HomeLiving TrustsBEST INTENTIONS DEFEATED BY POOR PLANNING

United States Supreme Court

United States Supreme Court

They fell in love! A second chance. So sweeping was their genuine affection that they each became soul mates and spouses. The husband had fathered several children from a previous marriage. When he lost his first wife, he gave one of his sons a power of attorney to use if it was needed. He also named his children as payable on death beneficiaries on his stocks to avoid probate.

The happy couple eventually went to a local lawyer in a small town in Oklahoma. This lawyer knew wills, and apparently little else. A

    living trust

was not suggested. Nor did the lawyer investigate how their property was owned. The will was drawn and signed. Unfortunately the lawyer did not suggest or recommend that the couple also put in place powers of attorney for each other. That was a mistake. It left the old power of attorney, whom the father has forgotten he had given to a son, still effective and in place, capable of being used. The son was biding his time.

The lawyer failed to explain or mention the effect of payable on death designations. Big mistake! Usually when a lawyer draws a will, they don’t worry too much about the property owned. They figure whatever is owned in the client’s name at death will go through probate. If the client happens to take steps to avoid probate, like using a payable on death designation, the will doesn’t apply. [This is probably the greatest flaw with relying upon a will instead of a living trust to pass your estate.] The newly signed will left everything to his wife. The client left the lawyer’s office thinking that he had provided for the love of his life. That everything was right. Just like the captain of the RMS Titanic must have assumed until he felt the first jolt of the iceberg.

Years passed. The husband’s health declined. The loving wife cared for him at home. Keeping him out of nursing care and making his final days as happy as she could. You could imagine how she felt when she learned that the payable on death designation and the old power of attorney her husband had given to his son would doom her prospects of inheritance from her husband.

The son had without notice to the couple used the power of attorney to transfer the ownership of the family home and other real and personal property to himself and his siblings. When the will was filed for probate, his conduct was discovered. [“There’s a sort of rage a man feels when he’s been deceived where he most trusted. It compares to no other anger.” Orson Scott Card] Legal title was no longer in deceased husband’s name. And the old payable on death designation left the valuable stocks payable to the children, bypassing the will. Unfortunately their was nothing left to be probated under the will. I do not have the skill to adequately report the way the surviving wife felt. As a lawyer, I never want that to happen to a client of mine. The lawyer responsible for the will was either inexperienced, lazy, or both.

The point I am making is that a living trust prepared by an experienced living trust attorney has advantages that are not possible with a will. One advantage is the focus with a living trust on how the assets shall be owned after the living trust is in place. The trust maker is encouraged to make sure all accounts, stocks, vehicles, real estate and beneficial designations are reviewed. The living trust is often named as the owner of accounts, stocks, real estate and vehicles. The review of the beneficial designations frequently results in the client updating them. Making sure the right person is named. You should always check your beneficial designations to make certain that the correct individuals are named. If you need to make a change, obtain a change of beneficiary form from the bank, life insurance company or other financial company. Fill in the names of the correct beneficiaries. And return it. If my mail use certified mail return receipt requested.

Wills are just the opposite in effect. Once the will is signed, the client will toss it in a safety deposit box and forget it. The client will usually not coordinate all of the other ways to pass property other than by their will. Most people will think that the will trumps. But it doesn’t. Probate avoidance methods, like a payable on death designation, trumps the will. It makes no sense to make your wife the sole beneficiary of your will, and then leave her out where it really counts. Especially when she is left out through oversight.

Payable on death designations are approved under Oklahoma law. They trump a will for sure. If a living trust had been used the stock would have been titled in the living trust and the payable on death designation would have been revoked or changed to match the will. And, the pitfalls of relying upon a will would have been avoided.

An experienced living trust attorney would have put new powers of attorneys in place, revoking the old one. So much unhappiness could have been avoided had the happy couple seen an experienced living trust attorney.

What is to be learned from this? Living trusts are almost always a better way to go than a will. Especially when drafted by an experienced living trust, will and probate attorney like Brent D. Coldiron. Refer your family and friends. Call Brent at (405) 478-5655 or 737-2255. He has offices in Oklahoma City/Edmond and Midwest City. He has over 39 years experience. Learn more at WEBSITE FOR BRENT D. COLDIRON


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