- Do-It-Yourself Estate Planning can be “Penny Wise and Pound Foolish”
- December 16, 2014 | Author: Kevin M. Huss
- Law Firm: Smith Haughey Rice & Roegge, P.C. - Muskegon Office
- A recent opinion from the Supreme Court of Florida (Aldrich v. Basile) highlights some of the potential pitfalls associated with "do-it-yourself" estate planning. In Aldrich, the Florida Supreme Court expressly recognized that, although the result of the case was the correct result under Florida law, the result was contrary to the decedent’s true intent. In addition, the decedent’s heirs spent thousands, if not hundreds of thousands, of dollars litigating the dispute through the Florida court system, only to lose. The issues raised in Aldrich, and the litigation leading up to that decision, would have likely been avoided had Mrs. Aldrich hired an experienced estate planning attorney at the start of her planning.
So, what went wrong? The following timeline lays out the pertinent facts.
In April of 2004, Ann created a Will using a pre-printed, "do-it-yourself" form. In the "Bequests" section of the Will, Ann wrote by hand instructions that all of the "possessions listed" be distributed to her sister, Mary Jane. The assets Ann listed were her:
- House and all of its contents (specifically identified by the address of the real property)
- Fidelity Rollover IRA (specifically identified by the account number)
- United Defense Life Insurance Policy (specifically identified by policy number)
- Vehicle (specifically identified by make, model and VIN)
- Bank accounts at M & S Bank (each specifically identified by account number)
Mary Jane died in 2007. Ann inherited cash, personal property and real property from Mary Jane’s estate. Ann deposited the cash from Mary Jane’s estate into a new investment account and she held the real property that she inherited from her deceased sister.
In 2008, Ann attempted to update her Will. Ann attached a page to her original Will with her own handwriting and signature entitled "Just a Note." The handwritten note acknowledged that, because Mary Jane died, Ann wanted to "reiterate that all [her] worldly possessions pass to" James. The handwritten note also attempted to name Ann’s niece, Sheila, as the personal representative of Ann’s probate estate. The handwritten note was signed by both Sheila and Ann, but it was not properly signed in accordance with Florida law that governs the execution of wills. As a result, Ann’s 2008 page was not enforceable under Florida law.
Ann died in October of 2009 without executing another Will. James petitioned the probate court in an attempt to have all of Ann’s assets assigned to him, based on the terms of the 2004 Will and Ann’s 2008 Note. Two of Ann’s nieces from a deceased brother asserted an interest in Ann’s probate estate. They argued that the 2004 Will did not properly dispose of the property that Ann inherited from Mary Jane.
James prevailed at the trial court level, but Ann’s nieces appealed. On appeal, the trial court’s decision was reversed. The appellate court determined that because Ann devised property in the 2004 Will with "painstaking specificity" and she did not identify her intentions with respect to any other property, the 2004 Will could only be relied on to distribute the five items identified in that document. As a result, Ann’s nieces effectively received an interest in the property that Ann acquired from Mary Jane, as Ann’s intestate heirs, clearly not the result that Ann wanted to achieve.
The case eventually made its way to the Supreme Court of Florida, which agreed with the appellate court. The Supreme Court found that it was clear from the language of Ann’s 2004 form Will that she intended to leave all of the property listed in that Will to James in the event Mary Jane died before Ann. The 2004 Will was clear; it did not contain any ambiguity. However, the Supreme Court reiterated that the 2004 Will, as written, did identify Ann’s intent to distribute all of her identified assets "without adding words to the document."
The Aldrich case is a tragic example that stresses the importance of complying with applicable law when preparing and signing estate planning documents. Simply put, estate planning documents that are incomplete, or improperly signed, risk being unenforceable. Unenforceable documents can lead to lengthy and expensive court battles like Aldrich, and can result in assets not being distributed the way the decedent intended them to be distributed. An estate plan is far too important to leave to chance. Don’t be "penny wise and pound foolish" with your estate planning. The estate planning attorneys at Smith Haughey Rice & Roegge can help you to create an estate plan that clearly identifies your wishes and complies with Michigan law.