Why It’s Important To Do Estate and Inheritance Planning

by Silicon Valley Blogger on 2012-02-1311

There have been some high profile cases featured in the news about people passing away and leaving behind more than sweet memories and a beautiful legacy for their loved ones. It’s sad enough when someone goes, but when the deceased’s family and friends end up with difficult issues to work through, then it’s even sadder.

It’s my opinion that fighting over inheritance matters and getting caught without disability or life insurance when you need it most are up there as scary scenarios that can easily spell the most disaster for anyone, especially while the family is at its most vulnerable. Get hit by any other disaster and you can bounce back much more quickly, when your family is whole. But losing a breadwinner unexpectedly is like running a race on one leg. It’ll take a while to get over and will require a lot of training, therapy and painful recovery before you can return to normal living.

If that talk isn’t morbid enough for you, then you aren’t like many people who’ve decided to avoid estate planning altogether because it’s just too unpleasant to face. On a personal note, I’d like to proclaim that one of the goals I have as a parent is to make sure I have an up-to-date estate plan in place. In fact, no matter what life stage you’re in, nobody can argue that a solid plan is something you need. It doesn’t have to be too complicated, and a fairly simple will should ensure that your heirs don’t have to grapple with the State after you pass away.

Entering The Mess Of An Ugly Family Feud

estate planning

Chances are, you’ve heard quite a few high profile cases in the public eye that involve family drama surrounding estate transfers. Unfortunately, there are a good number of celebrity cases out there where estates have been tangled and assets snared in probate or in other complex legal situations. A brief look at some stories should provide us some lessons:

Feud #1

It was sad to hear about the untimely passing of Whitney Houston. And it’s precisely these unexpected situations that complicate those unresolved family financial matters that are tied up in the courts. Prior to her death, Whitney was working to straighten out her own late father’s estate which found her to be in conflict with her stepmother. On top of this, there are rumors that her estate ($100 million fortune) is no longer intact. That’s just a rumor at this time though.

Feud #2

Anna Nicole Smith was a controversial celebrity who left behind a sole heir — a baby daughter who found herself alone in the world. At one point, her daughter stood to inherit Anna’s late husband’s multi-millions, but the latest ruling hasn’t favored Anna’s beneficiaries. There was also a time when the baby was in the midst of a paternity suit, which suggested that the ultimate guardian of the child could have potentially been in line for the massive windfall. This case has found some resolution though, and it looks like Anna’s estate won’t be receiving the huge wealth infusion that was in contention. We no longer have to wonder about whether a billionaire’s assets could fall into the clutches of some random man that had nothing to do with the billionaire in the first place.

Feud #3

Another story involves James Brown’s family and estate, where Brown left behind an old will that he didn’t update despite the fact that he took up with a lover whom he married and had a child with. This wife sued to attempt to get what is due her.

Feud #4

Quite possibly the most well-known and infamous family fight in history involves the billionaire oilman J. Paul Getty, whose heirs sought to break up the $4 billion trust that was the source of their fortune. It took 18 months of acrimonious court battles to appease 26 potential heirs.

So you can see that many families of famous and wealthy people have historically faced challenges in this realm. You’d think that with all the money some of these big names have, that they’d know and make it a priority to spare a few thousand to take care of these serious matters. Now of course, I’m sure it’s not as simple as forking out $1,000, $5,000 or even $10,000 for a bunch of official papers. I’m also sure you’ve already noticed that the greater the asset base that is at stake, the more attractive it gets to potential inheritors. We’ve seen how no amount of preparation (as in the case of Getty) will stop the vultures from diving in and getting a piece of the spoils. Maybe even an iron-clad plan won’t withstand the demands nor appease the emotions of hungry heirs. Let’s hope this stays the exception rather than the rule.

Unfortunately, not all family battles stem from questionable estate plans, but rather from the dysfunction that already permeates an existing family, whose members (in some cases) refuse to acknowledge a perfectly legitimate will. In this case, the mess will be deeper and maybe even impossible to fix — a screwed up will or trust simply adds fuel to the fire.

