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Why Probate Remains Important

January 25, 2019

One of the recurring themes in our discussions of trust services is how trusts may be used to avoid probate. However, a recent case from England reported in Mail Online shows just how important probate remains in properly winding up an individual’s financial affairs.

Background

Tessa Amstell was a British film star in the 1930s. She met jazz musician Billy Amstell while she was working on the film Kicking the Moon Around, and the couple married in 1938. They traveled in celebrity circles, and they did not have any children. The couple owned a bungalow that was filled with their memorabilia.

Tessa and Billy entered a nursing home together in the 1990s. They did not sell the house, which remained unoccupied, as Tessa hoped to keep the home and its contents in the family. Tessa’s niece Marion, who was an attorney, handled the payment of utilities and taxes, collected the mail for the couple from the house, and supervised their finances. Billy died in 2005.

In 2009 Tessa executed a home-made will, with Marion as a witness. Tessa left the £500,000 bungalow to her nephew Martin (Marion’s brother), and some £130,000 was to be distributed to 22 different animal charities.

Tessa died in 2011 at age 98. By that time Marion was 78, and she herself had moved recently. Because of the move, Marion could not immediately locate the will; it was in one of her boxes of papers. But nothing about the day-to-day property management had changed. Although Marion was supposed to be the executor of the estate, she did not initiate the probate process.

That was a big mistake.

Heir Hunters

The BBC runs a television program called Heir Hunters. It documents the work of companies that locate the heirs to estates for which no will has been probated. In exchange for documenting the inheritance rights, the company takes a percentage of the inheritance.

One of these companies learned about Tessa’s bungalow. Marion received a call from them, and she told them that there was a valid will and that she was the executor. Nevertheless, the company proceeded to track down a distant cousin of Tessa’s in America, who agreed to accept a percentage of any inheritance that they could recover for him. The company then filed for probate on the basis of intestacy, without mentioning the fact that Marion had told them about the lost will. Marion did not make an appearance. The probate court gave the company control of the house. The locks were changed, and all of Tessa’s and Billy’s cherished possessions were cleared out.

Marion and Martin found the will, but then had to endure a 12-month legal battle as the company claimed that Tessa’s will was not valid. The firm pored over Tessa’s medical records, cherry picking certain items, in an attempt to show that she was not of sound mind when the will was executed.

The house was put up for auction.

The not-so-happy ending.

Fortunately, Martin and Marion prevailed before the auction took place. The heir-hunting company then presented its bill for £134,000 for the expenses that it had incurred, asking to be reimbursed from Tessa’s estate. The probate court refused the demand, citing the firm’s misconduct in misleading the court about the existence of a will.

However, the story does not have a really happy ending. Marion and Martin have been exhausted by the ordeal. Without the possessions of Tessa and Billy, the house lost its emotional hold on them. Martin has decided to sell the house after all, so it won’t be kept in the family as Tessa wished.

Takeaways

Do-it-yourself wills have become more popular, and they are better than no will at all. When Tessa’s will finally was presented to the court, it had no defects. Still, the cost of having a will drafted by a professional is modest, especially when compared to the value of the property that will be disposed of by the instrument.

Naming a family member as executor of one’s estate is similarly a popular choice, but this case shows the vulnerabilities of that approach. The amateur individual executor may be too busy to attend to the many tasks (see “What will your executor do?” for details), may become ill or move away, or may die. The better approach is to name a team of professionals at a corporate fiduciary such as us.

We do this work, and we do it well; we do it every day. Our fees are no larger than what an amateur executor is entitled to receive for estate settlement services.

Is your will up-to-date? Are you satisfied with your choice of executor? Should you consider new strategies, given the dramatically enlarged federal estate tax exemption? We would be pleased to review and discuss your situation in more detail as we present the case for our services in estate settlement and trusteeship.

Call upon us at your earliest convenience!

2019 estate planning review checklist

  • Check beneficiary designations on retirement plans and insurance policies.
  • Create a roadmap for digital assets, including passwords for important accounts.
  •  Include any new family members.
  • Are any minor beneficiaries no longer minors? Different provisions may be appropriate for adult children.
  • Make certain heirs know the locations of key documents—the will, power of attorney, and medical power of attorney.

© 2019 M.A.Co. All rights reserved.

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