Some time ago, a client of mine approached me with a unique problem. The client’s friend, whom we will call Martin, had recently passed away.
My client explained to me that Martin’s wife died many years ago, and that he had no children. Martin lived alone, and rarely had visitors save for my client and a group of friends, that provided him with companionship and assistance in his old age.
We discovered that a trust owned Martin’s home. My client found a copy of this trust, which Martin and his deceased wife signed in 1978. All of Martin’s successor trustees were dead. All of the beneficiaries named in the document, which were to receive Martin’s property upon his death, were also dead. A section of the trust entitled “Remote Contingent Beneficiaries” stated in part that in the event of a failure of beneficiaries, the trustee was to distribute property to the heirs of the named individuals. This was a problem.
To make a very long and arduous story short, as the process took months to complete and necessarily involved the Court to appoint a trustee, we eventually managed to find a long lost brother-in-law, with whom Martin was estranged, and a niece of one of the named beneficiaries. These people, who had not visited or called Martin for many years, if ever, inherited the sale proceeds of Martin’s home. His good friends, whom Martin would have wanted to receive his property, received nothing. Needless to say, this did not sit well with my client, or his friends, and I am afraid that much of their ire became directed at the author of this story. It appears that the saying that no good deed goes unpunished is an undeniable truth in this case.
The Morale of the Story: Review and Update Your Estate Plan
There is a good lesson to be learned from Martin’s case. If you fail to review your estate plan, even one as basic at Martin’s, unintended results can, and will occur. Naming successor trustees and administrators, and updating these individuals regularly when circumstances change, is critical in order to make your plan work. It is also important to give serious thought to what are ordinarily “boiler plate” sections of wills and trusts, which state what happens in the event of a failure of beneficiaries. Just because it is “boiler plate” does not mean the language in these provisions will not be used and is not important. Amending a will or trust to address these issues is relatively inexpensive, and it is a good idea to perform these reviews every few years and update your plan accordingly.