Storytelling Season
It’s the season for telling spooky stories around a camp fire so we thought we’d join in the spirit and revisit some of the stories we’ve shared with you since exploring estate planning in our newsletters for the past few months. There is so much information to share about how you can take steps now to avoid unnecessary stress, uncertainty, and expenses by taking the initiative to empower yourself and your family with an estate plan.
We’ve compiled these stories from our Tales of Probate series not to scare you (although it is Halloween after all) but to illustrate how estate planning, or lack thereof, affects families just like yours. And because we are about information and empowering YOU to learn as much as you can about the process, we’ve included links to our previous articles in response to the questions we get most often.
Tales from Probate…
House in Limbo, Costs on the Rise
A person passed away out of state but owned a house in Wisconsin. He didn’t have an estate plan in place, and his immediate family were in disagreement about what to do after his death. There were disagreements about who would act as executor, adding further delays to an already lengthy process (the family had to wait for proceedings in the state in which he died before probate could begin in Wisconsin, where the family lived).
Months after the person’s death, proceedings were finally able to begin in Wisconsin. By the time the family was able to access the house, they discovered unpaid assessments were due on the home. The Home Ownership Association, involved because of the unpaid balance on assessments, requested “supervised administration” of the probate process related to the house, which means every decision and request in the process must be overseen by the court.
As a result, the family of the deceased can’t take ownership of the house until the debt, which now stands at over $60,000, is paid. The debt, that now includes the unpaid assessments as well as the attorney fees from the HOA, will continue to accrue monthly assessments and court fees for as long as the process takes.
Capital Gains Tax Hit
A father died, leaving two sons as heirs. Unfortunately, there was no will or estate plan in place. The deceased father’s only asset was a house that the father used as a rental property. The brothers intend to sell the house and when moving forward, they discover that the house was originally owned by their grandfather and was never probated or deed transferred to the father.
If the house had been properly transferred as part of an estate plan, the brothers would have received a step up in basis for the house and would not have any taxes to pay when they sold the property.
Because the house was not probated when the grandfather died, the brothers owe capital gains taxes on the increased value of the house from the time the grandfather died all the way to the time the father died.
When Family Property Becomes State Property
A man and woman who were together for over 40 years, lived together and shared everything, but the couple were never married. The man received a large financial payout and died shortly after.
Upon his death, the woman paid for all the funeral arrangements and communicated that her partner’s intention after his death was that she would receive whatever was in his estate.
However, the man had four children prior to his relationship with the woman. He had no relationship with the children and the woman had never met them. Because there was nothing in the statute that allowed her to receive anything from the estate and there was no estate planning in place–for neither the woman nor the children, approximately $200,000 will most likely go to the state.
The best the woman could do was recover the funeral expenses she paid.
