Trust

Putting Your Trust In The Right Estate Planning Attorney (For You) Will Make All The Difference

We all want to live the American Dream, and the Fernandez family, through hard work and perseverance, achieved their dream. But when it was time for their estate plan to pass on their hard-earned family legacy, their dream turned into a nightmare.

Jose and Rita Fernandez lived the American Dream. They met in high school in southern California, both first generation Americans. They got married and started their family soon after graduating high school.

Jose and Rita worked hard at the local dry cleaners. First mopping floors, then steam-pressing clothes in the sauna-like, windowless central operations cleaning facility far from the fancy, pristine storefronts that customers see when dropping off and picking up. They would come home stinking of perc, the chemical used to ‘clean’ the clothes, but never complained. They both moved up through various positions, eventually becoming integral parts of the company with Jose managing operations and Rita greeting customers as the face of the business at the flagship store.

After the birth of their third daughter, they decided to chase their dream. With the help of family and friends, Jose and Rita opened their own small neighborhood cleaners. Behind their cramped storefront they cleaned and pressed clothes, all in one space. They did it all themselves, just the two of them, but their years of experience in almost every possible position, along with long days and nights, made it a success.

To commemorate their first sale, Jose and Rita saved the first dollar bill they were ever handed in The American Dream Cleaners. It was framed and hung on the wall next to their licenses and growing collection of business and community service awards.

They were meticulous and driven.

Their love kept them going through the tough times, and their constant smiles and personal greetings kept their loyal customers coming back. Within a few years, they had opened their own central operations facility and had three storefronts throughout the South Bay.

The Legend of Jorge

Jose and Rita bought a house, a home in which to raise their daughters Aracely, Laurita, and Beatrice. The first thing they hung on the walls in this symbol of American success was their first dollar bill, now affectionately called Jorge after the first president who graced the denomination. They proudly hung Jorge next to their front door, partly to remind them of where it all started every time they go out into the world.

Life was good. As the girls grew up, Jorge took on a greater role – his serial number becoming the family passwords while his frames got fancier and fancier. Jorge made his way into every one of the family’s yearly Christmas card photos, held proudly by that year’s winner of their fiercely competitive Monopoly game.

The girls started their own Jorge tradition, which their parents soon followed, where they would kiss two fingers and touch Jorge on the way out of the house for good luck and then once again when returning home, thankful to return safely.

Jorge became so important to the family that Aracely named a son Jorge, Laurita used George for one of her son’s middle names, and Beatrice’s baby girl was named Georgina.

Not All Estate Planning Is Equal

Jose and Rita loved what they had built and were often amazed by it all. But they knew it wasn’t just luck. It took hard work, persistence, and planning. Jose and Rita were planners, and recognized that once they had a family, they needed to protect it. They knew they needed to plan in case something happened to them and hired an estate planning law firm to help them.

They filled out forms with all their family information and met with an attorney for a half hour. The attorney advised them to set up a Revocable Trust to protect them from probate and use a Will to name guardians for their children should something happen to them before the girls turn 18. He stated that when they died, each daughter would inherit one-third of their estate, and suggested they name their favorite siblings as their trustees and agents. Jorge and Rita were concerned about so many different things, including how the business would work if divided in thirds and who would run it, but a plan was written and presented before they could get the answers they wanted. They assumed the attorney knew what he was doing, and trusted his advice to first get their personal lives protected and deal with the business ‘down the road’.

With a plan in place, they believed they could relax. Although they never looked at their plan again, for the next few decades, life was still good.

All three girls, now young women, worked in the family business. Aracely was being groomed to manage it all while Laurita went to business school. Beatrice stayed in the business, but secretly longed to follow her own path. The family remained close, living and working together in harmony until, one morning, when Jose was 67, he never woke up.

Jose Dies and Their Plan is Put to its 1st Test

Jose died peacefully in his sleep. The family was, of course, devastated, and Rita’s broken heart damaged her far worse than any disease could.

Rita decided she could no longer live in the home she shared with her best friend and lover for decades; the emptiness was unbearable. Besides, the kids were all grown, and she didn’t need the big house. But really, she just wanted to escape from the sadness.

However, when she met with a realtor, she found out that the lawyer never took the time to change their ownership from joint tenancy to community property when he retitled it into the name of their family trust. As a result, she was looking at hundreds of thousands of dollars in capital gains taxes that would wipe away their investment in real estate. This forced her to remain in the home she hoped to escape to save money for her daughters to inherit.

