A Short Story With a Big Lesson
Everyone admired the Anderson family. Walter and Joan had 5 children and had worked hard all their lives to give their children the best of American life: each child received a car when they were a junior in high school – provided they had a 3.2 GPA. Two children went to FSU, two went to University of Miami, and one to Cornell. They all enjoyed the benefits from Walter and Joan’s small business – a flower import business next to the Miami airport. Walter and Joan had started the business 45 years ago, the year they were married, and it had grown into a business with 19 employees and many good customers including Publix.
All children were now married and Walter and Joan had 7 grandchildren. However, only one child, Felix, was interested in the business. Felix had been working in the business since he graduated from Cornell. Every year, without fail, the children and grandchildren gathered at the luxurious home of Walter and Joan with a massive, 2,000 sq. ft. pool – and a Tiki Hut bar and grill next to the pool – for the 4th of July, Thanksgiving, Christmas and New Year’s Eve holidays.
As in every family there were family disputes. But Walter and Joan ruled the family with an iron hand. Whenever there was a problem, the final word belonged to Walter and Joan: all the children respected their decisions. The children did ask their parents to sit down with an experienced estate planning attorney and Walter and Joan agreed, but they could never find time in their busy schedule to set up a meeting with an attorney.
Suddenly, at age 81, Walter had a stroke that left him mentally impaired and within two weeks of Walter’s stroke Joan, at age 76, had a heart attack and died. Neither Walter nor Joan had a trust or will. The family almost immediately plunged into internal fights and bitterness. Felix with his brother filed a Petition to be named Guardian for Walter; the other three children filed a counter-petition asking to be named Guardian. The Guardianship battle lasted for over 2 years and cost over $150,000. Before the court could name a permanent Guardian, Walter died.
The case is now in probate and attorney probate fees are in excess of $200,000. Felix filed another costly lawsuit against his siblings claiming that he should have 51% interest in the flower business because he had been working in the flower shop for the last 10 years without any help from his siblings and had helped grow the business. Because of the lawsuit, the business has declined; valuation experts say the business is now worth only thirty cents on the dollar.
The families no longer gather for Thanksgiving or any of the other holidays. The grandchildren have grown apart.
- Leave clear instructions – and don’t procrastinate. Most likely, all of these problems could have been avoided had Walter and Joan left clear instructions on such critical issues as who would take charge if they became mentally incapacitated and how the flower business would be divided upon death. A living trust is simply this: clear instructions in the event of incapacity or death. This is why virtually every family – no matter how cohesive and bonded – needs a living trust.
- Plan Now. While Walter and Joan were fully mentally capable, all the children respected their decisions. The family problems erupted when Walter had a devastating stroke and Joan died. We are all mortal – plan ahead.