A woman in California was hoping to leave her money to her church when she passed away. She was around standard retirement age, but she did not have any children who would get the money as heirs. However, she had not done any estate planning, and had no official documentation to show where the money should go.
A financial adviser who worked with her knew that this was a mistake, and he tried to get her to change her mind. He started by telling her how the probate system worked in California. He wanted to show her how long that process could be and how costly it could end up. Still, she did not want to make any changes to her financial plan because she had been earning a good deal of money by herself. She was nervous to make changes that could compromise that.
The adviser finally found a breakthrough, though, when the two of them sat down to lunch. While the woman did not have any children, he discovered through the course of their conversation that there was still a brother who was alive. She did not speak to him, and the two had been estranged for some time.
The adviser quickly pointed out that California laws meant that if she passed away before her brother and she did not set up a will or trust to determine what was to be done with her money, all of her wealth would go to him. She certainly did not want that to happen, so she decided to set up a better long-term plan.
Residents of California need to know how important it is to set up a plan for their money after they pass away. Without a plan in place, it may be used in ways that they did not intend.
Source: The Wall Street Journal, “When a Client Has No Estate Plan” Austin Kilham, Apr. 18, 2014