I’d like to investigate why people don’t bother drafting their very important documents.

Reasons Why People Avoid Estate Planning (Or Why They Don’t Have Wills)

  • Ignorance: people don’t realize how important estate planning is. Many don’t understand nor realize the true pain of probate.
  • Fear and Denial: people postpone getting their estate plan done. It’s a grim subject and some folks just don’t want to hear it. And I don’t blame them — it can be a tough subject to face. Even some members of my family have a tendency to turn a deaf ear to this kind of talk.
  • Indifference: people don’t care enough. They think: there’s just too many other things to worry about. Or they don’t really care much about their legacy.
  • Hassle: people think it’s too much work. Let’s repeat the previous point: some people think that there’s just too many other things to worry about.
  • Expense: people think it’ll cost a lot of money to do this. The answer? Not really. At the very least, you can do your estate plan yourself with enough research. And at most, you’ll spend an inconsequential amount relative to the outlay your heirs will face if your estate goes to probate. Ultimately, the costs are all relative.
  • Procrastination: maybe you’re too busy to think about such a chore right now. Do you tell yourself that there’s always tomorrow? Maybe you’ve convinced yourself that your odds of expiring in the near future are so incredibly minuscule that….to wait another day won’t hurt.

Now if you’re ready to get moving on your estate plan, you can review some simple questions and a few tips to get the ball rolling.

Basic Estate and Inheritance Planning Tips

  • Ask yourself these questions:
    • Do you have assets?
    • Do you care who gets them?
    • Does it matter to you who becomes guardian to your children? If you care, then you’ll need at least a basic will.
  • Keep the communication lines open among members of your family, especially when your heirs are old enough to understand what a will or trust is. If your family doesn’t take to communication well, try sharing your basic philosophy on finance and succession with them (anyway). While it’s tempting to leave it to your lawyers and executors to do the sharing when the time comes, it’s still better to avoid big surprises down the road.
  • Seek an annual accountability and a proper accounting of assets that are involved in an estate.
  • Set up checks and balances among trustees and administrators who are involved in your estate.
  • Give your beneficiaries leeway to command authority over the assets they are entitled to. Allow your beneficiaries the ability to make changes under certain conditions, say if there are issues about a particular fiduciary or trustee.
  • Review and update your estate plan on a regular basis (say every few years or when there are changes in your life situation).
  • Keep everything up to date! For those who are doing their own estate plan, visit Nolo.com to get more information.
  • Whether or not you get a professional to draft your estate plan, trust, will and other documents, it’s a good idea to read up on estate planning and to become familiar with the concepts.

Your goal should be to get your wishes documented and in order. Don’t wait to get these things squared away. It’s best to tackle these things when you’re still up and about, cognizant of what’s going on around you and are in a happier, and perhaps easier place in your life. Do it now while you’re still in a good mood. My hope is that I’ve scared you enough to take action; this, I’ve certainly managed to do to myself.

Created February 12, 2007. Updated February 13, 2012. Copyright © 2012 The Digerati Life. All Rights Reserved.

{ 11 comments… read them below or add one }

Golbguru February 13, 2007 at 6:14 pm

Thats thoughtful….Unfortunately we don’t have any such document for the future. Fortunately, we don’t even have anything that can be given as of this point. But I guess once we get out of school we will get a will asap.

Btw, having joint accounts (and/or joint ownership) solves a part of the problem. In the event that one of the partner dies, the assets are transferred to the remaining account holder by default. We do have those.

Silicon Valley Blogger February 18, 2007 at 10:41 am

You’re absolutely 100% right Golb! We live in a community property state so by having joint ownership of assets, that helps. But we also need to specify guardianship of children, health directives and trusts where it makes sense. If you have joint accounts and such, that’s a great start. I am surprised to know that many families still don’t have it this way though.

Super Saver February 18, 2007 at 11:29 am


Great post. My build is that one should hire a good attorney to do this since their are many facets to consider.

