Bank Accounts are Not Wills

bank_accounts_are_not_willsIt seems that some people are allergic to the thought of estate planning and creating a Will that outlines how they want their assets distributed after their death. We have crafted countless estate planning documents and Wills over the years. A Will is your friend and your family’s friend. It’s not to be feared or avoided.

An example of this phobic thinking and perhaps too much reliance upon what a parent hoped would be goodwill and honesty between his children is from Market Watch.  S. in Virginia wrote to them about a situation involving her sister and a large amount of money left by their father. She explained:

  • Their father told her and her sister that he had made her sister a signatory on his bank account so she could pay bills from his bank account after he died. “The rest gets split between you two,” he said.
  • The father died unexpectedly five months later (their mother predeceased him). He didn’t have a Will.
  • After nearly four months in probate S., discovered her father accidentally made her sister the owner of his bank account (not just a signatory) and the money in it.
  • ’ law firm told her this happens often and is normally rectified in the Will or the heir benefitting from the extra money distributes it as the deceased wished.
  • There was no Will and her sister refused to split the money. She kept the $100,000 that was in the bank account. She was reimbursed for the bills she paid for the estate from other assets of the estate.
  • Not surprisingly, S. says she’s severed ties with her sister and avoids family events. S’s sister has told her that by S. saying their father made a mistake she’s really saying he was stupid.

Since we started the firm in 1991 over the years, it’s been my pleasure to help individuals and families. Ideally, most individuals think ahead about how they want their estate handled, there’s open communication within the family, documents and estate plans are executed and after the loved one passes away, the process moves smoothly and the desires of the client are put into action.

Then, there are cases like this which, although the details may be different, the end result is generally the same. A family member chooses not to have a Will crafted perhaps thinking some costs could be avoided and bad things happen as a result. Instead of a Will other methods were used and,

  • The method used to transfer funds or leave funds for a family member was the wrong one, or
  • It wasn’t executed properly, or
  • There was some ambiguity that one family member took advantage of, and
  • Another family member ended up with the short end of the stick (or no stick at all).

If this story is true because of the father’s choices (and apparently, mistakes), one of the daughters was denied $50,000 she should have and the other has $50,000 more than he wanted her to have. I’m guessing this amount is far more than whatever money the father thought he could save by not creating a Will.

Contact our office to discuss your assets and how you want them handled after you pass away. Don’t make assumptions, don’t take actions without being educated on the relevant law and potential taxes and don’t think a bank account and some words spoken to family members will be enough for your plans to actually take place. Doing things the right way will give you peace of mind and your heirs will be treated how you want them to be treated.