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I LIKE TO THINK my husband and I were savvy and careful when planning our estate. Yet anybody can make an occasional dumb mistake. That brings me to my next surprise in settling my husband’s affairs—and it came with an unfortunate legal bill.
As a couple, we’d established a revocable living trust at a young age, when death was a strictly theoretical idea. The trust eliminated the need for our estate to go through probate, not that I knew what that was at the time.
Ten years later, as it dawned on us that we had edged closer to the end of life, we reviewed our trust for changes in the law and in our finances. This process included updating financial accounts, so they’d roll into the trust, either immediately or on our deaths.
We’d decided on a trust based on our personal situation. Not everyone needs one. Shady characters try to sell them to people who don’t. Still, even if you don’t need a revocable living trust, you do need to ensure your house, retirement accounts and other assets are inherited according to your wishes. The process of establishing the beneficiaries for a financial account is typically simple.
After reviewing our trust, we dutifully mailed request letters to retitle accounts, so they’d be included in the trust. Some institutions immediately updated our accounts, while others responded with their own forms that needed to be signed and notarized, and then returned. Well, we were busy. With kids and work and life, those forms sat unattended, along with other important but not urgent paperwork.
After my husband died, I found these forms. Luckily, most accounts had been retitled and had named beneficiaries. But one personal account had no beneficiary named. Our legal work to ease the management of our estate was clouded by this one oversight.
Once again, I appreciated the value of working with our attorney, a calm, knowledgeable professional by training and practice. While I fretted, he got busy with the work of going to court to have this account added to the trust. The expense and delay could have been avoided had we followed through at the beginning.
What did I learn from settling my husband’s estate? Here are three takeaways:
Catherine Horiuchi recently retired from the University of San Francisco’s School of Management, where she was an associate professor teaching graduate courses in public policy, public finance and government technology. This is the fifth article in a series. Catherine’s four earlier articles were At the End, The Aftermath, When It Rains and Muddling Through.
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I am not an attorney or expert in this field, but my wife and I were advised not to have all assets in joint ownership. In fact, we were told to put the house in my wife’s name alone. It had something to do with the estate tax exclusion where joint ownership doesn’t count. It may have to do with state laws. In any case, it can be tricky to get right. A good estate lawyer before and after is essential for many people.