The state of Illinois recently resolved the estate of Mary Petroff, a nonagenarian (new word! - "90's") who died in 2011. It took nearly 4 years for the state to find and confirm the 48 relatives who laid claim to her and her late sister Anne's $1.36 million estate. The story of Mary and Anne's estate is not only interesting but also inspiring.
From a financial perspective, the fact that Mary and Anne had amassed such a large savings by the end of their lives is solid evidence that working class Americans who save and invest prudently can indeed attain real wealth. According to the county treasurer's office, Mary and her sister Anne were born to an immigrant family in the early 1900's. Their father was a laborer, and the sisters worked in menial and clerical jobs for the duration of their lives, living quietly and frugally in the small town of Granite Hills, Illinois. Neither sister married nor had children, and each of them invested their savings in stocks and bonds. Now, mind you, they did not live in the pricey SF Bay Area - but it is nonetheless a reminder to us all that amassing a comfortable savings is a real and attainable goal no matter what our income. It may also be a reminder of the financial advantage of not having children, but that's a topic for another day.
No one would dispute that Mary and Anne did a better job than most Americans at saving and investing their income. Unfortunately, neither of them was able to enjoy the fruits of their labor, nor were they able to choose the people who would benefit from their lifetime of thriftiness. Unfortunately for the sisters, they would both be diagnosed with dementia before completing any of the crucial estate planning documents such as a will, trust, or power of attorney. Legally, one cannot sign a will, power of attorney, or other legal document if they have been deemed mentally incompetent. Alzheimer's or dementia is perhaps the most common illness that prevents seniors from executing legal documents. This is - as you might be able to surmise - to prevent undue influence (taking advantage of vulnerable persons) and financial elder abuse by family members, predators, or caregivers.
The sisters lived the end of their lives in a nursing home, where their care was overseen by a legal guardian, called a Conservator in California. Had the sisters executed an Advance Healthcare Directive, they could also have avoided this costly burden, by electing their own "agent" to make medical decisions for them and avoiding the court process of appointment. Signing a power of attorney documents would also have allowed them to elect someone to manage their financial affairs. Without a power of attorney, often a professional fiduciary and an attorney will be appointed to oversee one's assets. Both these costs can be avoided with the proper estate planning documents in place. So, in the end, sisters Mary and Anne failed to take advantage of the freedom to choose who would receive their money, with a large chunk going to attorneys, court fees, and other professional costs.
Now, enough criticism of Anne and Mary's planning skills. Let's look at another interesting legal caveat of this case.
When Anne died in 2009, her estate passed to Mary, who appeared to be her only living family member. When Mary died in 2011, the entire estate fell to into the hands of the State of Illinois, who held onto the assets until it could be determined who (if anyone) would inherit them. This is also what happens to estates with no known beneficiaries in California. Over the next few years, distant family members began to come forward to claim the money. Here's where California and Illinois probate law differ. In California, probate law follows intestate succession, which is essentially an ordered list of potential heirs. In short, the closest living relative (s) inherits an estate when there is no will. Ie, if a parent dies, their child or children inherit the assets, if there's no children, then grandchildren inherit, and so on. But in Illinois, any and all living relatives get a share of the estate, no matter how distant. When all was said in done, the state of Illinois wrote checks to 48 different family members across the world, ranging from $3,303 to $110,000. Many of them were from Bulgaria, where Mary and Anne's parents likely immigrated from. So perhaps, in a sense, the family was sending money home, over a 100 years later.
Now perhaps Mary and Anne didn't have people they loved in their lives who they would want to gift their savings to, and they would have been okay with distant relatives and attorneys getting their money. But what if there were loved ones in their home town of Granite City, who knew the sisters and could have benefited from their bequests?
Whether one chooses to do a Will, a Trust, or a Complete Estate Plan is up to them in the end. As an Elder Law and Trust Attorney, I just want them to be aware of their options - and the consequences of avoiding Estate Planning documents altogether.
If you have questions about a Will, Trust, Power of Attorney, or Healthcare Directive, call my office at 925-322-1763 for a free consultation.