When Is the Right Time To Plan?

Before I answer this question, here’s a true story that was recently shared by a colleague.

John died recently at age 40. He was single and no children. John lived with his mother as her caregiver, because she had some physical challenges. John had a heart attack and was on life support at a local hospital for one week. John had no health insurance. The hospital bill was over $100,000.00. John had a 401(k) and some IRAs from his work over $100,000.00.

The hospital wants John’s mother to open an estate so they can recover whatever he had for hospital bills. John had no will, no medical directive, nothing in place. Nobody knows his computer passwords, etc.

If the 401(k)/IRAs had a beneficiary designation, such as his mom or his brothers, the retirement money would have bypassed probate and the claims of the hospital. Unfortunately, John had no beneficiary designated, so all of the accounts are going through probate where the hospital will get it all.

A simple name on the beneficiary designation would have taken care of this.

The answer is – if you are over the age of 18, at a minimum, there is simple estate planning to be done.

  Contributed by Morris Hall PLLC Tucson and Oro Valley Estate Planning Attorney and Partner, Wendy W. Harn.

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This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.