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Review Your Estate Planning

If you have an estate plan, count yourself among the responsible few. Most people do not have one. Even if you have an estate plan, however, you should review it periodically to be sure it will meet your needs as times and circumstances and how you view your world change – and they will. When should you review your estate planning?

I was recently called by someone whose father had just passed. They used to live in Illinois, but they moved to California in the 1980’s. His mother passed away years ago, and his father remarried. Over the years, some disharmony grew in the family. After his father’s passing, this gentleman discovered that his brother had taken advantage of his father and “borrowed” tens of thousands of dollars. Although, this man could see the evidence in the bank records and remembers off hand remarks his father used to make, there was no documentation indicating whether these transfers were intended as gifts or as loans. We suspected the latter.

His brother was a spendthrift. He had filed bankruptcy in the past and was on the verge of loosing his house at the present time. His brother never seemed to be able to hold down a full time job. The evidence was clear that he lived off of his father, but there was no record that any of the money taken by the brother was intended as a loan, even though his father suggested they were loans during his life.

Here is the problem. The father’s statements are hearsay that cannot be introduced as evidence by either brother. The “Dead Man’s Act” precludes anyone with an interest in the litigation from introducing into evidence statements they claim the decedent (their father) made during life. Because a dead person cannot affirm or refute the statements, they are considered inherently unreliable. Unless a third party (someone with no interest at stake) in the litigation heard the father say something and remembers what was said, the father’s statements cannot be entertained by a court as evidence.

Another problem is that presumptions are applied in circumstances likes this. The presumption of the law when a parent transfers money to a child is that the transfer is intended as a gift, absent evidence to the contrary. (The opposite presumption applies when the transfer is from child to parent.) These presumptions are applied because, without some tie breaker, cases involving transfers of money with no reliable indication from the transferor of the intention of the transfer could not be resolved.

Thus, the presumption is applied, and the burden is on the who wants to prove the position contrary to the presumption to provide some reliable evidence to rebut the presumption. The alleged statements of a dead person made to a party who has an interest in the outcome of the litigation are considered inherently unreliable. Without some documentary evidence (like a promissory note, even handwritten notes from the decedent, or the testimony of another person with no interest at stake), these cases are decided based on the presumption that applies.

Regarding the phone call I received, the caller did not have a good relationship with his father’s new spouse, which is often the case in second marriage situations. The new spouse is an heir regardless of the father’s intentions. In fact, without a Will or a Trust, the father’s intentions are irrelevant. The new spouse also lives in the house and thereby effectively controls all of the father’s assets and records. She said there was no Will, and there is no way to prove otherwise – unless a Will can be found.

The caller remembered that his father sometimes spoke of a Will, but he had no idea where to look. He suspected my father might have been the attorney who drafted the Will, if there ever was one. He called me because, before his parents moved to out of state, his father had used my father as his attorney. I checked our records and determined that my father had done a Will… in 1978! Our records showed the original Will was to be kept in the safe deposit box of a local bank.

Of course, that was before they moved to out of state. Unfortunately the bank had changed hands, and they had no record of his father’s safe deposit box or the Will. The contents of safe deposit box were undoubtedly removed from the bank when his father moved, out of state, and any clue to where the original Will might be was long ago lost. He reached a dead end, and there was nothing more he could do. He could not stop the free for all.

Circumstances always change. Estate planning should be reviewed whenever significant life changes occur. Some of those life changes that should trigger review of estate planning include deaths in the family, moving, retirement, marriage, remarriage, divorce, financial difficulties (or success), inheritance, etc. Simply getting older is a life change that warrants reviewing your estate planning.

Even if things are more or less the same, a person should not go five years without pulling out the old estate planning documents to review them to be sure they still make sense. Sometimes life is not the only thing that changes; sometimes we change. For all these reasons, doing your estate planning is good, but you need to review your estate planning periodically to make sure it still makes sense.


For more articles on estate planning, visit the Drendel & Jansons Estate Planning Blog.

For articles on various topics of law, visit the general Drendel & Jansons Law Group blog.

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