Texoma Living Well Magazine November/December 2018 | Page 15
NO WILL IS SUCH A BAD PLAN
FOR YOUR FAMILY…
J
ane Doe, age 54, was tired. “I’m going to bed ear-
ly tonight,” she told her husband. They had been
happily married for 14 years. John was sitting in his
recliner watching television. It was not unusual for
him to fall asleep watching TV. Jane got up the next
morning and quietly got ready for work. As she was walk-
ing past John, she noticed something did not look right.
She walked closer and tried to
wake him. John had died in his
sleep without warning. He had
been the picture of health; he
worked outside, was not over-
weight, never smoked, and nev-
er went to the doctor. “What a
nightmare,” you say; and, it is.
You will really think ‘nightmare’
when you hear about his estate.
John did not have a Will or
any life insurance. John and
Jane did not have a prenuptial
or postnuptial agreement. Self-employed, he had a lot of
debt, including equipment loans, car loans and credit card
balances. Jane knew virtually nothing about John’s busi-
ness. John owned their house before they got married so
the house was his separate property. Most of his net worth
was tied up in the house, which was worth $350,000.
The remaining mortgage balance was $150,000. He had
a savings account of approximately $18,000. John’s first
wife remarried a wealthy man who adored John’s teenage
daughter so she had everything she needed. They live on
the West Coast, so John might have seen his daughter once
per year for the last several years. John’s daughter decided
to hire her own attorney to represent her interests in John’s
estate.
Because John died without a Will, the Texas heirship statutes
control who inherits his property. John’s personal property
(cash, personal effects, brokerage accounts, equipment,
cars, etc.) will be split equally by Jane and John’s daughter.
However, there is no equity in his equipment because the
loans are about equal to the value of the equipment secur-
ing the loans. The cash will quickly be eaten up by the fu-
neral, appraisal fees, attorney fees, monthly debt payments,
property taxes, insurance, and other expenses. Much to
Jane’s surprise, she learned that because John died without
a Will, his daughter’s attorney can ask for John’s estate to
By Craig Watson
pay his attorney fees and the judge might allow the request.
Of course, the estate’s attorney will also be paid out of
the estate. Legal fees are much higher for an estate with-
out a well drafted will because the attorney must do a lot
more work. Property taxes are due on the house. Within a
month of John’s death, the equipment loans, car payments,
house payment and credit cards are all one month overdue,
meaning two payments are due. Pro-
bating an estate without a will takes
longer because more court hearings
are required. So, all of the loans will
soon be three payments behind, re-
sulting in unpleasant calls from col-
lection agencies. John still owes child
support to his first wife. Before any
inheritance can be distributed to Jane
or John’s daughter, the debts and ex-
penses must be paid. Jane finds that
after expenses, she will inherit noth-
ing from John’s personal property.
Because the house was John’s separate property, John’s
daughter will inherit two thirds of the house. Jane will only
inherit the right to live in the house but the daughter in-
herits the entire house as soon as Jane dies. However, in
order to live in the house, someone has to pay the monthly
mortgage of $1,200. Jane only earns $22,000 per year
at her job. The property taxes and homeowner’s insurance
are $8,000 per year. Living in the house is not an option
for Jane because she simply cannot afford it. Jane is dev-
astated to learn that she will inherit very little from John’s
real property. So when all the dust settles, John’s pampered
daughter inherits most of his estate.
In conclusion, if you do not plan for the disposition of your
estate, Texas law provides an inflexible and often surprising
“estate plan.” This is especially true in second marriage situa-
tions. Your very own well-drafted estate plan can protect your
loved ones from extra expenses, avoidable delays, prevent-
able disputes and devastating surprises––much like homeown-
er’s insurance protects you in case your house burns down.
Hopefully, you will never need your homeowner’s insurance.
Unfortunately, everyone will need an estate plan someday. Be-
cause John never got around to it, Jane was left with virtually
nothing, a result that John probably never intended. Don’t let
such a depressing experience happen to you or your loved
ones. Make sure your family is prepared and secure.
Craig Watson’s law practice focuses on Estate Planning, Probate, Guardianship and Elder Law. Formerly a CPA, he has
over 25 years of experience. Call 903-813-8500 or go online to www.craigwatsonlaw.com
TEXOMA AREA Living Well Magazine | NOVEMBER/DECEMBER 2018
13