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Farm & Family: A plan is needed before life events impact the transfer of your assets.

Mark Balzarini

March 27, 2019

2 Min Read
senior couple meets with estate planner
MAKE AN APPOINTMENT TODAY: If you do not have an estate plan yet, consider taking that first step today to begin the discussion. Along with an estate plan, work on writing your health care directive, too. KatarzynaBialasiewicz/Getty Images

Jim and Susan had been married for 42 years. Jim was age 67 and Susan 65. They had just retired.

Jim and Susan had not thought about estate planning because they did not think they needed to think about this yet.

Jim and Susan went to their lake cabin for a long weekend away. On Friday evening, Susan was not feeling well with a headache that was getting worse. Susan was having a stroke that was bleeding on her brain. She went by helicopter to a hospital and needed brain surgery to stop the stroke and repair the damage. She survived the surgery but remained in a coma. She was unable to communicate with any of her family, doctors or nurses.

As the doctors treated Susan, they asked Jim if she had a health care directive. Jim and Susan did not have health care directives. Because Susan did not have a health care directive and the medical professionals could not communicate with her, Jim was advised to obtain a guardianship so he could make medical decisions for her.

Over the next few weeks, Jim spent a lot time and energy to obtain an emergency guardianship. This would have been avoided if Jim and Susan had health care directives appointing each other as their health care agent.

Jim would have much rather spent this time and energy caring for Susan.

A few months later, Susan died from her brain injuries. She had never recovered consciousness.

Jim and Susan had not done any wills or trusts for their assets. They owned everything as joint tenants.

When Susan died, Jim had full ownership of all assets. Together they had significant assets that exceed the state estate tax exemption amount. Since all of Susan’s interest in the assets passed directly to Jim, she did not use any of her state estate tax exemption.

Now when Jim dies, the value of the assets in his estate are projected to exceed his state estate tax exemption. As a result, his estate will likely need to pay state estate taxes. These taxes could have been avoided if Susan had a will or trust that used a disclaimer trust or credit shelter trust.

Finally, Susan inherited assets from her mother. She wanted those assets to go to her children upon her death. Because she owned everything jointly with Jim, he now owns those assets and can distribute those however he wants.

Susan and Jim needed a plan sooner than they thought they would.

We cannot predict what will happen to us tomorrow.

Where are you in your estate planning?

Balzarini is an attorney at law with Miller Legal Strategic Planning Centers, P.A. Email your questions and comments to him at [email protected].

About the Author(s)

Mark Balzarini

Mark Balzarini is an attorney at law with Hellmuth & Johnson PLLC. Contact him at [email protected].

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