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PATTI'S BLOG

Friday, February 7, 2020

Could Your Bad Estate Plan End Up as The Plot of a Book?

My favorite hobby is reading and I try to combine my love of reading with my profession of estate planning.  The plots of some of my favorite books are about dysfunctional family relationships complicated by really bad estate planning!

Here are three books I recommend where siblings were torn apart by their parents’ bad estate planning choices.

 

The Nest

by Cynthia D’Aprix Sweeney

The four siblings of the Plumb family - Leo, Melody, Beatrice, and Jack- are the beneficiaries of a trust fund they call “The Nest” left to them by their father. The terms of the trust provide that the trust assets will be distributed equally to the four siblings when the youngest, Melody, reaches age 40.

When the book begins, Melody is fast-approaching her 40th birthday, and each of the siblings is anxiously awaiting the distribution that could solve their self-inflicted life problems.  Though their father originally intended the trust fund to provide a minimal cushion for the children when they reached middle age, the investments have grown over the years and the siblings believe that each will receive around $500,000.00.  With that amount, they can pay for children’s college educations, pay off crippling home mortgages, or pay off a large home equity debt taken out to rescue a dying antique business. Shortly before Melody’s birthday, though, married brother Leo gets drunk and high at a family wedding, seduces a young woman and takes her for a ride down the coast.   While driving impaired, Leo has a car accident that results in severe injuries to the young woman.

To keep Leo’s accident quiet and to pay for the young woman’s injuries, the siblings’ mother drains most of the trust assets, leaving the adult children with only about $50,000 each. Although Leo promises to pay his siblings back, he disappears to the Cayman Islands with a secret bank account he had established earlier.

This book highlights some of the problems an expected inheritance can cause. The main problem is that these children spent most of their adult lives living beyond their means anticipating that they would soon receive unearned wealth.  Their difficult relationships with each other are made more difficult because Leo, always a selfish and egotistical character, benefits from the fact that the trust fund can apparently be distributed to or for the benefit of one of the beneficiaries to the detriment of all of the other beneficiaries. 

In the end, this is a book about how money can pollute family relationships, but it is also about how families can forgive each other and support each other in difficult times.

 

The Lager Queen of Minnesota

by J. Ryan Stradal

Helen and Edith are sisters raised on a farm in Minnesota.   When Helen has her first sip of beer, she falls in love with the taste and decides she must brew beer for a living.  In order to finance her dream, Helen talks her father into leaving her the entire inheritance, cutting her sister out of the will.   With the proceeds of the inheritance, Helen builds Blotz beer into a successful business.

Older sister, Edith, has a hard life but a sweet disposition.  She makes pies at a nursing home that are so good people come from all over just to eat at the Nursing home.   When her husband develops Alzheimer’s disease and can no longer work, she takes an opportunity to bake pies for a successful bakery.   Complicating her already difficult life, is the fact that she must also raise a young grandchild, Diana, when Diana’s parents are killed in an accident.

The story contrasts the hard-edged Helen, who mostly fails at developing relationships while successfully developing a business, with the well-loved Edith who is successful at developing personal relationships with people who can help her weather the difficulties in life.  When Helen needs help herself, she has to reach out to revive the relationships she has destroyed.

This book is essentially about fractured family relationships that can be repaired, but it is also a lesson that parents should think very hard before leaving everything to one child with the hope that the favored child will share with their siblings.

 

The Dutch House

by Ann Patchett

Siblings Maeve and Danny Conroy grew up in a sprawling 1920’s era mansion in the Philadelphia suburbs. Their father loved the home, but their mother, always miserable in the home, left the family when Danny was very young.  Later, their father remarried, moving his younger wife and her two young daughters into the mansion.  

Maeve, eight years older than Danny, left to go to college and start her working life.  After their father dies unexpectedly, the stepmother kicked Danny, still a minor child, out of the house, stating that she had no responsibility to support or care for him.  We learn that while the father was alive, the stepmother manipulated him and convinced him to put his assets, including the home, in joint ownership with her.  That meant that she automatically became the owner of the home, as well as the father’s business, at the time of his death. Only one asset was left in trust to be divided among Danny and his two young stepsisters. The trust was supposed to pay for the education of the three children.   A sympathetic trustee determines that Danny’s expenses for room and board at boarding school will count as educational expenses, and Danny is shipped off to boarding school.   Maeve encourages Danny to remain in school long enough to drain the trust fund in order to prevent the stepsisters from getting anything from the trust. Danny does remain in school for many years, long enough to become a doctor – a profession for which he has little interest.  

Much like some well-known fairy tales, this book illustrates issues that can occur with second marriages. The surviving spouse, who is not the parent of the deceased’s children, may feel no obligation to support the children.   Even if the deceased parent had a will providing for the children, putting the assets into joint ownership or gifting them to a spouse, removes them from the probate estate and, therefore, makes those assets unavailable to provide for the children.

Of course, the tales told in this book are as old as – well, Cinderella and Snow White.  The moral of the story for estate planning purposes may be:   check the ownership of assets when in a second marriage, and make sure you have provided for minor children.


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