Estate Planning Choices

The failure to carefully and deliberately plan your property distribution choices upon death can result in unnecessary expenses, heartache, and in some cases litigation. A recent appellate case showcases this. In the case of In re: Estate of Warren Elrod, the decedent (i.e. person who died) had a biological son born in 1966 from his first marriage. The first marriage ended in divorce a few years later. In 1973, the decedent remarried a woman who was already the mother of two of her own children. The decedent treated his new step-children as his own and had a strong and active relationship with both of them until the day he died, forty years later.
His relationship with his biological son, however, was not as smooth. Essentially, the decedent and the biological son had little to no contact (seemingly not by the choice of the decedent) until the 2000's. Thereafter, the relationship appeared to consist nearly exclusively of the decedent sending birthday and holiday cards with almost no reciprocity from the son.
At the time the decedent died, he had a written will which split the estate into equal thirds between the two stepchildren and the biological son. Evidence was introduced to the court that that decedent intended to remove his biological son from the will, but this step never occurred before the decedent died.
The decedent also owned an IRA at the time of his death which listed his spouse as his primary beneficiary and his "children" as the secondary beneficiaries. (An IRA with a living beneficiary does not pass via the will, but instead per the beneficiary designation.) The decedent's spouse died before him, and thus the primary beneficiary failed. The biological son claimed that he was the only "child" under the IRA and as such, should take 100% of it as the secondary beneficiary. The stepchildren disagreed.
The case touched upon numerous interesting legal issues but eventually, the court concluded that the IRA would pass to all three "children" equally (i.e. consistent with the will). Ultimately the court appears to have made the most logical decision based on the facts as presented. But, the sad part of this case is that the outcome could have been avoided with an estate plan that included a review of the decedent's property and financial account beneficiary designations. In the absence of such pre-planning, the parties were forced to spend time and money arguing their positions in court.
In re: Estate of Warren Elrod, No. E2014-02205-COA-R3-CV, (Tenn. Sep. 10, 2015).