2.5 million Americans died last year, many without signing a will. One of them
was apparently Roman Blum, a Holocaust survivor and New York real estate
developer who was worth almost $40 million when he passed away in January 2012
at the age of 97 … If, after three years, there’s still no sign of his doing
any estate planning and no one comes forward to claim his assets, all that
money will go to New York State, under a legal rule called escheat.
Estate planning is not a
do-it-yourself endeavor; there are plenty of opportunities to make costly
mistakes. The biggest mistake is having no estate plan. Why? Because your
life’s work may escheat to your state’s
treasury by default.
At the very least, a proper will
can avoid legal landmines like the escheat
Escheat is the principle that
there is no such thing as estate-limbo. Basically, an estate can sit in limbo
for only so long before it gets swallowed up by the state where the decedent
last resided. Consider the case of Roman Blum in New York, as reported in a recent
Forbes article titled “N.Y. State Could Get $40 Million From Man
Who Died Without A Will.” You
can read all of the details in the original article, but Mr. Blum likely did
not intend the State of New York to benefit from his life’s work as a real
Here are the lessons to take
away from this case:
Plan for your
loved ones. If you don’t make at least a basic will, your state’s laws of
intestacy may apply. To see what would happen in your state, visit the free,
interactive website mystatewill.com.
beneficiary forms. Many assets are transferred via designations on
beneficiary forms – from your retirement accounts to life insurance and even
bank accounts. Review these forms regularly, and be sure to keep them
charities. Some people refer to this as the “bomb” clause, stating that
should your entire family be wiped out in a single incident, your assets should
be distributed to specific charities.
to protect yourself. Someone needs to make important decisions for you when
you cannot do so for yourself. With legal documents like health care directives
and powers of attorney you can appoint those you must trust to act on your
accessible. Make sure your legal documents can be found. It won’t matter
how many documents you’ve signed if no one can find them!
procrastinate. Apparently, when Mr. Blum was ailing, he had finally agreed
to sign the necessary documents, but passed away before getting it done.
Reference: Forbes (April
28, 2013) “N.Y. State Could Get $40 Million From Man
Who Died Without A Will”