"My Entire Estate" - "I do not think it means what you think it means..."

We do a lot of probate here at the Jacobson Law Firm, as well as consulting with people to help them understand various legal situations in the areas in which we practice.  I met with a person recently who was adamant that his father had MUCH more money than his sibling (the executor of the estate) listed in the estate inventory and he was certain that he was being cheated out of his "fair share" under the will.  After listening to a litany of complaints about his siblings and a list of all the assets (gold, investments, bank accounts, real estate, etc.) Dad had when he passed, I started asking about what estate planning documents his dad had executed before his death. 

Turns out Dad had given a financial power of attorney, also called a Statutory Durable Power of Attorney, to the executor sibling that allowed the sibling to change Dad's beneficiaries and add people as owners of his accounts before his death.  He had also executed a transfer on death deed (TODD) to another sibling that gave her his house when he died.  Why is this important?  When you have named beneficiaries on your financial accounts, those accounts generally don't pass through your estate, they go directly to the person you named, and much more quickly than if they had to pass through the probate process.  And a TODD is a very handy document for removing real estate from your probate estate as well.

Unfortunately for this person (not a client), his dad had done just what we recommend to a number of our clients that they do: he used several legal methods to remove property from his probate estate, avoiding the probate process for those assets.  Maybe Dad could have communicated that to his kids, but he wasn't under any obligation to do so.  The end result was that the term, "My entire estate" in Dad's will referred to a lot less money than this person had expected.   In the immortal words of Inigo Montoya, "This word - I do not think it means what you think it means..."

Morals of the story?
1. Be nice to your siblings, don't borrow money from your parents and don't "bank" on getting anything!
2.  There are a lot more tools in the estate planning toolbox than you may think.

As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer.  If you have questions or concerns about how to plan for your family after you pass, please contact an experienced estate planning attorney.

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