Beyond The Will, Client Compass

Planning for the Unplanned

November 6, 2020


To best enjoy this post, please be sure to first read A Family History of the Smiths & Alexanders.

As Tiffany mentioned in her introductory post, during the next few months, we will be dissecting important issues presented in the family history of the Smith and Alexander families.

The opening paragraph of the family history introduces the Smith family. Unfortunately, Jocelyn Smith tragically died, leaving a surviving spouse and two minor children with no estate plan in place (she died “intestate”). Jocelyn died in 1995, so the distribution of her intestate estate would have been governed by an older set of laws that are no longer applicable in Massachusetts. To keep you updated and informed on current law, this blog will analyze Jocelyn’s estate issues as if she had died post-2011, after the Massachusetts Uniform Probate Code (“MUPC”) went into effect, overhauling our probate statutes, including intestacy laws.

Jocelyn died with a gross estate of approximately $5,000,000 consisting of assets titled in her name individually and some smaller accounts held jointly with Johnny.

On Jocelyn’s death, assets held jointly with Johnny would automatically pass to Johnny as the surviving joint owner. Assets titled in Jocelyn’s name individually with no transfer on death (“TOD”) designation would become part of Jocelyn’s probate estate. To gain access to the probate assets, a Personal Representative would need to be appointed by the Probate Court.

M.G.L. ch. 190B, § 3-203 dictates who has priority for appointment as Personal Representative.  In this case, Johnny, as Jocelyn’s surviving spouse, would have priority. Thus, Johnny would need to petition the Probate Court (with the assistance of counsel) for appointment as Personal Representative. Once appointed, Johnny would be able to contact the institutions managing Jocelyn’s individually-held assets and transfer them to an account titled in the name of Jocelyn’s estate.

Because Jocelyn died without a will, once Johnny as Personal Representative gained control of Jocelyn’s assets, he would be required to administer the assets in accordance with the MUPC’s intestacy laws. In particular, M.G.L. ch. 190B, § 2-201 provides that when an individual dies without a will, a surviving spouse will receive the deceased spouse’s entire intestate estate if: (i) no descendant or parent of the decedent survives the decedent, or (ii) all of the decedent’s surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent.

In the case of the Smith family, if Johnny did not have his daughter, Stevie, Johnny would inherit all of Jocelyn’s probate estate. Based on the timing of the story, Johnny was unaware of Stevie’s existence at the time of Jocelyn’s death. Thus, Johnny likely inherited all of Jocelyn’s individually-held assets. Technically speaking, however, given that Johnny did have a child with a woman other than Jocelyn, the Code provides that Johnny would be entitled to $100,000 plus one-half of the balance of an intestate estate. The remainder of Jocelyn’s intestate estate would pass equally to Randall and Twyla (or their guardian, Johnny, if they were minors, to be held for their benefit).

A proper estate plan would have provided Jocelyn with an opportunity to direct the disposition of her assets at death, and to minimize estate tax consequences through the use of trust planning. Jocelyn would also have protected her children, Randall and Twyla, from potential claims or diminutions in their own inheritance due to Stevie’s later arrival and the blending of their family with the Alexanders.

Ultimately, Jocelyn’s untimely death is a reminder of the importance of engaging experienced legal counsel to prepare an estate plan that reflects your wishes.

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