We became motivated to do this when I transferred overseas for several years. The Company accountant warned us that without wills, trusts etc, our assets would be handled according to the laws of the country in which we resided. Enough said, we created trusts, wills, and planned for future children. I also have the documents reviewed periodically to ensure our current situation is covered.

Silicon Valley Blogger February 18, 2007 at 11:58 am

Hi Super Saver,

I’d be curious to know how much it cost you to have a professional review your documentation. I actually checked around for a local estate planning attorney and we got a quote for $3,000! What?! That’s a good chunk of change! So I decided to read up on the matters myself and do this using Nolo’s software. Now I need to do updates but the inertia is holding me back. I’m debating on whether I should seek a professional just to straighten it all out.

It sounds like it was worth it to you to do just that!

JHS August 10, 2008 at 2:33 am

I know all about family feuds that result in threats that tear the family relationships, and they also deplete hard-earned resources. And it frequently happens before the family member at the center of the dispute dies. For more information about why estate planning that includes durable powers for health care/an advanced directive, read about Conservatorship of Wendland, the case I litigated for SIX years all the way to the California Supreme Court. If that doesn’t scare you into planning for your family’s needs, nothing will.

Klublok March 27, 2009 at 8:47 pm

With so many divorces and re-marriages, estate planning is getting more and more important (and complex)! These “Brady Bunch” families can sometimes be filled with jealousy when it comes to splitting up their parents’ assets. I have experienced situations where an elder child from a previous marriage accused my client of cheating her out of her inheritance because my client bought a car for his step-son!

So be careful if you are in this situation!

Jay Roberts April 11, 2010 at 2:05 pm

To not have this all covered is madness these days. Even the closest families seem to get torn apart over inheritance and possessions. My father in law and his sister stopped speaking to each other over arguments because their father did not leave a will. It’s ok for them, they are out of it. It’s those who get left behind who have the stress of it all.

Silicon Valley Blogger April 12, 2010 at 9:41 pm

There are people who think that their heirs should worry about it all since they’re the ones who stand to gain something. Some excuses I’ve heard are “well, I’m gone anyway so why should I worry? Let them all worry about it!” Sadly, people outside of the family will be paid handsomely to straighten out any mess that’s left behind.

Kosmo @ The Soap Boxers February 14, 2012 at 7:33 am

Howard Hughes died without a will … unless you believe Melvin’s tale.


In addition to Melvin’s fingerprints being on the envelope, they were also found in the book “Hoax” (about the faked Hughes memoir) in the library of Weber State College, where Melvin was once a part time student. That book contained copies of Hughes’s actually writing, since the differences between his writing and the faked writing were instrumental in proving the memoir was a hoax.

The kicker? The writing in the will closely resembled the writing samples from Hughes, but they shouldn’t have. He was not a healthy man in his later years, and his handwriting deteriorated as a result (this is common). So the writing looked nothing like Hughes actual writing as of the date listed on the will.

I just happened to stumble across this last night while reading one of my favorite books, Murder Two: The Second Casebook of Forensic Detection by Colin Evans -> http://goo.gl/DnTOi. It’s not as good as the original Casebook of Forensic Detection, but sequels rarely are.

So, who got Howard’s estate? His 22 cousins.

Silicon Valley Blogger February 14, 2012 at 9:17 am

Very intriguing! This reminds me that no murder mystery series isn’t without at least one tale that involves a wealthy individual and a fight over his or her estate. It’s such a common motive for one crime or another that it’s become cliche. Around 10 minutes into a Poirot or Inspector Barnaby story and I’ll immediately suspect that the whole gist of the crime and the episode is to do with a will.

Lee February 18, 2012 at 1:01 pm

Given all the various reasons for shunning or deferring the task of estate planning, I will admit that I am currently hung up on one of these points: in particular, the last one — procrastination. I know for a fact I need to update my documents immediately but haven’t yet because I’ve been caught up with far too many other activities (as they say, life happens). So I’m embarrassed to say that I’ve held off on doing this for so long. So far, only my first child has been mentioned in our formal paperwork (when I have more than one).

I’d be well served to go through these planning steps to secure the right paperwork and all the peace of mind that this exercise should afford.

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