The girls did their best to be around for their mom. Each would take time to visit with her, even stay overnight with her, but they had their own families now and couldn’t always find the time. But every holiday, this close-knit family came together at Rita’s home for grand celebrations. These were Rita’s best days. Watching her kids, even though there were in their thirties, still act like they did when they were teenagers, brought her back to happier times. All her grandkids got along as if they were siblings — she and Jose had built not just a family business, but a family legacy that looked like it would keep the family close and loving forever.

Rita Dies Of A Broken Heart And Their Plan Is Put To Its 2nd Test (Time For Their Estate Plan To Protect Their Family)

After the holidays, when regular life resumed, times were tough for Rita. Eventually, being alone in that big house with just memories of Jose was too much, and finally she succumbed to her broken heart.

The girls had to pick up the pieces. They thought they could rely on the old, never-reviewed estate plan, but they soon learned that it actually put Jose and Rita’s legacy in jeopardy. The only plan was that the girls would each inherit one-third of the family home and a few bank accounts. Aracely wanted them to sell the home and split the proceeds, but Laurita and Beatrice wanted to move their families into it. There was also no plan for the business – who would own it, who would run it, etc.

The girls argued and fought over what should happen. Aracely wanted to run the biz but Laurita, with her newly minted college degree, thought she was better suited for the task. Meanwhile, Beatrice finally let them know that she didn’t want anything to do with it. She wanted her sisters to buy her out so she could go her own way and stay out of the Aracely/Laurita feud.

No one could agree on any plan, each certain that she knew what her parents would have wanted them to do. It was a mess that turned into the nightmare Jose and Rita thought they avoided by having a plan. There was no order, no peace, and now so much of what they had worked their whole lives to build for their family was going to be wasted on lawyers and court costs.

The battle moved to court, where a judge — not Jose and Rita — made the final decisions. The court battle eventually came to an end, and as usual, no one was happy. Aracely, Laurita, and Beatrice were forced to sell both the home and the business (far below market value) and split the proceeds. Hundreds of thousands of dollars of their parents’ hard-earned wealth were wasted and the family, once as close as could be, was hanging by a thread.

No One Planned For Jorge (The True Price Of A Dollar Bill)

Before the family home was packed up and sold, Beatrice visited to take everything that was important to her, from family photo albums to her mother’s favorite pendant to the Monopoly game. When her sisters found out they were not happy, but it wasn’t until they opened the front door and saw the empty spot where Jorge used to be, that things turned truly ugly. The legal battle was nothing compared to the all-out war that was about to be waged.

Laurita tried to create a plan, making a schedule where each would have Jorge one-third of the year, but her sisters wouldn’t have it. Conversations became screaming matches, and this dollar bill, not the million-dollar house or successful business, tore the family apart. Soon the screaming matches became silence, and the sisters refused to speak with each other.

Jorge was their breaking point. He was the last vestige of mom and dad, their American dream, all they did for their girls and their families, and the war for his control lasted the rest of their lives. This piece of sentimental memorabilia, a dollar bill, something easy to plan for with the right attorney, tore the family apart.

The girls never really spoke to each other again. Their kids, once virtually brothers and sisters, never saw each other at holidays or special events like Quinceañeras and weddings. From time-to-time Georgina would sneak a peek at her aunt’s or cousin’s social media and think about what could have been.

Jose and Rita’s American dream became a generational nightmare for their family even though they hired a lawyer and paid good money to create their estate plan. They put their trust in their attorney, but because their estate planning attorney just assumed what they wanted and didn’t take the time to get to know what’s important to them, their one-size-fits-all documents didn’t protect anything.

Imagine if Jose and Rita would have felt comfortable enough to ask the questions they wanted answered. If the attorney had empowered them by teaching them the basics of estate planning so that they could be truly involved in the planning and make informed decisions rather than feel intimidated by the attorney and the process and not knowing what they don’t know.

Every family is unique, every dream is unique, and every proper estate plan must be as unique as the family it protects.

Watch our on-demand webinar today to arm yourself with the knowledge of The Basics of Estate Planning, then schedule a free personal consultation with attorney Seth Bier.

Be Informed. Be Prepared. Be Free.