validly executed Will from the time when Jackie lived in California.
Marie looked high and low for a copy of Jackie’s will and was unable to find it. Jackie had not made copies for any of their other friends. The original and any copies that may have existed somewhere were nowhere to be found.
Marie reported all of this back to Jackie’s friends in her new state, and even to the local probate court.
A state will recognize a Will made under the laws of a different state. That’s an old legal doctrine since Wills have been around since even before the United States was founded.
But if there is no Will that anyone can find, then the states have laws about who will inherit a decedent’s property. It is called the law of intestate succession, which means that property goes to one’s relatives. The legislatures of the 50 states have encoded this concept into state laws, on the assumption that most people would prefer their property go to their next-of-kin. (And if that’s not your assumption, then you definitely need to state otherwise in a written Will.)
Had Jackie had living relatives, they could have gone to court and claimed to be her legal heirs, and after a long probate proceeding, they would have inherited her estate.
As it turned out, Jackie had no living relatives, which is why she especially needed to have executed and kept a valid Will.
When someone dies intestate—which means without a Will—and they also have no relatives, then and only then does one’s property (which includes cash) pass to the state in which one is a resident. There’s a funny legal word for this. Property is said to “escheat.” It doesn’t happen very often, because most people who die without a Will nevertheless have some living relatives who can go to court and prove themselves to be rightful heirs.
Here Jackie’s wishes were not carried out. Her money, house and personal items did not go to her friends and favorite charities. Her personal items were sold or ended up with the Salvation Army, and all of her money, after the sale of her house, went to the state government, which may be seen as an OK outcome since the state government is strapped for cash.
But it is far better if everyone over the age of 18—whether married or single, rich or not—to make a basic set of legal documents, including a Will or, better yet, a trust to avoid probate.
The morals of this story are: Don’t procrastinate! Keep your original estate documents handy, and make copies for your Executors and Trustees.
