Sunday, April 28, 2013

When smart people die like idiots.

“He was a very smart man but he died like an idiot."

So eulogized by a close friend, Roman Blum died at age 97 with no wife, no children, and no heirs. Mr. Blum also died without a Will. To this point, Mr. Blum followed a trajectory similar to many of our clients, here in Maryland.  But unlike most of us, Mr. Blum left $40 Million behind. It will now be left to the state courts in New York to divvy up the money, according to laws governing folks who fail to leave instructions for their probate estate. The government stands to make a windfall!

Your estate, the collection of assets you worked hard to accumulate during your life, can benefit others when you pass.  And you have a lot to say about who benefits.  It simply must be written down. Otherwise, you may well benefit persons and governments that you consider unworthy of your help.

Most folks simply have not considered what may happen to their bank accounts, house, cars, collections and other things upon death.  Most of us just don't like to consider our own death.

The State of Maryland has considererd your death, and it has made plans for all your stuff, and your kids.  It is called "intestacy." When you die without a Will, you are deemed "intestate." And at the moment of your death, your estate (that pile of money and things you have accumulated) becomes subject to Maryland statutes that cover folks like you...folks that never considered drafting a Will.

In a manner of speaking, the State of Maryland has drafted your Will, already.  If the rules of intestate succession (who gets your stuff, your money, and who raises your kids) work for you, then you certainly should not write a Will.  But if you are not satisfied having the State of Maryland interfering in your family affairs, then you need to write a Will.

For instance, if you die before your spouse (wife or husband, or same sex), there is no guarantee that your spouse will inherit your entire estate.  If you leave a minor child or a parent, your spouse will be entitled to $15,000, off the top, and then only 1/2 of the remainder.  And it gets worse.

If you have left a minor child to inherit 1/2 of your estate, it will be left to the Circuit Court to appoint a trustee for the child's money, and it may not be your spouse!  That trustee will make annual, and public, reports on how the money is spent. And the Circuit Court may well need to approve any expense to be paid for your child. As you read this, I can sense your revulsion, as if you just ate a spoiled fruit.

At the most extreme, if there are absolutely no parents, spouse, kids, step-children or others entitled to take your stuff under the laws of intestacy, guess who gets it all? Read on and be appalled:

the net estate shall be converted to cash and paid to the board of education in the county in which the letters were granted, and shall be applied for the use of the public schools in the county.
And so, imagine if Roman Blum, recently of New York, had died in Baltimore City. Without any children, spouse or heirs, it is entirely likely that Mr. Blum's $40 Million would fall to the City of Baltimore for use by the Public Schools.  And just imagine how that money would be wasted away.

Take control of your estate. Create peace of mind for yourself and your family. Don't let the State of Maryland make such important decisions for you. Don't let it be said that you "died like an idiot."--Write a Will.