Without proper estate planning, your
assets may escheat to your state’s
treasury by default.
At the very least, a proper will
can avoid legal landmines like the escheat
rule.
Basically, an estate can sit idle
for only so long before it gets swallowed up by the state where the decedent
last resided. Consider the case of Roman Blum in New York, as reported in a
recent Forbes article titled “N.Y. State Could Get $40 Million From Man
Who Died Without A Will.” You
can read all of the details in the original article, but Mr. Blum likely did
not intend the State of New York to benefit from his life’s work as a real
estate developer.
Here are the lessons to take
away from this case:
1.
Plan for your
loved ones. If you do not execute at least a basic will, your state’s laws
of intestacy may apply. To see what would happen in your state, visit the free,
interactive website mystatewill.com.
2.
Review
beneficiary forms. Many assets are transferred via designations on
beneficiary forms – including retirement accounts, life insurance policies, and
even some bank accounts. Review these forms regularly, and be sure to keep them
up-to-date.
3.
Benefit
charities. Some people refer to this as the “bomb” clause, stating that
should your entire family be wiped out in a single incident, your assets should
be distributed to specific charities.
4.
Sign documents
to protect yourself. Someone needs to make important decisions for you when
you cannot do so for yourself. With legal documents like health care directives
and powers of attorney, you can appoint those you trust to act on your behalf.
5.
Make documents
accessible. Make sure your legal documents can be found. It won’t matter
how many documents you’ve signed if no one can find them.
6.
Do not
procrastinate. Apparently, when Mr. Blum was ailing, he had finally agreed
to sign the necessary documents, but passed away before getting it done.
For more
information, please visit my estate planning Web site.