Customer Case Studies
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Case Studies of eLegacy Customers
Family Harmony and Professional Trustees
Sandra and Tom have been married for 50 years and have three adult children in their 40s. Their children are cordial with each other but aren’t particularly close. Although Sandra and Tom have strong relationships with each of them individually, they worry about what might happen to the sibling relationships once they are gone, particularly since there is a fair amount of money involved.
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Sandra and Tom’s oldest son, Theo, has always been a bit controlling and power hungry. Even as children, he had a way of bossing his two younger sisters around. Theo has made comments throughout the years implying that he will be the one in charge of his parent’s estate. Sandra and Tom, however, don’t particularly trust Theo’s judgment in financial matters or his interpersonal skills. If anything, their youngest daughter would be the best choice for the job, but they know that wouldn’t go over well with Theo, and they doubt their daughter would want to be put in that position anyway.
Sandra and Tom have seen other families they know that have been torn apart by conflict when one family member is put in charge of the estate and others are left out. To prevent this from happening to their children, they decided to name a professional trust company as their successor trustee.
They realize there will be a cost to have their estate administered professionally, but in their minds it’s a small price to pay to see that their estate is administered competently and without their children being pitted against each other. After selecting a professional trustee they felt comfortable with, they updated their trust to include the trustee, along with detailed instructions for how they wanted their assets distributed.
After updating their documents, they held a family meeting with their children where they explained their decision. Theo wasn’t particularly happy about not being in charge, but he understood the reasoning for it. All of the children, including Theo, expressed appreciation that everything had been arranged in advance and that they would not be personally burdened with the consuming task of administering their parents’ estate.
At the age of fifty-four, Virginia was told she had a terminal illness and had about a year to live. She was concerned about leaving her approximately $2 million estate to her only daughter, Emily, who was about 18 at the time. Emily was a good child and never got into too much trouble, but Virginia worried about her financial inexperience and what potentially negative effects a sudden and sizeable inheritance could have on Emily. Virginia also worried about her estate getting hung up for years in court proceedings.
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With the help of her estate planning attorney, Virginia created a revocable living trust to hold her assets. Her home and vacation properties were re-titled into the name of her trust as well as her bank accounts and vehicles. Her attorney recommended naming the trust as the beneficiary of her 401k account, which was valued at approximately $500,000, so that these proceeds could be managed long-term for Emily’s benefit rather than going to her in one lump sum.
Virginia named her close sister as agent under her Healthcare Power of Attorney to make medical decisions on her behalf, saving the family the burden of having to go through court proceedings to be appointed as her guardian. She also named her sister as successor trustee of the trust and as agent under a Financial Power of Attorney.
As Virginia’s condition deteriorated and she became confined to her bed, Virginia’s sister was able to seamlessly assume management of Virginia’s financial affairs. She worked together with Virginia’s existing financial advisor to ensure accounts were properly managed and Virginia’s needs were met.
When Virginia passed away a few months later, there were no concerns about the state of her financial affairs. Rather, the family members were able to focus on grieving the loss of their mother, sister, and friend. A couple of weeks after the funeral, Virginia’s sister contacted the attorney and financial advisor for guidance in the administration of Virginia’s estate.
Virginia had directed that a few smaller distributions be made to a few of her close friends and charities she supported. But the bulk of her assets were to be administered in a trust for Emily. For the first few years, Virginia’s sister would manage these funds and see that Emily’s needs were met and that she continued on her educational and career path.
Within a matter of days, Virginia’s sister was able to fully administer the estate assets, make the distributions to friends and charities, and establish Emily’s trust. Emily is currently pursuing her bachelor’s degree and her aunt works closely with her to see that her needs are met while encouraging her to be as productive and independent as possible. In a few years, as directed in Virginia’s trust, Emily will be able to assume full control over her inheritance, which continues to grow under the guidance of Virginia’s financial advisor.
Terminally Ill Mother with an 18-Year-Old Child
Wrongful Death of Young Man with Estranged Parents
Jacob was devasted when his younger brother Daniel was killed in a head-on collision while driving on a winding two-lane highway. Daniel was unmarried with no children. His closest family members were his brother Jacob and his step-dad, who had come into his life at an early age and was like a father to Daniel.
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Daniel didn’t have very many assets other than his beloved truck, a small bank account, a few tools, and some camping equipment. He also didn’t have a Will, which meant that his assets would be distributed according to his state’s intestacy law. (“Intestacy” refers to when someone dies without a will or trust.)
Jacob sought legal advice regarding the administration of his younger brother’s estate. Although Daniel didn’t have many assets during his lifetime, it was determined that the other driver had caused the collision and was at fault. As a result, there was over $1 million in insurance proceeds that were payable to Daniel’s estate.
Under the state’s intestacy statutes, the assets of an unmarried person with no children are distributed to the person’s surviving parents. Daniel was survived by his biological father and mother. However, he did not have a close personal relationship with either of them. His mother was severely addicted to methamphetamines and his father had physically abused Daniel and disappeared from his life when Daniel was about 8 years old.
Notwithstanding, his biological father and mother were legally entitled to split these insurance proceeds in a probate of Daniel’s estate, while Jacob and Daniel’s stepfather received nothing. To make matters worse, soon after Daniel’s passing, several other distant relatives and acquaintances had entered Daniel’s apartment and taken his camping equipment, tools, and personal possessions. These items were never able to be recovered.
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