Our lives are full of everyday superstitions. Knock on wood, don’t step on sidewalk cracks, and that talking about bad things make them more likely to happen. This last one is among the most given reasons why people don’t make estate plans. “If I talk about it, then I’ll die” goes the excuse. Unfortunately, this is rather short-sighted in that at some point we all die, whether there’s a plan or not. The tragedy is compounded even further for the loved ones left behind when there’s no will and no clear plan on who should inherit your estate.
Case in Point
For a vivid example of how this lack of planning can lead to undue frustration, one can look to the ongoing legal drama surrounding the probate of Zappo’s CEO Tony Hsieh’s estate. Mr. Hsieh died intestate this year in November, at the young age of 46. Long time readers of this blog, and those familiar with probate terms, will know that “intestate” means Mr. Hsieh died without a will. It’s surprising for one as wealthy as Mr. Hsieh, whose estate is roughly estimated at $500 million, to have done no estate planning of any kind.
Yet, despite this lack of planning, Mr. Hsieh and those like him who don’t write wills can rest easy knowing their home state has a plan in place for them. This is known as “intestate succession” and are a series of statutes which determine which of your relatives will receive your money and property, and what percentage they can anticipate getting.
In Nevada (where Mr. Hsieh’s estate is being probated), the law clearly states that when someone dies with no spouse and no issue (meaning no children or grandchildren), then the estate passes to the surviving parents. If both parents are living then 50% goes to each, and if only one is still living then 100% to the surviving parent (which is different from the result in Texas). Yet while the law of inheritance may seem very clear from the Nevada estates code, the ongoing litigation surrounding Mr. Hsieh’s estate further highlights the importance of having an estate plan.
Capitalize on the Opportunity
Mr. Hsieh was clearly a man with business savvy, and is remembered for promoting a healthy happy workplace environment. The thought his family, friends, and loved ones are squabbling over this wealth would likely break his heart. Unfortunately for him and others who are relying on the state’s intestacy statutes, not having a plan can lead to decisions you would never approve. Texas intestacy laws are drafted similarly to Nevada’s, with the court looking to pass your wealth first to surviving spouse, children, parents, and siblings in roughly that order.
This order of inheritance may be exactly in line with your wishes, but it also might not. If you want to leave something to a single sibling, a friend, or to a charity, that’s where conflict can emerge. The claims of Mr. Hsieh’s family and friends all focus on his intention to give them either funds or to enter into lucrative contracts with them. Unfortunately for them, since he died intestate, there’s no definitive document stating his wishes.
What Can You Do?
During the holiday season our lives are already full of stress, making the desire to postpone estate planning an understandable one. But, as we’ve seen above, death happens to everybody, including the rich and the vital. And it happens whether you discuss it or not, and no matter whether you’ve made a plan or not. And waiting till its too late can lead to results or conflict that you’d never want. But this doesn’t have to be the case. Leaving clearly stated wishes and instructions in an estate plan, can be one of the kindest gifts you can give your loved ones.
If you already have an estate plan that may need a little holiday cheering, or if you have never drafted an estate plan before and are interested in putting a plan together, please get in touch. Let us help craft the perfect plan for you. Nielsen Law PLLC provides family-focused estate planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area. For more information and to learn about our firm, please contact us.