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Financial Literacy - Planning for your heirs
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Avoiding accidental disinheritance
It happened to Anna Nicole's daughter, and it's more common than you think.
Planning for your heirs

You can accidentally disinherit your heirs

Adams says do-it-yourself wills may be especially prone to disqualifying technical errors. "I had one a few years ago that, upon review, generated about eight different accidental disinheritances," he says. "If you want to do it yourself, when you're done, take it to someone who generally knows what they're doing. An hour-long review can tell you whether you've got problems."

3. Disinheritance by stepparent succession
Anna Nicole again comes to mind here. Her highly controversial 14-month marriage to 89-year-old J. Howard Marshall II put her on a legal collision course with his son Pierce, who sought to keep his erstwhile stepmother from inheriting millions following his father's death in 1995. The court battles continue today, despite the fact that none of the three participants is living. The holes the elder Marshall failed to plug in his will are too numerous to mention. Suffice to say, his true intentions came down to a she said/he said standoff for the court.

The common accidental disinheritance by stepparent goes as follows: A widower remarries and, thinking to save a few bucks, retypes his simple will, leaving everything to his new wife. When he dies, the new wife, having no blood relationship to his children, passes her assets on to her children, thereby disinheriting his children, which was not their father's intent.

"One young man in this situation told me, 'You know, I wasn't worth $100 to my old man (to get his will reviewed)," Adams says.

The solutions: The father could have named blood descendants as express heirs, established a trust that limited his wife's rights to those assets and named his children as ultimate trustees. Or he could have entered into a mutual will with his spouse so that their assets would be distributed among both families by a formula they would design.

"One of the problems with wills in general is that they are never to be used immediately, so you're always anticipating the future," says Grossman. "The role of a good lawyer is to anticipate all of the potential future scenarios and to draft around them. You want to draft for every contingency."

-- Posted: Nov. 19, 2007
 
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