Last year my father-in-law was hospitalized with a serious life threatening illness. They discovered he had a bisected aorta that ran more than a foot and was not really a candidate for surgery. He recovered, as best he could, but is still living knowing he can pass any day.
Why do I bring this story up? Well as a result of this tragedy my in-laws brought me in to help with their finances and go over their books. My father-in-law has traditionally done the books and he sees a time when he will no longer be here and he wants to have someone he can trust walk beside his wife and help her out. While I was going over their books and notes I came across a stack of odd documents. These documents where regarding an inheritance. I know my mother-in-law's father had a good size estate and that she had inherited some money over a decade ago, so I was curious to see how much she received and how well it had been invested.
Well it turns out it was an inheritance, but not from her father to her. Rather it was a document going over the estate of Mary Elizabeth Cunningham. Who as it turns out is my mother-in-laws Grandmother's Niece. She had passed away in 1997 with no will and very little planning. She had an estate worth $752,000 and no will!! And to complicate things she died never having been married or having any children. This means they had to go up the family tree (in this case to her Grandfather who was a civil war Veteran)
What happened to all the money?
The Good Lawyers
Well since there was no Will the State stepped in and hired a law firm to figure out how large the estate was and who stood to inherit anything. This took a well over a year for them to track down relatives, create a family tree, and determine the estates assets.
These lawyers did a good job and I think they were worth the money for the work they did, but with a good Will their services would not have been needed.
The Bad Lawyers
In addition to the good lawyers there was a set of predatory lawyers that came along and convinced a few of the potential inheritors to give them 1/3 their potential inheritance for legal representation. (Fortunately they only were able to convince a few of the minor inheritors to jump on board).
Bank Admin Fees
Her bank acted on her estates behalf to track down her assets. I am not
Sure what you would call their position, trustee maybe? But that comes at a costs.
Yep nearly $50K lost to taxes. Taxing the dead is not a good thing in my opinion.
Inheritance Taxes (State)
This was a big avoidable costs. Some states tax your estate differently based on who you give it to. If you give it to your daughter no tax if you give it to a friend or distant relation it gets taxed! I won't bore you with all the details but needless to say there was a lot of inheritance tax.
Total Cost: $145,459.50
Not having a will cost her 20% of her estate. Also did she really intend to give her estate to 26 different relatives? I doubt it…
Remember this story get your will done! If you don't, who knows who will inherit your hard earned money?